TANSTAAFL, Robert A. Heinlein reminded us over half a century ago. That means “There ain’t no such thing as a free lunch.”
That same thing holds true in podcasting, but we have been fortunate enough to get a nearly-free lunch in the form of podcast media hosting. $20 monthly fees. $5 fees. Heck, there are even a few remaining free podcast hosting companies (though they tend to go out of business, oddly enough). Were it not for these low-cost services, we wouldn't have a rich and vibrant podcasting environment like we enjoy today.
The promise most of these low-cost providers make with you is for “unmetered” bandwidth. It doesn't matter how big your show gets, they say. They’ve got the bandwidth taken care of, and your bill won’t increase.
Well... what if I told you that wasn't always true?
Now, I have to be very careful about how I approach this topic. The people that run these low- cost podcast hosting companies provide an incredibly valuable service. Many of them are great friends of mine, even though were not infrequently at loggerheads on some topics. Regardless, I really do like the people that run these companies, and the last thing I want to do is set off a mass Exodus away from any of these platforms.
Look, I use these low-cost platforms to host this show. I use low-cost podcast hosting platforms to host the shows my company produces. So what I'm about to say should not cause the vast majority of podcasters to take drastic action. For the overwhelming majority of podcasts, you’ll always keep paying whatever you're paying right now for podcast hosting.
But… if growing your podcast into a commercially viable enterprise (kind of the theme of the week) is your goal and you are successful at creating a commercially viable podcast, you will run up against these limits. If your show reaches commercially viable download numbers, it’s just a question of when you get that phone call or email from your podcast hosting company as they seek to find a way to recoup their investment in your program.
Again; it's worth restating that the vast majority of podcasts will not encounter this. If you're getting hundreds or even thousands of listeners of your episodes each month, this does not apply to you. It's when you start hitting the numbers of commercial viability I spoke of yesterday -- tens of thousands or hundreds of thousands -- when the unescapable bandwidth costs your podcast hosting company pays for force them to make a business decision.
Look at the contract you probably didn’t read that spells out the terms of service with your hosting company. Chances are, you’ll find a clause that states something along the lines of, “If your show gets too big, we're going to reach out to you and find ways to help us recoup our real costs.”
There are two ways they can recoup that cost. What many prefer to do is help you monetize the show with ads so they can take a portion of the advertising revenue brought to your show. They'll either offer up dynamic ad insertions or bring you opportunities to do baked-in live host reads, where they keep a piece of the action.
If you’re not OK with running ads in your show (or at least the ads they bring to you), then the second way they recoup their cost is for you to pay them for the bandwidth that your show is using each month. Probably a flat fee, then a surcharge based on the real storage/bandwidth used to host and/or deliver your content to your giant audience.
Welcome to success! Commercial viability applies to you and your chosen service provider.
I spoke to a few big podcasters this week and they've all told me the same story: Their show got big and they got the phone call from their low-cost hosting provider. In some cases, the podcasters were happy to stay with that host under the new terms of the relationship. In others, the podcaster decided to move their show to a different hosting company, usually to a more managed service that provides better options for ad dollars, often supported by platforms that are easier for ad reps to access, or that come with better opportunities to monetize the entire catalog of episodes with less manual work.
The reality of outgrowing your low-cost hosting provider is universal. It’s just ot likely. Realistically, every low-cost podcast hosting company will face this reality if one of their hosted shows gets really popular. I’ve heard the tale directly from someone I know. He ran podcast hosting companies because bandwidth was super cheap and getting cheaper all the time. But one show on his platform was successful at finding their big audience, and he was stuck with bandwidth bills of several thousand dollars each month. Worse, his company wasn’t prepared to cover those bills with alternate revenue sources. So he shut the company down.
Most of the low-cost podcast hosting companies take a communal approach to their pricing model, where less-popular shows subsidize the more popular ones. They charge a whole bunch of people a small amount of money, let's say $25 a month. Most of those shows have tiny audiences, so they may only cost the hosting provider $1 (or less) each month in bandwidth. That leaves the company with $24 of unallocated revenue to spread around and cover the shows that are costing them hundreds of dollars in bandwidth. In aggregate, it all works out and everyone wins.
It's when those costs start hitting thousands per month for a show when the hosting companies have to make a big decision about what to do with the outlier shows that no longer fit the model I just described.
If you really do have designs on growing your show (and a plan to do so) to the point where it's commercially viable, then you need to prepare for this eventuality. Because it will come up. You need to be eyes wide open that someone will have to pay the bandwidth cost eventually.
Do you have a friend in podcasting who needs to know about this? Do me a favor and send them this particular episode. Word of mouth works really well to grow a podcast. There are almost 900,000 podcasts available, but I’m nowhere near having 900,000 people listening to my program, so I’m not facing the reality I just laid out. So don’t worry: You can send me as many listeners as you like!
And if you have questions for me on this topic or anything related to making podcasting better, reach out to me at email@example.com.
Enjoy the rest of your Thursday and your Friday tomorrow, as I don’t produce this show on Friday. Instead, I'll be back on Monday with yet another Podcast Pontifications.