Why Subscriptions Matter

Despite minor drama and lots of new options, the underlying fact is that subscriptions will unlock the next level of podcasting, and this is great.

Welcome to Dispatch #10 of The Audio Insurgent

That’s right, #10. When I started this, mostly on a whim in January, I had very small expectations for what this could be. I thought I’d be happy if I got 200 subscribers, as long as they were the right 200. I ended up with more than 300 in the first 24 hours, which blew me away. I said if I ever got to 1,000 subscribers, I’d take this more seriously. In the months since, that number has risen to 891 subscribers. When you factor in all the people who pass this around, read it online, or via social media posts, the number of readers for each dispatch is in the thousands. My reader-to-subscriber ratio is probably 10:1.

So I’d like to ask for your help in getting the subscriber number to 1,000.

If you are a current subscriber: Could you tell someone else about The Audio Insurgent? You can forward this email, post about it on social, or text someone who might be interested in being a part. If you could share just once, I’d be grateful.

If you are a reader, but not a subscriber: Would you mind hitting the button below and subscribing? It is free. I can’t promise that I’ll always say smart things, but I can promise I’ll be judicious about what I post and respect that your time and inbox are valuable.

1,000+ subscribers feels like a real thing to me...and I have to admit I get a tiny thrill every time I get a new subscriber notification in my inbox. 

So, can you help?

Thanks.

And you are also always welcome to buy me a coffee...except I don’t drink coffee. But if you use the BuyMeACoffee link, it will go towards Stone Brewing IPA (the best production beer I’ve ever tasted) or my favorite table wine, Ciliegiolo, or as it is called in our house, Klingon Jello.

Today I have one thing...


[ONE THING: WHY SUBSCRIPTIONS MATTER]

There has been a ton of conversation about recent moves by Apple (as well as earlier and further rumored moves by Spotify) giving creators the option to offer podcast subscriptions on their platform. I have no interest in piling on to that coverage.

Instead, today I want to talk about why subscriptions are important

There is a former radio colleague of mine that reads this newsletter and recently responded by saying, “Boy, you sure hate advertising, don’t you.” (His job is in ad sales.)

Let me be clear. I love advertising. Or more specifically, I love revenue. Advertising is an important source of revenue. But it isn’t the only source, which is where I tend to get concerned.

It isn’t that I dislike advertising. I dislike it when any media creator relies on one source of revenue.

Any podcaster who wants to have healthy longevity needs to pursue multiple revenue sources simultaneously. There are numerous reasons why relying on one revenue source is a bad idea:

  • It ties you to the ups and downs of that revenue source. If your one revenue source has a bad year, you have a bad year. If your one source of revenue falls out of favor, then you fall out of favor.

  • It creates a glass ceiling for your editorial and creative ambitions. For most podcasters, there is only so much money you are going to realistically make through advertising on a single podcast (or any one revenue source). Unless your name is Kara Swisher, Joe Rogan, or Ira Glass, that cap creates a limit to what you can spend making things, and that ceiling is probably going to be lower than your creativity.

  • The one who pays for it is the one who gets to determine what you make. If all your money comes through advertising, congratulations, your organization's new Chief Content Officer is the person selling the ads--and they will gravitate towards developing shows that are easy to sell. Since they generate all the cash, they are now the most powerful person in your company, and they decide what goes.

  • It is a race to the bottom. Look at any media created using advertising as its single source of revenue: broadcast TV and radio being great examples. The need for growing profits forces companies to expand margin by reducing costs. The content gets cheaper and cheaper, and worse and worse, audience declines, and things spiral.

As I’ve written before, there are four sources of revenue for podcasters (and they are 1. Advertising, 2. Listener-sensitive revenue--everything from merch to event tickets to subscriptions, 3. Derivative rights--making your IP into a book, movie, board game, course material, etc, and 4. Institutional support--when someone pays you, gives you a grant, or underwrites your production).

Yet for the past few years, all the media conversation about podcasting has focused on ad revenue. Endless articles and posts have pondered at what point podcasting would become a billion dollar industry. What they are really asking is when podcast advertising will reach a billion dollars, as when you include other revenue sources, we likely passed a billion-per-year several years ago.

But out of all the potential non-advertising revenue sources, subscriptions pop way ahead. Just as advertising can lead you to pursue behaviors that aren’t in your long-term best interest, subscriptions can point you towards behaviors that are definitely in your long-term best interest.

Let me explain.

I come to this conversation just a few years out from a career in public radio, which pioneered listener contributions four decades before the first person asked, “What the hell is a podcast?” Someone could write a book (or a pretty substantive newsletter) simply focusing on the lessons that podcasting could learn from their public radio cousins about routinely receiving money from listeners who don’t have to give it to you. Seriously, there is so much institutional knowledge embedded in public radio around pledge/membership/listener contributions that could save podcasters years of false starts and ill-fated experiments.

Perhaps I’ll write more on this later, but let me hit on a few things that public radio can teach us at this moment:

Contributing listeners stick with you. You might think that when the economy gets lean, giving and subscriptions would go down. Weirdly, they usually go up. As public radio has proven over the years, the listener needs to understand the importance of their contribution to your work. When times are tough, listeners get this, and show up for you by supporting you directly. A terrific example of this just happened earlier this week, when Glenn Greenwald threw some shade at Charlie Warzel about the “slow start” to his newsletter. Charlie reports that he ended up getting thousands of dollars in subscriptions, just because Greenwald was giving him grief. When you need your listeners, they will show up for you too with subscriptions. In fact, played right, listener subscriptions can be your most stable, valuable, and growing revenue source.

You are beholden to your benefactor. I mentioned this earlier as a weakness, but it can also be a strength. Who do you want to work for? Some idiot selling mattress ads or your audience? You want to be beholden to your audience. And that perspective shift keeps you making really positive decisions across the board.

The ask is so, so, so, so critical. Great, there will be a button there to subscribe. Some people will click it all by themselves. Terrific. But after that initial flush of newness and excitement, you are going to need to ask them to subscribe. When you do, focus on the importance of that contribution and, this may seem odd, less on “what they get” and more on what you’ll use the money for. Will subscription income pay for additional content, hiring more producers, taking on a big project? 

Don’t treat it like a transaction. This isn’t like subscribing to the Sunday New York Times (even though it is unfortunately set up this way). That subscription unlocks a gate for a more intimate connection between the audience and you.

Whatever you offer as a perk for subscribing (ad-free, bonus content, early access) should be predicated on honoring this as a relationship. That is why they hit the “subscribe” button in the first place. It isn’t give and get. 

And I could have easily embedded a dozen links above to this study, led by my long-time friends John Sutton and Leslie Peters. But let’s just say that any podcaster thinking about starting subscriptions would benefit immensely from the 15 minutes it will take to read this classic piece of research (which, in case you are worried, is still 100% relevant today).

So, despite my enthusiasm for subscriptions, I do have two caution points when examining your options:

  • Who owns the relationship? This dispatch is hosted on Substack, but if I decided to move it over to MailChimp or TinyLetter or whatever, no problem. I output my mailing list from here, then import it elsewhere. Outside of a design change, you may not even notice this is happening. When I switch podcast hosts, the transition is so smooth and seamless that 99.99999% of listeners don’t notice. But not with many podcast subscriptions, it appears. Even if you get tens of thousands of podcast subscribers, if you decide to leave, you are starting over again from zero--and it will be a mess.

  • Audio-only? Apple’s offer assumes that the only things that need to be exchanged are audio files, which is really deflating. Spotify expands that to audio and video files, but that is still depressingly limited. Again, this isn’t a transaction and it isn’t like subscribing to a magazine (does anyone still do that?). It is a relationship--and relationships can be conducted using lots of formats: messages, conversations, forums, and all types of media. So let’s say that I want to do a live event (they will happen again at some point, I promise). And let’s say I want to give my subscribers first chance at tickets, or offer them a discount. Under these subscriptions, no can do. You can release an audio file with the info, but I can’t believe anyone actually thinks that will be effective.

But those concerns aside, as well as a few other tiny things, subscriptions are so smart--and you are so smart to experiment and learn what works for your show and your audience. And even though there are trouble points, I’m grateful to the platforms for making the investment to give this a go. It is probably the most creator and listener-focused initiative I’ve seen in the history of podcasting, since the invention of podcasting.

But the most important reason to pursue this is that there are people there who will gladly support you. The value of this goes WAY beyond just money, but there is money there, sitting uncollected on the table.

Seize it.

So, yes, these developments are a huge deal that will change podcasting. And that’s a great thing.


Okay, that’s it for this dispatch.

If you read this somewhere other than your inbox, could you consider subscribing? It’s free. Getting 1,000 subscribers is admittedly kind of meaningless, but it’s important to me.

And as I mentioned earlier, you are also always welcome to buy me a coffee...except I don’t drink coffee. But if you use the BuyMeACoffee link, it will go towards beer, most likely, and that’s the fuel for my best ideas.

Make great things. I’ll be listening.

--Eric