One of the common go-around questions in new media (podcasting, blogging, etc) is how one “monetizes” their podcast. How do I make money for my efforts? I see this as a topic at EVERY PodCamp, including Toronto. It’s a valid question.
Here are some thoughts for you, dear media maker, on the question of making money for your work.
Some Background to the Idea
I recently read an article by Time Magazine’s Justin Fox about getting rich off those who work for free. He talks about some of these issues, and pointed me to the Wealth of Networks by Yochai Benkler (it’s free from that link). There was one little bit that stuck in my head:
When economists speak of information, they usually say that it is “nonrival.”
We consider a good to be nonrival when its consumption by one person does not make it any less available for consumption by another. Once such a good is produced, no more social resources need be invested in creating more of it to satisfy the next consumer.
Apples are rival.
If I eat this apple, you cannot eat it. If you nonetheless want to eat an apple, more resources (trees, labor) need to be diverted from, say, building chairs, to growing apples, to satisfy you.
The social cost of your consuming the second apple is the cost of not using the resources needed to grow the second apple (the wood from the tree) in their next best use. In other words, it is the cost to society of not having the additional chairs that could have been made from the tree.
Information is nonrival.
Between these sources, I’ve come up with some thoughts you should consider:
Scarcity is One Way to Make Money
Scarcity and uniqueness often mark value. Diamonds are scarce enough that they’re worth more than quartz. An artist’s painting is one of a kind, so it’s worth plenty more than a digital production. Going to a live concert isn’t the same as watching the concert on DVD or hearing mp3s of it, so you can charge more for someone to be there in person.
People make money off books, DVDs, and other media by licensing the rights to produce it, and making it illegal for others to reproduce it. By its very nature, podcasting, videoblogging, etc, are meant to be reproduced, shared, distributed, so there goes one way you can make money. Scarcity is out.
Nonrival means you can reproduce it millions of times without much incremental cost or effort by the producer. An MP3 file is easy to copy and distribute. Thus, podcasting can bring media to thousands of outlets without a lot of heavy lifting. So, you have to use this to your advantage, and find a way to make abundance work.
Making Money off Abundance
The other side of the coin is abundance. Circulation is the most important number to any magazine publication. How many subscribers read your magazine? 1 million. Wow! I’d definitely pay to reach 1 million people with my message (advertising).
In this case, what is unique is your number of contacts with an audience. You’ve got an audience that someone with a message wants to reach. It’s still scarcity/uniqueness at play. But you’re using your abundant audience to derive a value.
Distribution then becomes the most important goal. How can you get your show seen / heard everywhere? Well, quality counts. Making a show that’s interesting and informative helps. Entertaining people clearly helps. Valuing your audience, and their time is very important. These are all part and parcel of the crafting of good media, yes? Don’t waste people’s time. Give them some value for their efforts.
But here’s the trick: you have to then capitalize on your audience while preserving your care, trust, and value of them. You need to know WHO is in the audience, and what they’re coming to you for. You need to know how to reach out to them, how to ask them for support, and also what kinds of products or services might relate to what you’re covering in your show.
You could be untargeted, and just make the most of your crowd, but then I suspect the advertising would be as lackluster as the ads we skip through on TV. I don’t need to know about floor wax. Or, you could work to find synergistic deals between people who need unique advertising channels and your audience.
Beyond Advertising
The other value comes from the same reason radio stations exist for bands, and that’s as promotion of your core product: YOU. If you have a specialized skill, like Heidi Miller as a corporate conversationalist for trade events, or Christopher S. Penn as a leader in financial aid advice, or Becky McCray as an expert on the rural small business, you’ve got a show that drives home the fact that you’re an expert.
This brings people to your door for other opportunities, for consultation, for short term contracted help, and for other opportunities you never knew existed. And here, you’re playing on your uniqueness.
Then, it’s not a matter of numbers and abundance. Instead, it’s a matter of reaching exactly the people you need to have hear your message. Your expertise is showcased through your production, and then people choose to watch or listen to your show for motivation, but may eventually choose to reach you for future work, should they need your particular expertise.
In All Cases, It’s Not Payment to Produce
The people being paid to podcast today are doing so as employees of companies who have larger agendas than the show itself. It might be a one-step-removed advertisement or promotion of the company’s products and services. It might be just a way to add a public facing relationship with an audience. But outside of that, precious few people are being paid just to do what they want to do. And truly, if you look at old media, it’s probably the same. The people you think of as having shows just to have a show have one of the above models at work to make their money, I’m sure of it. New media, old media, it’s still the business of conveying a message.
So, go forth, make great work, and communicate with your audience for whatever reason you’ve chosen to communicate with them. By the way, you don’t HAVE to make media with a commercial goal in mind. My Small Boxes show is mostly for me, my friends and family, and to keep my hands in the process of making media. I’d hate to think of it as my intent at making a business.
How do you view YOUR work? What does this piece say to you? What do you have to say about it?
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THANK YOU. finally someone who says it.
so, the best way to be viral is nonrival?
I think part of this is like Seth Godin’s “Flip the Funnel”- we’re moving from broadcasting to targetcasting. People who are specifically finding you and are interested in your message. I interview authors because I think my audience needs to know about their work, and need to hear what they have to say. And let’s face it- not everyone is as interested in the learning process and how the brain works, and how to help kids learn better and more effectively as I am. And I think each of these people deserve more attention, deserve to sell more books, and if I can help them with my self-designed and financed soap box, then I am cool with that.
My issues with monetization have to do with the selectivity issue. Because of my topic area, there’s a lot of trash that would be promoted by choosing something like Google Adsense, and I would have no control whatsoever over that, so I think that’s right out for me.
Now what would happen in someone with a product I like and think my audience needs to know about offers to run a promotion.advertisement or whatever on my podcast? I can’t say I would rule it out. I could see it being okay, in a PBS style format.
But I think controlling the message and pairing the messages together is important. If you don’t look to the continuity, to how this fits into your overall thrust and audience, I think you are going to turn off a bunch of viewers/listeners, and not do the promoter any good, either. This is why people tivo in the first place. We are okay with targeted messages, even if sometimes they’re wrong, but are becoming ever more less okay with the ads everywhere approach.
In my opinion, anyway.
The one commodity that is scarce and shall for the foreseeable future remain scarce is time. An audience is a scarcity because to individually contact each member of the audience requires more time than an advertiser is willing to invest in the development of personal relationships; therefore you as the media producer act as a proxy for the personal relationship. Advertisers pay money not because they’re trading for content, but because they’re trading for time.
In an economy of abundance, time is even more scarce. With abundance, you have even less time to invest in new things. As a content producer, we have to continually work to improve our content or others’ quality will surpass ours, and then those who are pressed for time (and who isn’t) will opt for better content that isn’t ours.
On an unrelated note, whuffie is incompatible with currency. Any intellectual property or social currency is incompatible because economies of abundance and scarcity are fundamentally incompatible. An abundancy in a scarcity economy has a different name: hyperinflation. Be mindful of what your government does with its currency. The last well known hyperinflation was in Weimar Germany, and we all know how well that hyperinflationary period ended.
On that note - information is nonrival in the sense that my copy of an MP3 does not deprive you of the use of your copy - this is true.
What is rival is opportunity cost. The time I spend listening to Six Pixels of Separation is time I cannot spend listening to In Over Your Head.
This is why shorter podcasts tend to have larger audiences than longer ones. Not an ironclad rule, but a general statistic. The lower your opportunity cost, the more likely it is you will be consumed.
Funny you mention that, Chris, about time scarcity. I tried reading someone’s HUGE article about social media, but I have to much to do. Thus, she’s unread. Sorry. Looked neat, but I can’t invest the time.
Brevity is KING in this world. Brevity and the distillation of the salient points. Even this article was too long. (But I needed to express all the points).
Whitney: Adsense is turd. Relationship advertising or targeted affiliate advertising (if you take advertising) are the way to go.
You happen to be an expert in your field. I’d promote yourself for consultation more than seek ads. You’ve got a niche. Stay in that core. : )
Jon: it took me 3 reads to get the joke. : ) viral=nonrival.
I currently work in a dying MSM system where I trade my skill set for hours/dollars. I’ve come to realize that if your goal is to monetize you need to be a community builder.
Your post buoys my thoughts on business strategy: “it’s a matter of reaching exactly the people you need to have hear your message.”
Barry Diller from WSJ a couple of weeks ago: “Mr. Diller is betting on a different formula: featuring professionally produced, ad-supported video clips geared toward highly targeted audiences.”
Fredrik de Wahl of Joost speaks of the “lean-forward” and “lean-backward” experiences. Joost is looking to build the latter. but I think people engage in the lean-forward experience when they are passionte about an idea or community.
Verge New Media’s model:
Identify core constituencies
Discover their true champions
Create meaningful, relavent content around them
Find relavent sponsor who wants to be part of organic conversation
Repeat
Excellent thinking, Jim. Focus that narrow beam and burn your message into their foreheads!
Well said Chris!
I think that once the “Monetizing” sessions move from “How to monetize your podcast” to “How to monetize YOU” we will have crossed an important bridge in this space.
None of the shows I’m involved in are going with money-making plans, but I have a developed a reputation which is helping me build my brand (me) and podcasting is a great part of my online presence. It reminds me of the web boom, everyone started calling themselves web developers because they could code some HTML. This led to some truly horrific web pages. When it really came down to it, it wasn’t coders that were needed, it was people with the skills to create a credible online presence.
I think we also have to remember that in this space, we can have more than one outlet, so the same person who produces a financial podcast can also produce a music show. These aren’t mutually exclusive. You can have a bigger audience by grouping smaller audiences together, if that’s your goal.
“You happen to be an expert in your field. I’d promote yourself for consultation more than seek ads. You’ve got a niche. Stay in that core.”
That’s a really interesting idea to me. I’m trying to become an expert in the emerging New Media Literacy landscape. I’m in no way an expert, but I don’t know too many teachers my age working in this field. Maybe in five or ten years I’ll probably have a better grasp on New Media than my piers.
I’m wondering if maybe the key to the future isn’t being an expert in the way we think of it now. I may not be the oracle of education technology and media literacy, but I could be like a hub. I won’t know everything, but I could direct my audience to other people who are focused on different aspects of education. People come to me to act as an editor because I know enough to know what’s important and what isn’t important yet.
Dave- you’ve hit on something VERY important to me, and by using the word “expert,” it clouds the water. I agree.
Chris Penn and I have bandied around the term “unexpert” a lot. To me, unexpert means someone who knows enough, but maybe isn’t either credentialed or officially positioned to be the “expert.” I think we had different views of the final product, but in the same pew.
In my explanation, an “unexpert” is someone who knows new and nontraditional things that work for them, and that she feels can be transferred through education to others.
Would you qualify yourself as an UN-expert?
I’m probably somewhere in between. Maybe I have an expertise?
I feel like the “un” sounds a little funny to me. I get that it’s “un” in the sense of an conference, but I’m not sure if it’s how I would describe either of you. Maybe you guys are specialists? You’re people who others go to for information and insight because you have a better understanding than others.
I think expert would automatically mean that you study it and you write about it based on research. You teach and consult other people about your subject.
Even better…
I’d shoot for being an innovator. I think of an expert as someone who studies the innovators. They may know more about what the innovators accomplished than the innovators ever will, but the innovators made it happen.
Maybe when I’m done being and innovator I’ll specialize and then take some time off to become an expert.
[It’s annoying to me that I come up with better ideas in your comments than on my show. :-P ]
Dave:
Back to time again. People who are hubs are also filters. Find the best, leave the rest.
Chris Brogan: actually, we’re sitting practically next to each other. An UnExpert or Expert 2.0 is someone who can generate the results you need, whether or not they have the credentials to do so - or if the credentials even exist. After all, what existing professional certification could you possibly give to a Bre Pettis?
Economics: money is a store of value and a medium of exchange. It allows you to trade for dissimilar things in an asynchronous manner, which is vital. If you provide something of value, you can store that value. If you provide something of value, you can exchange that value for something else.
Monetization is the process of figuring out what value you provide in what quantity, and trading that with someone else. If you’re a digital hub and filter, you’re providing a time value, because I can read your shared feed rather than a pile of individual feed. If you’re a community builder/developer, your value is in Metcalf’s law of networks. If you’re a content producer, your value may be time, or it may be scarcity - your knowledge may either be difficult to obtain or difficult to consume easily.
Re: Adsense: sucker’s game. Same with PayPerPost. You are worth MUCH more than that.
Re: “un”experts. When I worked in the publishing industry, I was an ace copy editor not just because of superior skills in language and style. Part of my ability was knowing when to double-check facts (even in fiction, where I was pretty sure, for example, that Hudson did not build a certain model of truck in 1937; I was right). And part was knowing where to go find the answers. I knew a little bit about a lot of different things, and sometimes that can be as valuable as being an expert with in-depth knowledge of only one subject.
Things move far too rapidly in the realm of social/new media for the average person to develop true expertise. I believe those who will be in demand such an environment are not just the innovators and experts, but those I would call facilitators of knowledge (which is what I consider myself). We research, study and read widely, then we synthesize that knowledge and bridge the information gap between various constituencies.
Generalists and specialists both have their place in a knowledge economy.
people are thinking a lot about these subjects these days. i love that i’m reading about it on other blogs– sometimes i feel it’s just me interested in the subject!
@Connie - I definitely agree that in a fair number of cases, it’s not necessarily the innovators who provide value but the folks who can find uses for what the innovators create. Derivative ideas and works can truly enhance value. Spencer Silver created a glue in 1970 that, as glues go, was pretty near useless. Arthur Fry took said glue and used it on bookmarks in his church hymnal.
The glue was, I believe, acrylic microspheres. The product that resulted? The Post-It Note, a revenue driver for 3M that put rockets on the company’s profits.
That’s really the role I find myself in more often than note. I’m not enough of a rocket scientist to truly innovate, but I can create mashups and derivative ideas that might have value beyond what the creator had in mind.
From a “personal blog” perspective (not really trying to make money on mine) - I think it’s key to give my audience something that is different than what they’d find elsewhere - and keeping it interesting for those who keep coming back.
I also think it’s important to keep it personal - like sharing stuff that is from my heart & not just observations of life here. The “from the heart” aspect is vital for many types of media - then the audience feels that they’re relating with a human on the other end & not superman/superwoman.
The ravages of the Russian nobility have much to teach us bloggers, eh?
Anecdote from yesterday’s PodCamp Pittsburgh Meet-Up: I aked the room how everyone intends to differentiate themselves from everyone ELSE in the room.
“In a way,” I said, “we’re all competitors.” This provoked some differing opinions from the participants.
“Why should I listen to one person’s podcast instead of another?” I asked.
“You don’t have to choose,” someone said. “Just download them both to your iPod.”
“Yes,” I said, “but which one will I listen to FIRST?”
Time continues to be the only resource each of us has exactly the same amount of, and everyone wants to be worth your time. What are each of us doing to mkake ourselves worth another person’s time?
this has become a very interesting thread. i want to tee off from the un-expert idea because it resonates with me. Being a supposed “expert” in the field of videography or visual storytelling (two emmys, six Society of Professional Journalists Dateline awards, a reel chock full of history and world travel), I can tell you that the un-experts have bitch-slapped the “experts” and are taking over the world. I say that with great humility, respect and awe for those (myslef included now) un-experts. I can tell you the “experts” are scared…VERY, VERY scared. I was at 30 Rock on Monday and the implications of IPTV have them trembling. Funny, people who a couple of years ago wouldn’t give me the time of day, now want to do dinner LOL. Seems to me the should be getting in touch of all of YOU GUYS!!
I posted my longer thoughts on my blog http://ericrochow.com/?p=89, but suffice to say my experience is similar to Jim Long. After creating my internet video show, http://gardenfork.tv, they finally start calling.
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