Spotify is getting into podcasting in a big way, as the music-streaming giant today announced its intentions to acquire Gimlet Media and Anchor. Terms of the deals were not disclosed.
Reports that Spotify was looking to double down on its podcasting efforts by snapping up Gimlet had been circulating for a while. Founded in 2014, Gimlet is a New York-based podcast studio and network with around $28.5 million in funding, and although official figures have not been disclosed, reports have pegged this specific deal at around $200 million. As Gimlet is a major podcast-specific production company, this deal could go some way toward helping Spotify move into more original audio content.
Founded out of New York in 2015, Anchor is one of a number of podcasting startups that make it easy for anyone to record audio on the move and distribute the recording directly from their smartphone. It has raised around $15 million in funding, including a $10 million series A round led by Alphabet’s investment arm, GV.
While the Anchor deal is a little more of a curveball, the duo have already integrated their platforms in the past — following a platform redesign last year, Anchor allowed podcasters to distribute their recordings directly to Spotify, among other streaming services.
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Non-music content
Today’s news positions Spotify squarely against the likes of Apple and Google, both of which have been investing in the podcasting realm through dedicated analytics products and original content. Spotify is no stranger to original podcasting content itself, but these acquisitions ramp things up a notch — not just by increasing its in-house production capabilities, but also in terms of better enabling creators to monetize their work.
“These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience, as well as enhance the Spotify brand,” said Spotify cofounder and CEO Daniel Ek, in a press release.
VC firms have plowed significant investment into podcasting, and for good reason. Last year’s Edison Research Infinite Dial report on podcast listening trends suggested that 26 percent of people in the U.S. alone now listen to at least one podcast each month, up 2 percentage points on the previous year. Moreover, the report found that the number of podcasts people listen to on average rose to seven per week, up from five in 2017.
The Gimlet and Anchor acquisitions are expected to close later this quarter. In a separate blog post, Ek added that he believes more than 20 percent of all Spotify listening will eventually entail non-music content.
Certainly, Spotify is well positioned to capture this anticipated growth in podcasting. It already operates a subscription and ad-based business, and applying that model to the world of podcasts makes a great deal of sense. Moreover, Spotify offers smart algorithm-based recommendations for music, and it doesn’t take a great leap of imagination to conclude that it will reappropriate this feature for other forms of audio content.
“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,” Ek added. “We will offer better discovery, data, and monetization to creators. These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience while enhancing the Spotify brand.”
These new acquisitions will certainly not be Spotify’s last in the field of podcasting — in its Q4 shareholder letter, the company said it has earmarked up to $500 million for similar acquisitions throughout 2019.
In short, Spotify is getting serious about podcasts.
