Published: Thu, February 07, 2019
Arts&Culture | By Matthew Castillo

Spotify is embracing podcasting with the purchase of two podcast giants

Spotify is embracing podcasting with the purchase of two podcast giants

In the company's earnings report, Spotify shared its plans to spend $400 to $500 million on new properties this year.

Webster said he thought Spotify's acquisition into podcasting also could push more labels to become more open to letting podcasts use licensed music. The music-streaming pioneer gobbled up two podcasting companies, Gimlet and Anchor, on Wednesday.

One interesting aspect of these acquisitions is whether the podcasts will become Spotify exclusives, or whether they'll be able to be distributed elsewhere too. It was back in 2017 that the company was talking with podcast producers, like Gimlet, in order to bring original podcast content to its platform.

Ek estimated that in time, more than 20 percent of all Spotify listening will be non-music content.

Podcasts have enjoyed a popularity boost in recent years, with weekly listening numbers reaching a high of 48 million in the United States in 2018 - and Spotify has taken notice.

"While podcasting is still a relatively small business today, I see incredible growth potential in this space", Ek said on a call with investors Wednesday morning.

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".

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.

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. Gimlet is known for producing the podcast "Homecoming", a fictional thriller, which was made into an Amazon series starring Julia Roberts.

Spotify doesn't seem like it's finished spending money on acquisitions yet, either. During its last round of funding in 2017, Gimlet was valued at about $70 million.

Read the comments from CEOs of Spotify, Gimlet and Anchor below.

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

The news put a bow on the audio platform's first quarter to turn a profit. "We look forward to continuing to empower creators all over the world to build an audience, generate revenue, and most importantly, have their voices heard".

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