Several of the podcasts I listen to offer a Patreon (or similar “premium”) subscription service to generate more income for the host. The premium service includes additional content, early releases, Q&As with members or sometimes full content from “teaser” episodes that were cutoff halfway through for free listeners.
I get why podcasters are doing this.
- They want to make additional money beyond advertising.
- Some do not use advertising so this is the only way to generate income.
- Others want income that is not subject to “blocking” by podcast platforms and YouTube for content violations
It makes sense to me.
The premium subscription is usually fairly cheap at $5 to $10 a month. The hosts often say something like “for less than the price for a cup of coffee” you can get this.
Here’s where this sales pitch breaks.
You are not competing with a cup of coffee. You are competing with Netflix, Amazon Prime and YouTube who all offer unlimited hours of entertainment. Netflix costs me $6.99 a month. Amazon includes it for free with my Prime membership. YouTube is free.
So now, your listeners have to be convinced with something other than the low price. Maybe they’ll pay because they like the host and want to support him (like a charity). Some may actually love the “bonus content” and early access and are willing to pay for it.
Most, like me, won’t bother.
When I sold Network Security services back in the early 2000s, we offered fully managed network security monitoring & support for only $500 per month.
I couldn’t believe how few of our small business prospects purchased this service.
At the time, network security consulting was $100-$200 per hour. Firewalls and Intrusion Detection devices could easily cost $5K- $10K and required expertise to install and manage them.
Our monthly fee was so low, it was ridiculous compared to the cost of doing it yourself.
After landing only a few accounts in 6 months, I was speaking to one of our board members about this and he said,
“You’re running into the rent ceiling. Your prospects aren’t comparing your monthly price to doing it themselves. They’re thinking, ‘I pay $1000/month to lease my office and this security is costing me half of my rent!’ “
He was right. We changed our strategy and focused on much larger companies for whom $500 a month was nothing compared to their rent. Because regardless of the great deal I was offering, I couldn’t win when I was up against the rent ceiling.
I carried this lesson with me for the rest of my sales career and it always held true. Many of the sales teams I was brought in to improve were focusing on prospects who were simply too small to afford the product – whether it was $100 a month or $10,000 a month.
When we pivoted to larger companies, we increased sales.
So what advice would I offer the podcasters?
Because they are “pitching” individual listeners, they will likely fail to generate enough income with premium subscriptions.
If I were in their shoes, I’d be pitching larger podcast conglomerates or services who would pay me directly, generate significant revenue from advertising or both.
I wish it wasn’t the case.
I love the idea of a lean operation with complete autonomy that can “stick it to the man” who still makes good money.
It can be done – occasionally, for outliers.
But very few people are outliers.