Why Most Podcasts Never Make Money

There are over 3 million podcasts in the world. The vast majority of those podcasts make $0 ever. Here's why. And it's the thing that nobody tells you before you start a podcast. Podcasting is a long-term play. If you're not willing to commit to podcasting for at least 2 years before you even judge whether it's working or not, it's not gonna work for you. Don't start the podcast. But if you are committed to starting a podcast, there is a way to win, and that has nothing to do with getting sponsors. Today we're going to open up the books. I'm going to share with you real data from my own podcast and share with you the truth of the podcasting industry. I've been doing this for a long time, 12 years, over 2,800 episodes and counting. And I'm going to tell you how we are able to achieve the success we've had But also how hard it is. We recorded over 200 episodes of this podcast, the $100 MBA Show, before we had a single sponsor. Today we have over 100,000 downloads per episode. I'm going to show you the real numbers of the industry. I'm going to show you why most podcasts fail and a smarter way to approach podcasting so that your podcast pays. Let's go. Let's start with the hard data because there's a fantasy version of podcasting out there on the Instagrams, on the TikToks. Okay, the average podcast— not the worst podcast, but the average podcast— gets 28 downloads in the first month after publishing according to Buzzsprout, which is a podcasting hosting platform. Okay, 28 downloads. The majority of podcasts never exceed 100 downloads total. We're not talking about per episode, we're talking about out of all their episodes combined. They don't actually exceed 100 downloads. If your podcast does over 100 downloads per episode, that puts you in the top 25% of all podcasts. If your podcast does more than 1,100 downloads per episode, it puts you in the top 5%. If your podcast does more than 5,400 downloads per episode, it puts you in the top 1%. Now, just to put it in context, our podcast does between 80,000 to 100,000 Downloads per episode. Our best episodes do well over 130,000, 140,000 downloads per episode. Now, you might be thinking, Omar, you— that probably puts you in the 0.0001%. I'm not even one of the top podcasts in the world. You know, like Joe Rogan, Mel Robbins, these people, they do millions of downloads an episode. Now, here's where the monetization problem comes into play. Sponsors typically want to see at least 5,000 downloads per episode before they even consider sponsoring you. I know this because as soon as I started to hit that number, we were starting getting approached by sponsors. But just to put it into context, okay, basically you need to have at least 5,000 downloads per episode. That puts you in the top 1% before getting any traditional sponsorship on your show. That's a very small— that's a microscopic percentage of podcasters making serious money From sponsorships. And it's getting even more difficult as each day goes by. There are now around 350 new shows launching every day, okay? Most people quit long before they build an audience big enough to actually matter and get some sponsorship, okay? This is also called as pod fade. This is like a term in the podcasting world. People have pod fade where they start to fade out of the industry. Many shows, many business owners, many podcasters I know personally don't make it past a handful of episodes. Okay. It's crowded and it's a slow play to win at podcasting. And that leads me to why most podcasts die. Most of them die because they want a return too soon. Podcasting is not something that you're going to get a lot of benefit from, especially if you don't have an audience yet. Right away. Okay. If you have a large audience already, if you have written 5 New York Times bestselling books and you have a Netflix special and you start a podcast, yeah, you're gonna have an audience because you already have an audience. But people that are starting out and don't have much of an audience, they have a very unhealthy expectation of what they're gonna get in return for the investment they're gonna make in creating and running a podcast. They record 10 episodes, 20 episodes, 30 episodes, and they see like 28 downloads, 30 downloads, 50 downloads, and they get discouraged. And they quit. But podcasting doesn't play in that timeline, okay? It's a long-term play. You need to commit for at least 2 years before you decide whether it's working for you or not. Most people aren't willing to do that. They treat it like some sort of marketing campaign that, hey, I'm gonna start podcasting and see how it goes, and if it gets me a return on investment, I'll continue. You're not going to win in podcasting that way. The shows that win are the ones that You still publish when everyone else quits, where you outlast them. You know, I remember I have a screenshot of all the podcasts that were launching the same time we were launching. We're in this, uh, section on Apple called New and Noteworthy. These are the successful podcasts that launched pretty well. And all those podcasts without exception are no longer publishing. Okay. Other than mine, I just outlasted them. The other reason why you need time is because You will suck in the beginning of podcasting, okay? You will not be good, and you need time and you need reps to get better at speaking at this, this new medium of podcasting, at using your instrument, which is, by the way, is your voice. Your voice is your instrument that you have to learn how to play properly and not huff and puff in the mic like you're Darth Vader, like a lot of beginner podcasters, so that you can get better at this thing called podcasting. So let me tell you exactly how It went for us, right? How we found success with this podcast, the $100 MBA Show. We literally put our heads down and just worked on the podcast 4 months before we even launched it, before a single episode was out there, where we just wanted to perfect the first 10 episodes. I rerecorded the first 10 episodes at least a couple dozen times, 20, 40 times maybe. I have a vague memory of recording it, listening back. It's like, this is not good enough. Let me do it again. Do it again. I did that for the first 10 episodes. The reason why is because your first impression does matter. When you're launching a new show or a new thing, people will make a judgment if this is worth their time and worth their effort to kind of subscribe. So I wanted to make sure that the first 10 episodes were amazing. And the reason why— why first 10? Well, because we were a daily podcast, 5 days a week at the time, and we wanted to make sure that We launch really strong. We actually launched with 5 episodes released at the same time. The first day we launched, we put out 5 episodes. Why? Because I wanted our listeners to have enough of a taste of the show to feel like, okay, I do want to subscribe. Enough meat on the bone so they'd be like, okay, cool, this is something I want to hear more of. And then the next day we had the next episode, the next episode. So 10 episodes was kind of required so that we have at least a week buffer. So we recorded our first 200 episodes. By the way, I'm not even mentioning half the stuff, like in order to create the show and to focus and actually make it as good as possible, we had to say no to a lot of our client work, say no to money when we needed money desperately, right? But we really believed in the promise of this podcast, and we really believed that we were able to create something that was valuable for the long term. So, we really focused and recorded the first 200 episodes without making a single dollar, not a single sponsor until— About 4 or 5 months in, we got our first sponsor, which happens to be 99designs, which is our first sponsor or partner for YouTube as well. But I remember that vividly. I remember who it was because it was like, wow, we finally are able to make a return on investment. Now, how many people out there are gonna record 200 episodes before they see a single dollar? Not many. Okay? So this is what I'm telling you. I'm trying to give you what has— what I experienced so that you can Set up your expectations. Okay. A couple of months later, uh, we won Best of Apple Podcasts, which is awarded to the top 12 podcasts or so, uh, that year. Uh, we won it with Serial and Startup and Tim Ferriss, and, uh, that really propelled our show to get a lot of exposure on Apple and grew our audience. And that allowed us to really start benefiting from more sponsor dollars. But my advice to anybody that is starting a podcast is Just focus on making it the best possible show possible. Okay? Why is Breaking Bad a classic as a show? Because it's a great show. It doesn't need to be marketed. People are going to be talking about it now, in 10 years, in 20 years, when it came out, all the time, right? Because it's just a fantastic, unique show. And when we win Best of Apple, I was surprised actually, like I'm a nobody. Why would I be sharing pixels with all these famous people? And I emailed Apple and they told me the reason why you won the award is because you brought something new to the genre of business, short-form bite-sized lessons. So if you're able to provide unique value to your audience, you will be rewarded, but it's going to take some time. I'm hoping you're getting a lot from today's episode so far. I want to make sure you hit subscribe so that you don't miss an upcoming episode. We have Dane Walker, Who's gonna be joining us as a guest, and he's gonna show us how to build a powerful brand that actually makes you money. So you can apply this brand to your podcast, your YouTube channel, to your business itself, so that you're memorable and not ignored. Hit subscribe so you don't miss it. What I'm sharing with you today about podcasting being a long-term play, this is just the story of business. This is just a pattern. This is just a microcosm of what happens all the time. It just never gets easier. You're always going to be in the grind, okay? And I want to be fully transparent. You know, for the last 2 years, we've been building our YouTube channel. We were not on YouTube the first 10 years of our podcast. Now we're trying to grow our audience there, totally different audience altogether. And, you know, I have an established show on Apple and on Spotify with over 300 million downloads in total and counting. And that's great. But I have a new mountain to climb now. And I have to start this grind all over again with YouTube and trying to figure out and try to get better at it. And all that kind of stuff, building a team. This is just how it is. So like I said, I've been doing YouTube now. I've been growing the YouTube channel for about 2 years. We've published over 400 videos, long-form, short-form. And just recently we started getting our first couple partnerships and sponsorships for YouTube. So 2 years of work and investment before seeing any kind of return. Why am I being vulnerable and why am I telling you, You know, what's happening in my own business, because I wanna make sure I drill this home. This takes a while. It's very crowded out there, whether it's podcasting or YouTube or whatever it might be. You have to work at it for a long period of time. So one, you learn how to get better at the craft. 2, you understand the platform that you're publishing on. So whether it's audio or video or Instagram or whatever it might be, and understand how to build content for that platform. It just takes time because it's so competitive. It's very crowded. I'm also sharing my story because if we, with our audience on audio, everything that we built, our email list, everything, it needed 2 years for us on YouTube to start monetizing. That means a lot, right? It means that, hey, even though I have an existing audience, that audience doesn't live on these platforms. I need to create a new audience here and I got to be willing to do the work to get there. Now there are other ways to monetize a podcast or a YouTube channel. Outside of sponsorships or partnerships. And the data backs me up on this. There are way more podcasters making money by selling to their audience and not selling their audience to advertisers. Chasing sponsorships means you need to crack the top 1%, like we talked about, at least 5,400 downloads an episode just to start getting a few dollars from sponsors. But selling your products and services to your listeners works at a fraction of that audience size. Now, I want to be honest about this because there's a correct way to do this and there's an incorrect way, and I want to make sure you do the right thing. You'll hear people say that even 30 to 100 listeners can get you a high-ticket client. In my experience, that's overly optimistic. The real number is a bit higher. You need something more like 500 engaged listeners per episode to really realistically land a client or 2. But that's a fraction of 5,000 in order for you to get sponsorship. Okay? If you get 500 people listening to your podcast week after week or episode after episode, and they're the right type of listener, that beats 50,000 random ones that really are not perfect for what you offer in your business. And that's exactly why you need to niche down. If your idea or your game plan is to create a podcast to market so that you can get more clients and more customers for your business, then your podcast needs to be really niche. Your game here is to make sure that whatever your audience is going to buy from you is closely aligned with the podcast. You don't want a big general audience. You want a specific one, right? If you have a big general audience and you're like a comedy show, for example, you're going to be able to grab a big portion of the population because a lot of people like comedy. And it's going to be a little bit easier for you to have some sponsorship because you could pretty much sell anything to everyone. Okay. Uh, from a Mercedes-Benz to dog food. All right. If you want your listeners to buy your products and services, then you need to make sure that your podcast is basically a sample of what you offer. And I'm going to get very specific here and give you an example, because a lot of people get this wrong. Let's say you're a business coach. You teach other business owners how to get better. You coach them through their problems, how to get through milestones. All right. And this is what you do for a living. This is how they pay you through your coaching program. You get on live Zoom calls and you work through problems, right? A lot of people, they think, okay, I'm going to do a podcast. I'm going to interview experts in the industry. I might do some lessons. This is not really aligned with what you do. Yes, you're showing your expertise. Yes, you're showing value by getting an expert, but really you want to give people a taste of what it's like to be a client. So what you should do is coach people on the podcast. Okay? Get some of your clients and record that as an episode so that people can see and watch and see the transformation for themselves and say, oh, this person knows how to help people with my problem. I'm going to sign up for a product or service or their coaching program in this example, because I just witnessed it on this podcast episode. This is also the answer to, is it worth starting a podcast as a marketing engine? Yes, but not as a sponsorship play. Make sure you understand that your podcast is basically content marketing. You need to provide a similar experience, like I mentioned, similar content To what you are selling. Your podcast is gonna allow you to build trust, authority, uh, a real relationship with your audience very quickly. Uh, I, I love podcasting in particular because it's very intimate. People are listening to you. They're, you're in their ears while they're doing their dishes or folding their laundry or at the gym, and you have an, an extended amount of time. This is not a 30-second reel, okay? You have 15, 20 minutes, 30 minutes, even an hour. With this person. So you build a relationship with them and they start to trust you. I've been lucky enough to have both of my podcasts where we get sponsorship dollars, but we're also able to market our products and services just by the brand itself. So if I send out an email to my email list and say, hey, we're running an event or we're selling a program or we're doing a live webinar, it's not so hard to sell because I've already proven to my audience what I can do for them. So I want to give you a filter that you can use if you're asking yourself, should I start a podcast? Okay. Don't start a podcast if you are purely trying to find sponsorship dollars and you're not willing to put in 2, 3 years of commitment. Okay. If you're trying to get a return in a month or 2, 6 months, not a good idea. It's going to take some time to grow that kind of audience where it demands sponsorship dollars. Next, don't start a podcast if you have a business and you're trying to drive attention to that business with the podcast. But your podcast is not aligned with what you do with your products and services. Make sure it's closely aligned. Another example I can give you is Ramit Sethi. Ramit Sethi's got an amazing podcast called Money for Couples. Guess what? He's got a bestselling book called Money for Couples. What does he do on the podcast? He coaches couples with their money problems. Okay. So first of all, amazing, unique podcast idea, but it's exactly what he offers with the book. So in summary, I shared with you the podcasting industry numbers. And as you could see, most podcasts don't make money on sponsorship because they're not willing to put in the time it takes to grow that kind of audience to get 5,000+ downloads per episode to start hitting that threshold. But if you're somebody who loves to podcast and enjoys it and is willing to do the work, please go ahead. It's one of my favorite things I do every day, okay, is work on this podcast. So it's been a part of my life for 12 years. So it's part of who I am. So what I'm encouraging you to do is to commit if you really want it. If it's not your jam, that's okay. There's other things you can do. You could build other ways to market your business and market your products and services. You don't need to start a podcast just because everybody else is. If you're in the thick of it right now, you have a podcast and you're thinking about quitting. Remember, most people quit long before they should, right? So hang in there. You might outlast your competition. Also remember, That this is just a microcosm of what's going to happen over and over in business. You're going to be in this grind with a new venture, with a new type of offer in your business, with a new challenge that you're going to have. You know, you're going to have the challenge of growing a team. You might have the challenge of starting a new product line or a new business altogether or a new investment. The point here is, is that you're going to be a newbie and you're going to have to work at it at something at every point of your trajectory and your success. But one of the biggest advantages of starting a podcast is that it's a long-term game. Long-term games give you long-term results, right? If you put in 2 years, 3 years, 5 years, 10 years of podcasting, that impact is not going to disappear overnight, right? You're going to feel that impact. It's going to help you and your business and your brand well beyond that time. So if you're willing to build your podcast Build it right. And to help you with that, we have a recent episode you might wanna check out. So scroll back to How I Grew My Podcast to 300 Million Downloads, My Exact Playbook. It shows you exactly what I've done over the years. It also shows you my mistakes so that you can avoid those mistakes yourself. So go back to that episode. Uh, we published it about a month ago, so go ahead and check it out. If you wanna go deep on how to build a really powerful podcast that actually gives you a return on investment. Thanks so much for tuning in. I'll check you in the next one.