Earlier this year, I was talking to an entrepreneur who has been listening to the 21 Hats Podcast since before the pandemic. She told me that she had built the weekly conversations into her routine and that they had helped her make it through the crisis. And then, she offered some advice. Recognizing that I would have to start charging listeners and subscribers at some point, she encouraged me to set a price based on the value those listeners and subscribers receive. “For me,” she said, “the 21 Hats Podcast is comparable in value to my weekly session with my therapist. And I pay hundreds of dollars for that.”
Okay, so hundreds of dollars a week for a podcast seems a tad high, but I do need to generate revenue. While I’ve brought on a few sponsors, I don’t want to be dependent on them. I don’t want to chase traffic for advertisers; I want to provide value to a segment of business owners who tend to be overlooked by the mainstream business media and who I think will be happy to pay a reasonable fee. (And if that happens, I am confident I will also attract but not be dependent upon sponsors.)
So what’s a reasonable fee? How much do you value the 21 Hats Morning Report and the 21 Hats Podcast? What would you pay to give me the opportunity to keep building this community?
Hey Loren, love your writing approach here. I’m not the sort to normally chip in on things like this, but somehow your style pulls me in! :-). Subscription pricing is tricky, and a lot of people get a lot of free stuff nowadays, making it tougher to charge. I wonder if the sponsorship model could be the right way to go (ok ok, I’m looking at participating with that, so I know I already have some bias). But if subscriptions are your preference here’s some ideas: 1) start with a honor basis subscription. Ie. We’ like you to pay x/month, or x/year, but its honor basis if you like 21 hats. Have no idea if this would work, but you get to test, without shutting out the readership that arent ready to pay for subscription yet. 2) offer a premium subscription, as well as the free one. Maybe the premium gets the community benefit of the weekly Clubhouse meet up, and the once a year New York in person party. Ok two quick off the cuff ideas there. I’m sure someone will be able to add to them or top them! Best of luck with this, I’m a fan of your work as you know! Thanks. Mike Faith
My mother always said, "Don't ask a question unless you're ready for the answer." So here goes:
Comparable subscription podcasts (e.g. Wondery+) are monetized at roughly $5.00/month and $35.00/year. Wondery is more or less entertainment and they span a wide variety of topics. However, I view 21 Hats as more utilitarian and I find myself re-listening to episodes much more frequently than, say "Business Wars" on Wondery.
I would place my perceived value of 21 Hats at about $125-150 per year, where $151 would be my walk-away price. Likewise, if 21 Hats started incorporating advertising, I would unsubscribed to a paid version and go with the free, ad-supported version. (Note - I do not like monthly recurring fees and actively avoid them. Note also that I believe an ad-supported version of 21 Hats would kill the mood and flow of the conversational aspect of the podcast.)
I recognize that most monetized podcasts have the "sell cheaply to many" business model. This may work well or may fall flat with 21 Hats. I simply do not know; it's too far outside my area of expertise.
So, flipping this around to you, Loren: What does success look like for this endeavor?
Loren I believe its not the cost its the friction in the transaction that will cause you to lose listeners. I like the podcast because it just shows up in my app.. I do not believe I would put the effort in to pay for a subscription for this type of content or any podcast. Its interesting but lots of content out there. Many podcast have a diminishing return for learning over time. Over time its the same content told in different ways. You need to have a constant flow of new people and this will block this . I personally would not pay I would just move on to another form of entertainment. Music or another podcast. I do love what you do and want you to be successful .
Hi Loren, I can‘t not weigh in on this because I love the 21 Hats platform and am hugely respectful of the risk you have taken to do what you have done and do best - support and celebrate entrepreneurs in their trials, triumphs and tribulations. You have already received some good advice here, but I believe you are framing the question in the wrong way. Effectively what you are asking your audience is to tell you what they would be prepared to pay for something they are currently getting for free. You have a range of answers from several $100 a pop as a therapist (although the price would be less as it is a group not individual session) to $125-150 a year for a subscription model.
My friend Grant Williams (www.grantwilliams.com) who hosts a series of amazing financial market podcasts has a short summary podcast for free and the whole thing behind a paywall with silver, gold and platinum memberships.
He also has a paid only monthly newsletter which is very high value and I think I pay around $375 per annum for the package.
21Hats feels like a Community and you have a base line of raving fans who love what you do, consume all your content and have integrated the conversations and feed into their routines. They probably get most of their info on PPP loans from you and your contributors and lots of industry insights and meta-level inspiration (leadership, hiring, growth, dealing with drama etc) from 21 Hats as well.
Rather than asking everyone point blank, I would invite small groups of true fans to a short hosted discussion using a qualified market researcher (of whom their will be a few in your audience) to prepare a proper structure for the process. Maybe you could ask Dana or Stephanie or Jay on to hel host the sessions as a bonus.
I would use those sessions (and you don‘t need more than three) to dig deeply into the value that 21Hats brings and to unearth the ideal structure of the business model and offering.
This is way too important for the future prosperity and success of 21Hats and your work to try and solve what is a decidedly tricky question with such a simplistic approach. I am all for simple, but you will miss too many alternative options with the question you asked (and the range of answers will be too wide for you to be able to do much with). Happy to hop on a call as always. Best wishes Steven
Hi Loren, I love what you do and would certainly pay at least $25/month ($300 per year.) But, what I would pay and what you should do are two totally different things. I know next to nothing about subscriptions and how they work. You seem to be getting some good (albeit all over the lot) advice from people with more expertise than I. Happy to chat about this further with you. Best, John
I don't listen to the podcast. While I do pay to listen to another podcast in a completely different genre, I already struggle to keep up with the amount of content I get on that one sub and probably wouldn't be in the market for another.
For the newsletter - I would be willing to pay for a high quality aggregation service, but the issue is that half of the actual articles are between different paywalls. I think that would really cut the felt value of the service if it was itself locked behind a paywall. If you figured out a way around that issue, that might be a different story, but that's probably not a realistic approach. It just feels like a difficult product to monetize outside of ads. And the community element doesn't really matter to me currently - I haven't had any interactions with anyone besides you.
So this is where math comes into play. Because there are clearly some people that feel more strongly than I do about the value prop of the existing product - but how many are there and how many of them would you need in order to meet your financial needs and goals? Without an idea of what the requirements and desires are, everything will get weighed down in speculation.
It seems like a subscription podcast in the $5-$10/mo range with an annual sub option would be the baseline, and there should probably be some info out there about what a ratio of current listeners to future subscribers might look like (or you can hit up some industry connections.) If that calculus doesn't get you to a reasonable starting point financially, then you might have to rethink the business model.
Hi Loren, I love the podcast and listen every Tuesday morning. It has been a great tool for myself and how I have shifted my business through the past 2 years.
I would happily pay $9.99/month for podcast but have a few ideas to make it worth it for myself and other business owners.
I am a very busy business owner and don’t read the morning report on a regular basis but do go back and take the info all at once when I have time. My idea would be to have a podcast with just yourself or possibly one of the regulars to go over what is said in the morning report so it could be listened to once or twice a week. It could be your business news of the week and important things that come up that you don’t have time to discuss on the podcast.
My theory on 21 hats is you have two products and they attract two very different customers and how they absorb your useful information. I am an audible learner due to my lack of time but enjoy listening when doing busy work or driving around.
I love podcasts and think if you added more to your 21 hats podcast it would give your customers a more willing $9.99 fee for the content.
If you took business owners from this community or any Jay or others know and interview them on their pitfalls and journey through their entrepreneurship we all would get something out of that.
Thanks and keep up the good work.
Loren, you just saved me an email! But instead of talking about the podcast, I’m going to mix things up because I have to talk about the Morning Report first. Last week, I think there were a few mornings missing, and either you were taking a well-deserved break, or my email was blocking them. I turned into a child from whom someone had stolen a lollipop. I double checked my junk, my spam, was hoping that you didn’t stop it, wanted to know that you were OK, and re-checked my inbox the way we do with empty refrigerators! I realized how much I lean on it. It’s the best way that I can be well-informed in a short amount of time. The content is directly linked to what I think about and what I do, which makes it much more than just an interesting read. I was going to email you, and ask you where you were with subscriptions. I’d easily pay 10/month for the Morning Report and probably more. Part of the consumer thought process is that I wouldn’t want to spend time looking for a replacement. I do know that there are other news compilation like Apple news or New York Times, but yours is curated perfectly. For the podcast, It’s important to note that I actually don’t listen to podcasts. I find most of them boring. I want to learn and be entertained. If I just want to learn, I read a book. This podcast helps me get tedious work around the house accomplished, while I’m learning things that tangibly apply to myself or my clients. In my business, part of my value to people includes the ancillary knowledge or resources that I share with them. Thus, the podcast supports my value to clients, which supports my pricing. if we were to include a yearly subscription to the podcast and the morning report, I know that I would have to start thinking about it at 500, because then I would look at it the way I do other business expenses and double check that I’m using it appropriately. I wouldn’t blink at 150-200 and you could probably think out some creative strategies for me to go higher than that.
Loren, ditto on the value that others have posted.
Have you segmented your listener base? Your model resembles a classic freemium product. I think 50-60% hold Andrew E's sentiment. You need to keep it free for them (and everyone else). It keeps the community growing and represents your hook.
So what can you offer for your premium and super-premium base? How about an additional 5-10 minute podcast where you and Dana, Jay, et al go deeper on a specific topic once a week? Or a live show where only premium customers can call in and interact with you and the group?
I think another 30% will pay a little bit ($5-10 / month) and perhaps 10% of your super-fans (I'm in this group) will pay for whatever your highest level offering is ($10-20 / month).
I read your column most every day. I would rather pay an annual subscription fee.
My max is in the $150/yr. Range.
You have a very good product
Hi, Loren! I'll keep it brief. Because you quote a lot of WSJ articles, I subscribe to WSJ for $4/month. I'm probably adding Inc. for $20/year ($1.67/month). We soft-launched www.57Habits.com at $5/month for individuals and packages of $2/person/month. On October 1, 57Habits pricing will become $2/person for two or more people.
My point is this: I suggest it's better to go low price and seek high volume.
I don't have time to listen to your podcast. I'm sure it's high quality, but there hasn't been a topic yet that inspired me to make it a priority.
In regards to the newsletter, you might consider having formal topic areas and then a wildcard. I suggest this because some topics resonate more than others. What's missing? I don't know that I can say, but if I guess... One thing in each of these areas: (1) Political news of a new law or proposed change that is positive; (2) A leader who made a good decision, or contrast of leaders making opposite decisions - then where's the data/facts for us to make our own decision; (3) Something in marketing that is working; (4) A feature of a company's culture that is better engaging employees; (5) A leader's habit that led to an improvement.
You can't do these topics daily, but maybe rotate them and many others. Just an idea.
THANKS for all you do!
Hi Loren, you are clearly a talented person and an exceptional producer of content. I certainly do not understand pricing models for podcasts, content, etc...However, as a consumer, I find that the low cost (approx. $5/month) is an excellent entry point for me when I am subscribing to most anything. Heck, I have not used my Anytime Fitness membership for 10+ months but hesitate to cancel it because I keep thinking that I am going to get back to the gym. So, in the simplest terms, I think that consumers are very likely to subscribe for $5/month. Seems to me that your challenge is to bifurcate your content, services into a general subscription service versus a "higher-value service". So, while all of your content wonderful and valuable, you will invariably have users that dabble in consuming your content. It seems to me that they are the future potential consumers of your higher value content. I see an "upgrade" choice/button in your future if you go with a simple low cost fee approach at first. This will always afford you and opportunity to cast a broad net for future customers. Having a high cost right out of the gate might create a moat of sorts?? So, those are my rambling Saturday afternoon thoughts :-)
Hey Loren, great question. I really enjoy the podcasts and find them very valuable, especially the ones where Dana participates. I also like that you have them transcribed. I can read much faster than I can listen.
I think you'd find little resistance at the $9.99/mo or $99/year level. I'd probably go as high as $200 for the year. If you added in some additional benefits (and I'm not sure what those might be) you could probably push it closer to $250/year.
Hi Loren, as one of your many fans I encourage you to set a date to begin charging. I forwarded a story from the Harvard Business Review to your email that I couldn’t attach in this group comment. How Companies Can Get the Most Out of a Freemium Business Model by Dr. Xian Gu. Summarizing the article encompasses many of the thoughtful ideas your fans have shared. I am willing to pay $10 a month for the daily email. I would love to have an option to give 21 Hats as a gift, of course for a fee. There are many pricing approaches and in the end you will just need to make a decision. That is the the joy of entrepreneurship. Setting up seamless access through Apple or Google Play for subscribers should be your bigger area of focus. There are interesting case studies about loosing loyalty/buyers with every second it takes to collect the registration details. I suggest sign-up with an Apple ID or the like. Viola your in!
OnlyFans. I joke, but there are a lot of ways to support a creator without actually getting any physical/extra value for it. I mean there are gamers who pay $5/mo for basically a PNG next to their name for their favorite virtual youtuber (there is a very interesting rabbit hole here).
Let us stroke our ego by paying you monthly.
Loren, I didn’t thoroughly read through all of the other comments to see if somebody already suggested this, but have you considered doing something like Patreon?
This would enable people to pay whatever price they can afford and also gives you an opportunity to offer incentives for people to pay a higher price. You can set it up where people pay either per episode or per month.
For example, you could set up your different tiers like this:
$1/mo - access to the podcast
$5/mo - podcast + newsletter
$10/mo - podcast + newsletter + 21 Hats logo mug
$25/mo - same as $10 + a shoutout on the show & newsletter
$50/mo - same as $25 + you interview them on an episode
Etc etc, you get the idea.
Judging from the comments, I may not be your typical listener. I'm a small business owner and want to grow it enough to create a reasonable middle class existence for myself and my family. For me, the podcast is about 50-50 critical information v. entertainment. The morning report is much less important to me, though I do skim it most days. I might pay a nominal fee for the podcast, but, frankly, there are a couple of regulars that I'm uninterested in and one I'd pay not to hear. It's not that I don't think you should monetize; just that I'd be in the sad 10% you'd lose. And that's probably ok. You'll still retain the serious users.
WOW - thanks for the vulnerability and transparency and opportunity to help you GROW THIS valuable resource!
- Getting sponsor revenue is great. HOWEVER - it's tough to get unless or UNTIL you grow the community into many thousands/hundreds of thousands and etc
- I'd say KEEP the 21 Hats podcast FREE this is the way to BUILD the fan base
- the DAILY 21 Hats Morning Report is indeed TOUCH I'm sure. What if the WEEKLY Report was FREE and the MORNING report was premium - VERY premium and even MORE valuable?
- What if you TESTED a John Lee Dumas model? People could PAY to get interviewed by Loren for 15 - 60 minutes and have a "SPOTLIGHT" - their book launch, their course etc - which gets a link into your emails and a mention in the podcast?
- What if there was a way to host MASTERMINDS(?) with 1 or more of the 21 hats hosts
- You'd probably need to invest in one least ONE team member to help you put this together!
- Also marketing automation
- Also there's some companies that might pay NOR for sponsorship - Nimble? Keap? Mailchimp?
Loren, I just want to chime in to say that I think your newsletter is uniquely valuable. It has the right voice, covers the right topics, and is the most pertinent newsletter I get as a small business entrepreneur. I stumbled across it a year ago and it is must reading for me now every day. Not sure exactly the best way to monetize it but it definitely should be monetized. It has real value.
Perhaps the initial blast of info in the morning report should be free and then in order to get full articles you would have to be a subscriber. I would not bat an eye at paying $10 per month for that type of access to this content or $20 per month for my company to have access (I routinely forward your articles to my management team and I bet others do too). I think the podcast might be best to be free as it is a way to introduce certain folks to part off your work, but the key value in my mind is in certain aggregated articles in the Morning Report. I always scan all the headlines and then read the full articles I am most interested in. Occasionally I have found myself wanting for more of the full article when I click through to it, which may simply mean most of the meat of it was in the introductory blurb. You might want to balance that a bit if you take this type of approach. All of this is spoken of course as an avid consumer of your fine work, not as an expert in monetizing this type of business model. Whatever you decide, please keep up the great work!
Hi Loren, in the near term I think that offering free and premium versions of the newsletter could be the way to go.
In the long term, have you considered strategic partnerships such as:
-Chambers of Commerce, EO, Vistage, other biz membership orgs offering 21 Hats as a benefit of membership. The Morning Report already curates the news that members of those organizations consume. That saves members time and the subscription fee. The podcast fosters relatedness that can usually only be found in membership orgs like EO. (in my experience). They have budget for things that add value to their members. Going for organizations with national/intl reach gets scale.
-Sponsorship by small business banking or credit card companies. They want your listeners and readers, and have huge budgets. When I was at Amex I spent millions in marketing to small businesses that was only marginally effective. The cost of one single postcard advertising a 5% Amex discount at Staples dwarfs what you should be able to charge for sponsorship. Corporate sponsorship would only work though if they don't try to control the content.
I'm a total fan!