Podcasting is finally attracting real money

Landing an interview with President Obama earlier this summer has yielded big benefits for Marc Maron's "WTF" podcast.

Since that episode ran in June, "WTF," already one of the most popular podcasts on the Internet, has attracted an additional 200,000 to 300,000 downloads per episode, according to Brendan McDonald, who produces the show and co-created it with Maron. It's the latest sign of the growing acceptance of the medium, which Apple (AAPL) first added to iTunes in June 2005.

"I don't believe podcasting will replace traditional radio, but I believe it will serve as another option for people who are becoming increasingly used to a wide variety of media choices," McDonald said in an email to CBS MoneyWatch. "It's not replacing radio just as Netflix isn't replacing broadcast TV, but it will offer a similar counterbalance."

For Maron and other popular podcasters such as Adam Carolla and Jesse Thorn, podcasting has proven to be lucrative and a way to further other endeavors such as live performances. McDonald said he and Maron could earn a living solely from the show if they chose to do so. MaximumFun.org, Thorn's for-profit podcast network, which he says is profitable, got its start after he sold a 1963 Dodge Dart to buy a sound mixer and two microphones.

Carolla, a stand-up comic who gained notoriety for his work on radio and TV, invested $175,000 to build a studio in the same warehouse where he houses his car collection. His business, Carolla Digital, ran a deficit for about 18 months but now is profitable, thanks to his hit podcast "The Adam Carolla Show." In an email to CBS MoneyWatch, Carolla estimated he'll generate $5 million in revenue.

Not surprisingly, he's bullish about the medium's prospects.

"Audio is a superior medium to terrestrial radio in that it is free to the listener, has no FCC content restrictions, no annoying 10-minute ad blocks and is available on demand wherever and whenever on each and every digital device you may have," Carolla wrote. "This form of broadband content featuring artists programming themselves for the enjoyment of their audience is only going to continue to grow in my opinion as more and more prominent artists come into the medium."

Advertising spending on podcasts is expected to reach $34 million in 2015, an increase of about 10 percent from 2010, according to Zenith Optimedia, which tracks ad spending. But some in the podcast industry say that estimate is too low.

Among those is Norm Patitz, founder of Westwood One who's now chairman of podcast network PodcastOne. He told CBS MoneyWatch that he estimates the market size at about $50 million as more brand advertisers embrace the medium.

"If it were $34 million, we'd be way over 50 percent of the business, and I don't believe that we are," said Patitz, who sells ads on Carolla's show and others.

National Public Radio may be among the biggest beneficiaries of the trend, thanks to the popularity of "Serial," which raised questions about the 2000 murder conviction of Adnan Syed that was a produced by Chicago's public radio station WBEZ and "This American Life." The show was downloaded 5 million times in its first nine weeks, the fastest that's ever happened. Season two is expected to debut in the fall, and a third season is in the works. Other NPR programs such as "Fresh Air" and "Wait, Wait...Don't Tell Me" are also popular with podcast listeners.

NPR currently get about $4.7 million in revenue from podcasting, or about 11 percent of its corporate sponsorship revenue, which was $43 million in its 2014 fiscal year. That figure has grown 300 percent since 2013. NPR averages 74.4 million podcast downloads each month, according to data the network provided.

PodcastOne estimates that "The Adam Carolla Show" attracts between 700,000 and 800,000 listens per episode, and occasionally gets as many as 1 million. A "listen" isn't necessarily the same thing as a "listener" because more than one person could listen to a downloaded episode.

Getting a precise measurement of its podcast listenership is tricky. For one thing, there isn't a recognized ratings standard like Arbitron is for terrestrial radio or Nielsen is for TV, and many people download podcasts to listen to later, but not all downloads are heard. PodcastOne uses a variety of sources to estimate the size of Carolla's audience and those of its other programs.

The podcasting industry doesn't rely on the charts in iTunes. "It's very unreliable if you're trying to figure out what the most popular podcasts are," said Thorn, the producer and host of "Bullseye," a radio show/podcast distributed by NPR.

Where might podcasters go from here? Carolla said he has gotten buyout offers for his business and was considering his next steps.

"Inquiries have been made, the space is definitely heating up," he wrote. "[I am] interested in something that would allow me to take on more production and labor capacity while building my audience base, Hello Jeff Bezos???"

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.