Culture

Spotify spends over $200 million securing podcasting future

Spotify spends over $200 million securing podcasting future”

Spotify said Wednesday it would acquire NY podcasting companies Gimlet Media and Anchor FM, establishing itself as a major player in podcasting, a once-nascent category that has emerged as a booming industry. It has also seen huge success with podcasts partnering with other media organizations such as NY magazine's "The Cut on Tuesdays".

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.

"The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular, " he wrote. 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 seeking ways to become sustainably profitable.

The growth is largely related to positive results from the company's partnership with Google Home as well as its promotional holiday campaign.

It is hoped that, by becoming the place to go for podcasts, it will bring in new users rather than restrict the listening behaviours of existing subscribers. In 2017, advertisers in the United States spent about $314 million on podcast ads, according to the Interactive Advertising Bureau. That's dwarfed by digital video ad spending, which totaled $11.9 billion in 2017. They're particularly popular with the coveted "millennial" demographic.

Spotify's ambitions not only lie in being a leading platform for podcast creators, then, but also being a producer of podcasts - to increase in-house content production as well as acquire exclusive series. If you already listen to Gimlet Media podcasts will you continue doing so?

Gimlet, based in NY, has produced several popular podcasts, including "Homecoming", a drama about a rehabilitation program for former military members that was made into an Amazon show starring Julia Roberts. The closest deal was iHeartMedia's acquisition of Stuff Media for $55 million in September.

Spotify executives said it would employ its most recent acquisitions to bring more content to its platform. Terms of the deals were not disclosed, but the company said in a statement that the acquisitions will allow it to both a "producer of podcasts" and a "platform for podcast creators".



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