Published: Thu, February 07, 2019
Culture&Arts | By Dora Pope

Spotify aims to become podcasting power player

Spotify aims to become podcasting power player

The podcast firms probably won't be Spotify's only acquisitions this year, either - it says it has its sights set on a potential total acquisition spend of $400-$500M in 2019.

Spotify has announced that it has acquired two major podcast companies.

Separately, the company said it will acquire podcast companies Gimlet Media and Anchor for an undisclosed amount.

The value of the Gimlet purchase was put at $230 million by Recode, a technology website. But when it's all said and done, Ek believes the move will position Spotify as more than just a streaming music service.

Spotify isn't finished with podcast-related acquisitions either.

Based on radio industry data, we believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content.

With Gimlet and Anchor, Spotify is bringing some of the biggest players in podcasts under its banner. During its last round of funding in 2017, Gimlet was valued at about $70 million.

In its earnings letter to shareholders, Spotify said podcasts were part of its strategy for faster revenue growth.

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In Ek's blog today he stated that "This opportunity starts with the next phase of growth in audio - podcasting".

In a separate blog post, Ek suggested that "over time, 20% of all Spotify listening will be non-music content", adding that Spotify's podcast users "spend nearly twice the time on the platform" as those who listen exclusively to music.

The acquisitions may also help reduce the money that Spotify pays to labels by cutting its music-streaming fees, some analysts said.

But snagging Gimlet - the New York-based narrative podcasting company founded in 2014 - along with Anchor, a platform to create, distribute and monetize podcasts, the streaming group aims to "meaningfully accelerate our path to becoming the world's leading audio platform" and "give users around the world access to the best podcast content", the company's CEO Daniel Ek said in a statement.

Anchor, also based in NY, is a platform that provides tools for podcasters to monetize and distribute their programs.

Podcasts produced by Gimlet Media cover everything from history to internet culture, with some outlets reporting that it was bought by Spotify for over $200 million. Therefore, if the service can get more people to listen to a higher number of podcasts, maybe it can even become the world's largest.

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.

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