I recently read a post at Open Culture
that noted how the #3 most popular podcast at iTunes earlier this month was Coffee Break Spanish,
which has experienced over a half million
downloads since starting up late last year. The money quote in the post, for me, was this:
...the digital era has enabled small content providers, with little to no capital, to serve niche markets, which if taken together, can turn out to be quite large.
This is something that seems quite obvious, if you think about it for more than a second, but at the same time something... if not profound, then at least in the class of having that animated arm pop out of the screen to thwap you on the head with a wooden mallet.
The business model here involves providing a basic product that you give away and that can stand by itself well enough to earn repeat downloads, and then to offer a raft of auxiliary aids, such as bonus podcasts, documentation, flash cards, etc., which are sold to listeners (about $18 per month, in the case of Coffee Break Spanish
). Although the cost of goods is negligible (in terms of having no physical product to sell), I would not be surprised to learn that a considerable amount of effort must be invested to actually generate the content.
So, I thinks to myself, how might those 500,000 downloads translate into sales?
That will depend on the size of your audience, i.e., repeat listeners. How many such people are represented by 500,000 downloads?
We are going to have to make some assumptions.
Just for laughs, let's invoke the 80-20 rule and assume that 20% of listeners are motivated enough to think "I can do this," and download an average of 8 episodes of the 10 available, and that 80% of listeners quit downloading after an average of 2 episodes and go back to watching American Idol.
If you do the math, the assumption results in an overall audience size of just over 150,000 people, of whom 30,000 are motivated enough to have downloaded almost all the episodes, and zero of the remaining 120,000 souls can be expected to buy any premium content.
Now, somewhere, I have a dead-tree article wherein it is stated that almost 95% of people will not carry through on a decision that might literally save or prolong their lives (something like quitting smoking, for instance, for someone with emphysema). Let's state that a bit more starkly as: "95% of people who are motivated to do something supremely
important to them will not do it."
But buying extra content is not a life-or-death decision, so, of the remaining 5% of that 30,000, I estimate that 1 in 5, and maybe - if winds be fair and the seas following- as many as 1 in 2 of that group will muster the initiative to move beyond of their comfort zone and actually take action. (If you've ever been on the receiving end of sales training, you know how important that "call to action" is. If you don't ask for the sale, you won't get it!)
So figure something between 300 and 750 people buy into the paid goodies... that's, um, between $5400 and $13500 per month, with the latter figure being fairly optimistic.
Draw your own conclusions (but remember: generating content will be a full-time job!)
(BTW, if anyone feels like pointing out an episode of rectocranial inversion on my part, please feel free to comment.)