Wednesday, 24 April, 2019

Spotify aims to become podcasting power player, Companies & Markets News & Top Stories

Spotify buys podcast firms in bid to become world’s largest audio platform Spotify is embracing podcasting with the purchase of two podcast giants
Charles Bowen | 07 February, 2019, 13:08

Swedish audio streaming company Spotify has acquired podcast production company Gimlet Media and do-it-yourself podcasting platform Anchor to increase its podcast offerings.

Apple has become Spotify's primary rival since the tech giant launched its own music streaming service in 2015. Pandora, YouTube, IHeartRadio, Google, Amazon and others also offer music streaming and podcasts.

Ek also wrote about Spotify's approach to podcasting, saying that it will be similar to their approach to music: "Just as we've done with music, our work in podcasting will focus intensively on the curation and customization that users have come to expect from Spotify".

While clearly telling of how serious Spotify is about the role of podcasts in its future model, the acquisitions don't mark the beginning of Spotify's venture into podcasts. That alone would be the biggest acquisition in Spotify's history. It wasn't clear if Spotify will distribute its new podcasts exclusively, make them widely available, or choose some intermediate step such as allowing other services to distribute them following a window of Spotify exclusivity.

"Spotify is poised to become the largest audio platform in the world and we are excited for Gimlet's award-winning podcasts to connect with new audiences around the world", said Alex Blumberg and Matt Lieber, co-founders of Gimlet Media. So far, that strategy has produced some hits such as the series "Stranger Things" and the thriller "Bird Box".

Despite its widespread popularity, podcasting in the United States has remained a small industry. In 2017, advertisers in the United States spent about $314 million on podcast ads, according to the Interactive Advertising Bureau.

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An estimated 73 million people tune in to some form of podcast on a monthly basis, according to Edison Research.

Gimlet is responsible for producing and publishing some of the most popular podcasts on the internet like Reply All, StartUp, and Crimetown.

Spotify did not specify the cost of acquiring the podcasting companies but did say it would invest between 400 and 500 million dollars this year for multiple acquisitions.

Spotify posted fourth-quarter operating profit of €94m compared with a mean forecast for a loss of €16m in a Reuters poll of analysts and a year-ago loss of €87m.

With these acquisitions, Spotify is positioned to become both the premier producer of podcasts and the leading platform for podcast creators. Over time, Ek said he predicts about 20 percent of all programming on Spotify will be "non-music content".

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