by Lee Gibbons, Podango CEO  

TechCrunch posted about Podango this a.m.  The post brought out some really good and insightful questions and conconcerns. In particular, in response to this comment by Startups.in/India “Well, it does say “$25k to 250k per year or more. (Mileage varies)” but how exactly? Any details on that front?”  Mike Arrington responded, “My guess is that Podango will take some grief over that quote.”  So, in anticipation of that grief, I thought I would post and help clear up questions related to “that quote.”  There are a few things to understand about the model that will help this become more clear:     

1. Station Directors own their Podango Podcast Station. It is their media property. And, anyone with passion, demonstrable influence within their niche or community, and the drive to make a Station a success can acquire their own Podango Station for FREE.  
2. Podango is subject to all the normal economics that affect content oriented companies; we are not defying gravity or anything here. We fully acknowledge that the distribution curve of money earned by podcasters and Station Directors will look like any other product serving the markets we serve. It will have a very narrow, tall head, and a very long tail. We are planning on, and have built our product around, a verrrrrry long tail. What this means, in direct response to the quote, is that most “successful Station Directors” will be on the low end of that scale. Still, compared to what they can garner without a model like ours, that is pretty sweet.  
3. The quote was focused on “the earning potential of successful Station Directors,” not individual podcasters or, as noted above, the average Station Director. Many Station Directors will be content to serve their communities of interest out of their passion for the subject matter, and won’t even care about the money end of it. Others are definitely signing on in response to the opportunity created by the aggregation of great podcasts within a niche market, and the sponsorship dollars that will flow as a result. 
4. The standard split between the Station Director and Podango is 70%/30%, where Podango keeps 30%. for that 30%, Podango provides the infrastructure–including storage and bandwidth, payment systems and analytics, and sponsorship acquisition, allowing the Station Director to focus on acquiring permissions and relationship building with podcasters. Podango’s early experience in dealing with sponsors and podcaster who are signing on is that we will achieve between $20.00 and $50.00 CPM. Stations, by their aggregated nature, will attract more listeners than the individual podcasts comprised in the station. Stations also have more ad slots or impressions to sell than do the individual podcasts that make up the station. Stations are also highly targeted, making their audiences more appealing to sponsors and pushing the CPM potential northward. 

Here is a review of the math. Although Podango Stations are sponsorship based, it is still useful to use CPM to calculate potential. 

The components of the equation are: Number of Listeners (L), Number of Impressions per Month (I), Revenue per Impression (R), the Station Director’s Revenue Retained in Split with Podango (D), the Average Percentage Retained in Split with Podcasters (P), the Number of Sponsors (A), and Periods per Year (n). 

The formula then looks something like:  L * I * R * D * P * A * n 

A practical, relatively conservative, and round example would be for a Station Director that has 10,000 Listeners to her station, to whom she delivers an average of 40 impressions per month (that is just 10 per week), for which she receives $0.03 per impression, retaining 70% of gross sponsorship revenues, and 20% of her 70% after paying podcasters, over a 12 month period, with an average of two sponsors. 

That is 10,000 x 40 (400,000) x $0.03 ($12,000.00) x 70% ($8,400.00) x 20% ($1,680.00) x 2 ($3,360.00) x 12 = $40,320.00 

So that is the math. The degree to which our Station Directors can realize projections like those included in the TechCrunch post will depend upon many variables, but it is within reach, in our opinion, and we have built a great site with world-class infrastructure and a great team to do all we can to help it happen.  We think this is the kind of model that will ultimately solve a number of problems that exist in the podcasting market today.  We sure hope we’re right!

If you disagree with elements of the model, please don’t just go away mad. Help us figure it all out! Better still: grab yourself a Podango Station and give it a whirl!