Podcasts have gone from a niche hobby to a major media business, with the biggest hosts earning tens of millions of dollars. Here’s how podcasts make money, and why video is changing the industry.
A podcast is an audio or video program that people can stream or download, usually as a series of episodes. Podcasts cover everything from news and business to comedy, true crime and sport.
Millions of Australians listen to podcasts every week, and the industry has grown into a significant business worldwide.
Advertising
Advertising is the biggest source of podcast revenue.
Host-read ads, where the presenters read the ad themselves, often in their own words, are popular with advertisers because listeners tend to trust the hosts.
Many podcasts also use dynamically inserted ads, which are added to episodes automatically when they’re downloaded or streamed. That lets the same episode carry different ads depending on when and where it’s played, and lets older episodes keep earning money.
Advertisers usually pay based on the number of downloads or listens, at a rate per thousand.
Subscriptions
Some podcasts charge listeners for extra content, ad-free episodes or early access, through platforms such as Patreon, Apple Podcasts subscriptions or Spotify. Listener-funded shows can be very profitable for creators with loyal audiences.
Exclusive deals
Big platforms have paid huge sums to sign popular shows. Spotify paid a reported US$200 million or more in 2020 for exclusive rights to The Joe Rogan Experience, before signing a new non-exclusive deal in 2024 worth a reported US$250 million.
Video and YouTube
Video has become central to podcasting. YouTube has become one of the most popular places to watch and listen to podcasts, and many shows now film their episodes in studios.
Video lets podcasts earn money from YouTube’s advertising revenue sharing, and lets clips spread on social media platforms such as TikTok and Instagram, attracting new audiences.
Measuring audiences
Podcast audiences are harder to measure than radio or TV. Downloads are the most common measure, but a download doesn’t guarantee someone listened. In Australia, the Australian Podcast Ranker publishes rankings for podcasts from participating publishers.
Australia’s podcast market
Major players in Australia include radio companies such as Southern Cross Austereo, which runs the LiSTNR app, and ARN, which runs iHeartRadio in Australia, as well as public broadcasters, newspapers and many independent creators.
The challenges
Most podcasts make little or no money. Audiences are concentrated among a small number of hit shows, and advertising budgets can fall quickly when the economy slows. But low production costs mean podcasting remains one of the easiest forms of media to start.
