Spotify buys Gimlet, Anchor to ramp up its podcast game

Spotify buys podcast firms in bid to become world’s largest audio platform

The audio-streaming service on Wednesday announced that it will acquire podcast producer Gimlet Media and podcast technology company Anchor.

Spotify paid a reported $230 million to buy Gimlet Media, according to Recode. Suddenly, an industry that has been historically low-budget, often fueled by crowdfunding or merchandise and bringing in minimal ad revenue, is about to be flooded with an unparalleled amount of money and resources. But when it's all said and done, Ek believes the move will position Spotify as more than just a streaming music service.

"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.

Gimlet podcasts are downloaded over twelve million times per month by listeners from almost 190 countries worldwide.

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. And Ek said the company is not done with acquisitions.

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With Gimlet and Anchor, Spotify is bringing some of the biggest players in podcasts under its banner. Pandora, YouTube, IHeartRadio, Google, Amazon and others also offer music streaming and podcasts. Recode first that Spotify and Gimlet were in talks last week.

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. "The medium of audio is uniquely great at creating human connection and understanding".

He also added, "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". The app "powers 1 in 3 of all new podcasts created in the world", according to its website.

Where Spotify can offer a better home to podcasts than rivals is in its discovery and personalisation options for users, and monetisation services to creators. "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". Gimlet will bring to Spotify its best-in-class podcast studio with dedicated IP development, production and advertising capabilities. The deals are targeted to be completed in the first quarter. Hopefully, it means we'll be getting higher-quality podcasts and more of them, all in one convenient place, but we'll have to wait and see.

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