The Business of Podcasting – Nerdtacular 2013 Panel

Quality Note: Because this session was a “spur of the moment” thing, we were lucky to get any sort of audio recording at all. It was recorded on an iPhone so please forgive the quality.

While attending Nerdtacular 2013, I had several folks pull me aside to ask me questions about the business side of podcasting. I have been making a living from podcasting since 2006 and my wife Nicole just recently starting working for our business as well, so while I don’t consider myself some sort of guru, I am always willing to share my personal experiences in hopes that it might help someone else.

After several requests, I suggested to Nicole that we should probably set up a panel next year. Her reply? “Let’s set up a panel today!” So we got together a couple of our closest and most successful friends (who also happen to make money online) and held an impromptu discussion/Q&A.

The Panel:
Marc Spagnuolo and Nicole Spagnuolo from The Wood Whisperer. (@woodwhisperer, @nicolespag)
Stephen Schleicher from MajorSpoilers. (@majorspoilers)
Mark Turpin (Turpster) from The Yogscast. (@The_T)

Our discussion covers a great deal of ground from sponsorships, to business entities, to advertising, to respecting your audience. Again, none of us claim to be experts in the area of podcasting for profit. We simply love the stuff we talk about and somehow figured out a way to make money from it. We hope you find this useful.

Taste My Muffins – Advice for Consumers and Producers

Imagine for moment that you love to make muffins. You love it so much that you decide to make some for your colleagues at work. Your co-workers respond with such incredible enthusiasm that you decide to make it a routine. Every day, you bring in a dozen muffins and every day they are devoured. Your co-workers clearly appreciate your efforts and seeing the look on their faces as they enjoy your delectable delights is all the encouragement you need to continue bringing the muffins in to work.

After doing this for a few months, you begin to notice an odd trend: some folks are starting to complain. “There’s not enough variety!” “There’s too much variety!” “I can make those better myself!” “You have no business making muffins if you haven’t gone to muffin school!”

One person even goes so far as to send you a lengthy email explaining how your muffins have not been approved by the National Muffin-Makers of America, and therefore your muffin-making skills are in question.

You start to wonder what’s going through your co-workers’ heads and whether or not this is worth the hassle.

Time passes, and in spite of the occasional complaints, your muffins are enjoyed and consumed daily. In fact, things are going so well that you were able to start acquiring paying customers who are willing to give you money for a premium product you now call Uber Muffins. But once again, that success comes at a price. Many folks who continue to enjoy your free muffins begin complaining that you are always so busy making muffins for your customers that you never have time to make free muffins anymore. The irony here is that you actually do continue to bring free muffins to work, but not as frequently as you used to.

So why would you continue making muffins in what seems to be a thoroughly thankless environment??

Because it isn’t thankless at all! For every person who says, “Your muffins are dry!”, there are ten times as many who feel your muffins are moist and delicious, even if they don’t feel compelled to give you the positive feedback you desire. You see, in this world, the vast majority of muffin lovers simply enjoy your muffins and don’t feel compelled to say anything about it. But when someone has something negative to say, they don’t hesitate to blurt it out for the world to hear. That’s just the way people work. But remember, the empty plate in the break room tells the tale.

The somewhat disappointing reality for muffin-makers is that if you give a dozen muffins away for free on a routine basis, a certain percentage of people will start to feel entitled to your muffins. The truth is, they love them. But if you ever change the flavor, vary the number, or possibly even forget to bring them in one day, their natural sense of entitlement kicks in and they won’t hesitate to make you feel like you’ve done something wrong, when in fact you simply neglected to give them their daily dose of free muffin goodness.

So if you’re a muffin-maker and you’re in it for the long haul, you will have to remind yourself routinely of the fact that most muffin-lovers have no reason to contact you. The ones that have something negative to say could very well outnumber the ones that have positive feedback, and that sucks. But don’t let that fool you into thinking that this very small sample is representative of the whole. It’s not! Most people are quite reasonable and they truly appreciate the muffins you are willing to make for them, whenever you have time to make them.

If you’re a muffin-lover, don’t miss an opportunity to let your favorite muffin-maker know how much you appreciate not only the taste of their muffins, but the fact that they are willing to put their heart and soul into delicious tasty treats and share them with you at no cost. Your feedback is what keeps that oven fired up.

In case you haven’t figured it out yet, muffins can be replaced with just about anything someone produces. In my personal situation, it is in reference to the creation of free woodworking content and the path I took to get where I am now. On a daily basis, I deal with feedback from strangers around the world who make the most ridiculous assumptions and accusations based on the perceived frequency and quality of my free content. Frankly, YouTube is the source of most of this negativity but what can you expect from “the internet’s lower intestine.” Of course, there are thousands of kind and thoughtful people on YouTube and I always appreciate hearing from them, so let’s not throw the baby out with the bathwater. I don’t even know how he’d fit down the drain, but I digress.

A Baby, A Time Crisis, and $1 Million

A Time Crisis

How’s that for a catchy title? As you can see, my fresh new personal blog hasn’t been all that active lately. As soon as Mateo came home, all my spare time went out the door along with all of my work time as well. The truth is, fatherhood is the responsibility I didn’t know I needed. Over the last year or so, I’ve been going through a bit of a mid-career crisis. This wonderful beast called The Wood Whisperer consumes all of my available time like a greedy sponge. Anyone who has run their own business probably understands this very well. If you are motivated and there are no formal restrictions on your time investment, you essentially wind up using all of it. As a result, I fell into a “time crisis” where I felt like I was constantly spinning my wheels and getting nowhere. Reading books like The 4-Hour Work Week and other time management/lifestyle resources did help. They taught me that I need to spend more time on the things that generate revenue and stop worrying so much about what my friends are doing on Twitter. It also taught me that the pile of email in my inbox CAN wait. Who knew?? I don’t know about you, but having email in my inbox drives me nuts. It’s like being in a boat with a unrelenting leak. Every time I scoop some water out, a bunch more gushes back in. So one of my biggest lessons of the past year was learning to tackle email once or twice a day, instead of all day long. I also learned that there is a huge difference between simply checking your email and actually answering your email. One of the worst things I can do is check my email just to peruse it. Once an email has been checked, it takes up space in my brain. If I don’t answer that email, that space remains occupied. So twenty read/unanswered emails in my inbox equates to 20 things to do in my brain. What a waste of brain real-estate. So if I don’t have the time to answer, I don’t bother checking. And I only check/answer one email at a time. If I haven’t read it, my brain doesn’t know about it. This is easier said than done, but I do my best and things are improving.

A Baby

So this is where the Baby comes in. Mateo is, without a doubt, the most demanding thing in my life. Everything else abruptly dropped down a notch on October 28th, 2011. Whether I like it or not, I simply don’t have time for all the extra-curricular work-related activities. I can’t afford to edit video and let myself be distracted by an open internet browser on my second screen. Now is a time for uni-tasking, not multi-tasking. I need to focus on the core functionalities of my business and make sure they continue to thrive, while letting go of the things that just contribute to the white noise. But for all the sleepless nights and scheduling frustrations, everything with work just seems easier when work is no longer the most important thing in my day.

$1 Million

Far from it. While I get some mental relief from this revelation about my priorities, there are still some significant challenges in The Wood Whisperer camp. If you don’t know what I do, I run a free website at TheWoodWhisperer.com and a paid membership site at WoodWhispererGuild.com. A big part of my struggle is trying to balance the two sites. But I really shouldn’t paint the picture that the flowers are blooming and the sky is blue.On one end, I have the people who actually paid me money to provide them with video instruction, and on the other I have sponsors and advertisers who are paying for eyeballs. I never expected both sites to thrive concurrently so I have been burning the candle at both ends for a few years now. There is so much more I can do on both the free and paid side of things, but I just can’t afford the time investment as one would come at the expense of the other. Walking this tight rope was fine when it was just Nicole and I and working till 11pm on a Friday night was considered “normal” behavior. But now, it just seems ridiculous. So when a company recently offered to buy us out, my ears perked up.

Now don’t get me wrong, I am not looking to sell my business. But I had a strong curiosity about what they thought my site was worth and what life might be like without The Wood Whisperer. While the idea of separating Marc Spagnuolo from The Wood Whisperer seems crazy, my entrepreneurial spirit just couldn’t ignore the possibilities. I mean, imagine selling off everything I have created so far and considering that the “practice run” for the next big thing; taking the big payout and investing that into my next venture. The question is, how much money would make it worthwhile/possible/feasible/smart? After all, with a little one in the house, this isn’t exactly the best time to take a gamble with my livelihood. So let me cut to the chase and say the offer ended up around $1 Million. That may sound like a lot but after taxes, the actual payout would be substantially lower. It didn’t take long for me to decide this wasn’t the right move for us, for many reasons. But I went through a bit of a mental exercise that not only solidified my decision not to sell, but also made it painfully clear what I need to do with my business moving forward. Since I had to consider what I would do AFTER The Wood Whisperer, I had to ask myself, “What would be my ideal business model?”. I’m sure there would have been some sort of non-compete clause in the contract, so what would I do to get myself back into the market?

The answer was very clear to me: I would start a new online woodworking school. A paid membership site where people could learn woodworking. I would use a good part of the acquisition money to jump start the business with a new website and a strong marketing campaign. The marketing campaign would obviously be essential since I no longer would have the power of TheWoodWhisperer.com to disseminate information. This is when the realization hit me like a ton of bricks. I already have an online woodworking school! Furthermore, I have a built-in advertising machine at TheWoodWhisperer.com! The Guild does very well with absolutely NO paid advertising. So if I sold my company, I would be selling the machine and the tools that I would need later to create my ideal business, and that is not very smart. This realization may be somewhat obvious but it was ground-breaking to me at the moment because it made me realize how powerful my free site was, even without the addition of new content. And if I am being honest with myself, THAT is the source of my stress. The free site is a hungry voracious monster that will simply gobble up all the content I can throw at it. Over the years, I have pumped about 200 videos, 272 articles, 301 Viewer Projects, 76 Shop Tours, and 102 audio podcasts (with the help of my co-hosts) into it. Yet despite this fairly large library, I always feel indebted to the free site. I made the mistake of thinking my site needs to compete with magazine websites by trying to be everything to everyone. But I am only one person. And the truth is, if I abandoned my site today, it would be a long time before I saw a decline in traffic and/or ad revenue. Sure it would start to drop off at some point, but the library of content could potentially serve as a resource for decades. So perhaps, it is time to stop burning the candle at both ends and start burning twice as bright from one. For those of you who are fans of TheWoodWhisperer.com, fret not. Let me clarify.

The thing that got me where I am today is making good quality woodworking videos with a sense of humor. I want to stay true to that. So I will no longer simply PUSH out a video out of a sense of obligation. Instead, I will put out videos when I am inspired to do so. I will simply have to ignore all the comments from “the entitled” that criticize me for not putting out enough free content and focusing too much on the Guild. The days of cranking out 40 videos a year are over. Instead, I will try to make a smaller number of videos that reach the highest bar of my personal quality scale.

I took a very circuitous route to arrive at the realization that the Guild comes first. After all, these are folks who are paying me directly for a service. Putting anything before that would be disrespectful, not to mention irresponsible. The free site will continue to showcase community work and will serve as my personal woodworking blog as it always has. Free videos will roll out as often as I can get to them……and no sooner. 🙂 I have to say, it feels liberating just to type those words!

As it turns out, having a baby and turning down $1 Million were the best things to happen to my business and my state of mind!

How Not to Make Money on the Internet

As someone who has been running an online business for the last 5 years, I have gained some perspective on what its like to make money on the web. Since it is my livelihood, it’s something I think about constantly. But you might be surprised to know I am rarely thinking about ways to make MORE money. Instead, I find myself wading through the available options and opportunities, trying to decide which methods are acceptable for me, my business, and my audience. The end result is typically significant amounts of money being left on the table. Most times, I simply ask myself, “Would I want to be advertised to in that way?” If I’m not sure, a quick conversation with Nicole usually closes the deal.

Once you have a website with a decent and consistent flow of traffic, opportunities abound! While capitalizing on all those opportunities may line your pockets in the short term, it will no doubt jeopardize your relationship with your audience in the long term. So you really do have to be careful about your choices in monetization options. Now I’m no expert in this area, but I do know what works for me.

I believe a content-producer has the right to monetize till they’re blue in the face and I would never begrudge someone for doing so. But when it comes to my audience, I have a certain level of respect and friendship (if you can imagine such a thing happening with thousands of strangers), that I don’t want to jeopardize. So ultimately, I’d rather lose money and gain respect. After all, if I am smart about my monetization methods, that long-term respect can lead to even greater earnings potential in the future.

It is becoming a habit of mine on this personal blog to let loose some fairly personal details, so let’s keep that theme going by reviewing a few of the monetization opportunities I routinely turn down and why. Again, this in no way meant to be advice or a “how-to”. Most of the time I’m just “winging’ it” anyway! These are just personal opinions, gut feelings, and general principles that I feel make The Wood Whisperer the company that many folks know and love.

First off, here are my three rules concerning advertising:

1. Respect the content!
2. Never mix content and advertising in a deceptive way.
3. Always keep the reader’s/viewer’s experience in mind.

With those in mind, here are the dirty rascals…

Text Link Ads

This monetization method involves partnering with a 3rd party company that combs your site for keywords. If they find a keyword that matches up to an ad they have in the database, the word is hyperlinked. Every time the link is clicked the site owner gets a small amount of revenue. This breaks rule #1 and #2 in a very deceptive way. When I click on a link in an article, I expect this is an item the author is linking to as an extra resource or even a product they specifically recommend. But that is not the case. These links populate based on whatever keywords are in the database and the author has little to no control over them. Fortunately, text link ads are pretty easy to spot as they are typically double-underlined.

I like to think of my articles as mini conversations with my readers. Imagine talking to someone and saying, “So I went into my shop (CHECK OUT SHOP.COM!!) yesterday and used my iPhone (BUY iPHONES HERE FOR CHEAP!) to take pictures of a beautiful maple board (MAPLE FLOORING AT DEEP DISCOUNT PRICES)”. Not only is that annoying and irrelevant, it’s counter-productive to my ultimate goal: keeping people engaged and on my site for as long as possible. It just isn’t worth the $0.15/click to send you away from my site in the middle of our conversation.

Breaking Articles into Multiple Pages

About.com, I’m talking to you! This drives me nuts as a reader. I have a scroll bar on my mouse and I enjoy using it. There is really no need for a small article to be broken up into 4 pages. The only logic I can see behind this is the fact that it boosts page views. If every article takes up 2-3 pages, that’s 2-3 times more page views than if the article appeared on one single page. So its a great way to inflate your numbers to please advertisers. Unfortunately, the reader is on the losing end, having to click through multiple pages to read a very short article.

Facebook Mentions

This is a fairly new one for me. I was recently offered $50 to do nothing more than say, “Check out Website XYZ” on my Facebook page. Much like my Twitter account, every post is coming directly from me. If I post a link, I see it as a genuine recommendation about something I think my audience will enjoy. My reputation is attached to that recommendation. Dropping a meaningless ad in there just feels…..icky. My status updates on social media sites are essentially my words. And at this stage of the game, I just don’t feel the need to monetize my words in that way.

YouTube Description Ads

This is also a fairly new development. I have to routinely turn down offers to insert links into my video descriptions on YouTube. Frankly, these just piss me off so I usually don’t even grace them with a response. YouTube’s linking rules are so stringent that I’m lucky to have my own link in there, let alone someone else’s!

Excerpts in RSS Feeds

When you run a blog, you usually have a choice as to how your RSS feeds appear in readers. You can set it to “Full Article” or “Excerpts”. In my opinion, excerpts are completely counter-productive for the reader and possibly even for the author. They are nothing more than teaser content used to hopefully drive the reader to the source website in the hopes of increasing traffic. But for people who read hundreds of blogs in a reader, its a good way to find yourself booted off their reading list. The way I see it, I want as many eyeballs to see my content as possible. Half of the battle when you produce content online is awareness. Why limit your potential by gimping the technology? This is one of those trade-offs again, right? Is the minor increase in traffic worth the cost of convenience to my readers? For me, the answer is no.

Pre-Roll Video Ads

Now this is the one that will most likely boggle your mind. I know it certainly boggles mine. A few years ago, Blip.tv (my video host) started implementing a robust ad program. You can turn on pre-roll, mid-roll, and post-roll ads by simply checking a little box. In order to entice you into opting in, they display a little message at the top of your dashboard telling you how much money you COULD be making based on the past performance of your videos. As you can see, I have $1900/month just sitting there, looking all sexy sporting that “come hither” look. Truth is, I have toyed with these ads in the past. And while I will defend my right to turn those ads on, I just can’t get myself to do it. Every time I press play on one of my videos and see an ad for Trojan Condoms, or Febreeze, or Best Buy, a little woodworking gnome dies. It just doesn’t feel right to me. As much video as I consume online, I am completely jaded to pre-roll ads and I think most folks are in the same boat. But as long as we have sponsors on our site, I just can’t justify extending the distance between my viewers and my videos by 30 seconds.  Believe me, it’s incredibly difficult looking at what essentially amounts to my mortgage payment sitting there just waiting for me every month. But I honestly feel that providing a more enjoyable experience on my site leads to more positive juju and more time spent exploring what my site has to offer. Monetization will have to come in other ways.

The Guild

The Wood Whisperer Guild has become, hands down, the largest source of revenue for my business. For those who aren’t familiar, this is the paid membership portion of my website. Having a membership site coupled with a popular free website means I have near constant opportunities to slip in a plug for the Guild. But most times, I just don’t. I will occasionally mention an upcoming build or send out a video featuring a segment from a Guild video. But I make sure the segments are always complete thoughts. No cliff hangers, no teasers, no up-sells. In fact, if you go to the home page now and you don’t know what the Guild is, you’d have a hard time knowing the option even exists! FYI, this will change to some extent with a future iteration of the website. I do plan to make the Guild’s presence a little more obvious.

But despite this lack of a hard sell, the Guild is thriving! Why? I have to believe it is because of some of the things mentioned above. Of course we have great woodworking content and I put a lot of blood, sweat, and tears into my videos, but I like to think we helped foster a culture of woodworkers that folks just want to be a part of. An honest to goodness grassroots effort where all are welcome to participate and attitudes are checked at the door. Dropping $199 on an online membership takes a lot of trust on the part of the user. And this is where I feel I am getting the most payoff from all of my previous “lofty” views and policies toward advertising and dealing with people. I have established a trusting relationship with my readers and as a result people know what to expect from me. They either think the membership is worth it, or they don’t. There is very little suspicion or debate about whether I will deliver on my promises; only questions about whether what I promise is worth the asking price. When someone does approach me with a sense of doubt about the program, I simply tell them to wait. Enjoy the free site for a few months and make a decision at that time. In the end, they usually wind up joining after a few days. So when asked why I don’t push the Guild more aggressively, the simple answer is (thankfully) because I don’t yet need to.

Sometimes these posts just become a stream of consciousness and I don’t really even know what I expect to accomplish with them. I suppose mostly its a form of therapy for me. I enjoy sitting in my recliner letting the words flow out. The fact that people actually read them is pretty freakin’ awesome. So hopefully this provides something useful to someone. And if not, at least it gives you a little more insight into what makes The Wood Whisperer tick. Perhaps in the future, I’ll talk a little bit about the monetization methods I find fruitful and why.