Over the past few years podcasters have explored going premium, moving beyond advertizing supported models towards direct subscription and donation models. In this blog series we are going to interview some of the innovators who have pioneered that model to understand what worked and what failed.
Additionally, we are going to look to interview pioneers in paid content from other sectors like gaming and fantasy sports. Finally, we are going to build a framework to help us think about paid content and attempt to create a roadmap for how the industry builds towards a two income stream, direct and advertizing, future.
Firstly, a bit about the author. I’m the co-founder and CEO of Flick Chat, a group chat platform for podcasters. Previously I was co-founder and CEO of FanDuel, a daily fantasy sports product that transformed the fantasy sports industry and is now the leader in US sports betting. We founded Flick because we believe the same situation that existed in fantasy sports in 2009 exist in podcasting today.
To put that belief in raw numbers, in 2009(when we launched FanDuel) there were about 25 million fantasy sports players in North America and the industry did about $50 million in revenue (nearly all advertizing). So about $2 per user per annum. However, by 2015, while player numbers had maybe grown to 30million, revenues had exploded to $350 million. All of that growth came from direct revenues from consumers. That is, advertizing remained about $50 million, while transactional fees zoomed from around zero to $300 million in 6 years.
One misconception to get out of the way is this is an either/or decision. Either you do advertizing or you do subscriptions. Most recently Tim Ferriss decided to run an experiment by switching from an ad supported model to a subscription model. However, very quickly, he reverted back to the ad supported model.
Actually, as you will see in this blog series, many of the most successful media companies, from Twitch to ESPN, rely on dual advertizing/subscription income streams. We believe podcasting has the opportunity to do the same, with the scale and growth opportunities of ad supported free to air combined with the monetization potential of subscriptions.
However, to get there we need to deeply understand podcaster listeners and what they are willing to pay for (and what they expect to be free). We’ll start to explore that in the next blog post, the PREMIUM model of Going Premium.