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When there are 20 ways to do something, pick the one that creates the most value.
There are many ways to monetize podcasts: ads, affiliate, selling merchandise, hosting offline events, subscription, exclusive content, donations, among others.
But with so many options, which is the best one? It's impossible to predict which one will work best.
The Agile Route
You can go the agile route and experiment with all of them and figure out which gains the most traction. This is definitely one way to approach it.
But let's go the Value Route
Another approach is to figure out what brings the most value to your most important stakeholders. In this case, your most important stakeholders are the creators, listeners and advertisers.
So if we go the value route, let's analyze one option: Advertisements & Affiliate.
How could we provide the most value to all stakeholders through Ads and Affiliate marketing?
Option #1: Creator Reach & Revenue Platform
You focus on creating a platform for creators that help them gain control over their content, audience, and revenue, while at the same time creating more information for you and for potential advertisers.
What would that tool provide the creator? Mainly metrics and receiving payments.
The three main metrics would be:
Reach. How many views/listens do I have. How long do they hear my podcasts, where do they drop off, etc.
How does this provide value for:
Creators: Helps them understand viewing habits and continuously improve their craft.
Listeners: Continuously better content.
Advertisers: Information to know how many people they can reach.
Market. Geographic data is important, but this is a place where Spotify can and has gotten creative. Spotify could start building look-a-like audiences a la Facebook, by surveying a small percentage of their listeners on their likes/dislikes. This could be handled by offering to build playlists based on things that are not related to music. If you like Basketball, you might like these songs. But even deeper: you like Basketball, the Dallas Mavericks, and Luka Dončić, you might like these songs.
How does this provide value for:
Creators: Helps them understand their audiences likes and dislikes and could craft content around this.
Listeners: Content catered to their likes.
Advertisers: Information to know what to advertise to whom.
Influence is the ultimate metric. The creator can understand how many ad clicks or affiliate link clicks they have influenced, how many purchases, etc. Creators should also be paid through Spotify. This is the best way to track their influence.
How does this provide value for:
Creators: Helps them find out how much they are making, what products their fans like the most.
Listeners: Advertisements and products marketed that are closer to what they like.
Advertisers: Information to know what products are getting sold/clicked on the most.
Payments functionality is a must. It is key to funnel creator payments through Spotify. Not just to get a percentage of how much a creator gets paid, but to close the circle of information.
How does this provide value for:
Creators: Tools in place to provide a safe, secure, and easy way to receive money.
Listeners: Easier to entice top notch creators to Spotify, improving the content offering.
Advertisers: Safe & easy way to manage and pay creators.
What's in it for Spotify?
How does this help Spotify monetize podcasts? Spotify shares these insights (Reach, Market, Influence) with advertisers so they have more certainty. Certainty that if they advertise with certain creators, they will get their money's worth. Reach, Market and Influence are the three most important metrics you could offer any advertiser. Once you can offer advertisers this, they will pay top dollar to be a part of the Spotify ecosystem.
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