Podcasting 2.0 introduced a new way for your audience to support your podcast by sending micropayments. This is usually measured by satoshis (abbreviated as “sats”), which are one hundred millionths of a Bitcoin. As such a small portion of cryptocurrency, many people might wonder whether the effort is even worth the return.
The following is not financial or investment advice!
As you can probably guess from the word itself, micropayments are very small transactions. The business world often considers any transaction below $20 to be a micropayment. But where our personal finances are concerned, we might think of micropayments closer to $5 or below.
With a Podcasting 2.0 podcast app, audiences can stream satoshis (“sats”) to Podcasting 2.0 compatible podcasts by automatically sending small amounts (such as 100 or 1,000 sats) for every minute of listening. Another way is to send a “boostagram,” which is a one-time payment that can include a message—the “gram” part comes from the idea of a telegram, and the “boost” part (a term often used in podcast apps) comes from the idea of boosting how much you're supporting because you liked something you heard at a particular point in the episode. Perhaps even boosting beyond the amount you normally stream to the podcast.
You might hear some podcasters mention their boosts or streams from only a couple hundred sats to a hundred thousand or more. While these numbers seem large, they still convert to small amounts in USD (at least as of March 2023).
But that's actually a good thing! And before I can explain that, we need to look at a current big problem.
PayPal and Stripe are popular methods of receiving payments. It's now quite easy to put a button on your website, allowing your audience to support your podcast through one-time or recurring donations, even with a credit card.
It used to be that the only way you could take credit card payments was with a “merchant account” that would have its own monthly fees. But PayPal, Stripe, and other services have made it far more affordable and accessible to receive payments, including ACH transfers, paying from a balance, or debit/credit-card payments.
Even though there's no monthly fee for these modern payment methods, there are transaction fees. As of March 2023, those fees are usually about 2.9% of the transaction plus a flat fee of 30–50¢.
You might already see the problem: if your audience wanted to donate $1 via PayPal, you would get less than half of that after PayPal's 2.89% fee and the 49¢ flat fee. Even worse, those fees will likely be even higher outside the USA!
Losing around 50¢ might not seem like much, but multiply that by how many people might be willing to give you $1 donations per episode or per month. At that small of an individual donation, you would lose half your income in payment fees!
Even worse, this makes 50¢ donations impossible!
The “value” feature in the Podcasting 2.0 standard (added with the
<podcast:value> RSS tag) allows you to receive sats from your audience via a Podcasting 2.0 podcast app. They can choose to send any amount of satoshis, and you will probably pay only a small percentage in fees—but no additional flat fees!
Consider the $1 example again. Legacy payment systems would take around half of that. But receiving the equivalent amount in Satoshis would cost you only around 3–5¢, depending on the small fees in the payment chain. While that 3–5% could obviously be higher than other payment methods, that percentage is all you pay!
Thus, you could receive even a 10¢ donation and still keep nearly all of it!
When you send a payment via PayPal or Stripe, those large corporations are receiving those fees.
Even when if you use a donation system built for content-creators—like Patreon, Glow.fm, or Supercast—the payment fees (often much higher, like around 10%) are going to those companies.
But when you use the Podcasting 2.0 “value” feature for micropayments, you and your audience can know that any fees are going to the people actually making the podcasting engine run!
For example, if you generate your RSS feed with Blubrry's free PowerPress plugin for WordPress, then a small percentage goes to Blubrry for maintaining the free PowerPress plugin. Another small percentage probably goes to the podcast app, like Fountain, to support its development and to keep it free or inexpensive. And another small percentage might go to Podcast Index, which maintains a free and open podcast catalog and robust API for podcast-app developers, keeping this ecosystem open, free, and away from corporate control or censorship.
This means what little fees are taken out are supporting the people actively involved in helping you engage with your audience. I think that's much better than seeing those fees go to large, faceless corporations who care very little about what you do.
Plus, this makes your audience the sponsors of your podcast, more deeply engaging them. And if you thank your audience supporters in your episodes, you're investing that time back into relationships with them instead of shilling for a sponsor.
A satoshi is only one hundred millionth of a Bitcoin. Kraken provides a handy converter for USD, but here's a quick way to do the math yourself: every 1,000 sats equals the cost of Bitcoin in pennies.
So if Bitcoin is worth $25,000, 1,000 sats would be worth 25¢, 10,000 sats would be worth $2.50, and 100,000 sats would be worth $25. (I'm sorry that I can't provide the conversion for other national currencies.)
Receiving only 1,000 sats per episode might sound pointless, but multiply that by how many episodes you publish and how many people would be willing to give you a mere 25¢ if it's easy and integrated into their podcast apps! Plus, remember that such a small transaction would be completely impossible with most other payment systems, and yet you get to keep nearly all of it!
Many studies regularly confirm that usually only 3–5% of an audience will buy or donate. I often wonder why that number is so low. Could it be because the price is too high? Could it be because the process has too many steps? Or could it be because they can't take immediate action?
The beauty of these modern micropayments is that they're being built directly into the podcast apps! This means your audience would be able to automatically stream sats to you while they listen, or it could take only a few taps for them to boost or send a boostagram all without leaving their podcast app or interfering with their listening experience!
I know that right now, it's still a little complicated for audiences to get into this ecosystem. But developers know that has a high barrier to entry, so they are working to make it much easier. And I feel quite confident that the process will improve every month. Imagine how much easier it could be in only a year!
Some people enjoy sending hidden messages or being meaningful with their donation numbers. For example, a donation with the numbers “1776” has been called the “liberty” donation because of the United States' declaration of independence in 1776.
But maybe your patriotic audience can't actually afford $17.76. But they can afford 1,776 sats!
And if they feel that the amount is actually too low, they can simply add some zeroes on the end, multiplying the value by 10 or more!
I remember a little book from my childhood Sunday school that taught kids to use a calculator with different numbers from the Bible, and then you turn the calculator upside-down to solve the riddle. For example, 37818 on a traditional calculator would spell “BIBLE” upside-down.
This highly divisible micropayment approach offers limitless yet affordable possibilities for fun numerology in your donations!
You might be thinking that none of this is worth it when your audience could be sending you only pennies.
First, remember that you get to keep nearly all of those pennies!
But you might still be thinking a traditional CPM-based sponsor would be more profitable. “CPM” stands for “cost per mille,” which means per thousand. And maybe it would be profitable for some podcasters—usually those who get thousands and thousands of downloads per episode.
And yet consider the math of it all.
With a $25 CPM sponsorship deal (that's still about the average for a host-endorsed ad spot), you'll get paid $25 for every 1,000 qualified downloads your sponsored episode delivers, usually limited to the first 30 days. “Qualified downloads” would filter out bots and many repeat downloads, but it might also have to exclude downloads outside of the target market. For example, counting only downloads from the United States and Canada, but nothing from anywhere else.
Assuming your 1,000 downloads per episode all qualify for the sponsorship, a $25 CPM makes each listener worth only 2.5¢!
This gets even worse with dynamically inserted programmatic ads that might pay only $10 CPM (or less), making each listener worth only 1¢!
Compare that to accepting micropayments from your audience. If you could get only 5% of the same 1,000 listeners to give only 50¢ per episode, you would make the same $25 per episode—but in a far more fun, engaging, and community-focused way! This is why the Podcasting 2.0 micropayment system is commonly included in the bigger idea of “value4value” (modeled by the Podfather himself, Adam Curry, and his cohost John C. Dvorak on No Agenda): you're giving value to your audience through the content you publish, they give value in return (“time, talent, and treasure,” as Adam Curry says, inspired by Christian Scripture), and even the podcast-app-developers along the way are giving and receiving the value, too!
Also consider that the only way to increase your income from CPM advertising is to either grow your audience or—yuck!—insert more ads!
It reminds me of this hilarious scene from Ready Player One:
But there are countless other ways to increase your income from your existing audience: providing more value through your content, engaging your audience better, offering shout-outs or special titles for particular support levels, or even simply asking for more (you could ask for merely 100 more sats)!
An old study found that asking to cut in line for a copier and giving a reason (any reason, even if it didn't make sense!) resulted in people allowing the researcher to cut 93% of the time! Compare that to only 60% when he merely asked to cut in line without giving a reason.
This Podcasting 2.0 approach to micropayments and support from your audience might not only be more financially profitable, but it's also more engaging, makes your audience feel more involved, builds deeper loyalty, and is more fun—priceless!
So don't think of it like, “My listener gave me only 25¢!” Instead, recognize that your listener quantified their value far beyond what they're worth to a sponsor, and they willingly—probably even eagerly—gave that value back to you!
I think that's worth it!
You might remember that I accepted some sponsors for The Audacity to Podcast in the far past. And I'm not entirely opposed to accepting sponsors again because I do need my business to provide for my son and me—but I would only accept sponsors if I believed they were totally relevant and valuable to you.
Even then, I still often think that I actually can't afford to have sponsors because of what that costs me in growing my business through the products and services I personally made and sell, and what it would cost you and me both in our relationship.
Instead, The Audacity to Podcast accepts streaming sats and boostagrams. I've actually had that enabled for a while and have earned over 100,000 sats—all without my asking for it, promoting, and I've only once said I even had it set up! In the past, I've given shoutouts for podcast reviews, which have their own value. But starting now, I want to try a season of giving shoutouts to your podcast for any boostagrams of around 10,000 or more satoshis. (And I have to reserve the right alter this or to not promote things or share messages as I see fit.)
You might be tempted to skip listening to such segments in upcoming episodes. but even if you give nothing at all, I still encourage you to observe and deconstruct so that you can improve your engagement with your audience—whether that's innovating on something I do or trying the total opposite!
I'm thrilled to be cohosting The Future of Podcasting with Dave Jackson, from School of Podcasting. In our shared show, we discuss emerging podcasting trends and technologies. And in our very next episode, I'll be asking Dave about his experience and mindset behind why he has given micropayments to other podcasts.
And beyond that, we're having a lot of fun endeavoring to make Podcasting 2.0 and other modern podcasting trends and technologies more understandable and actionable so you can improve your podcast and leverage new opportunities.
If you need one-on-one help or you haven't launched your podcast, yet, click here to request a personal coaching and consulting session with me and I'd love the opportunity to help you podcast better!
This post may contain links to products or services with which I have an affiliate relationship. I may receive compensation from your actions through such links. However, I don't let that corrupt my perspective and I don't recommend only affiliates.