Companies, and indeed people, remake themselves all the time. And it seems that it is no different for Spotify, who has just announced that they are acquiring podcast producing and hosting platforms Gimlet and Anchor. And that they plan to acquire a whole lot more in the podcasting space, to become a full-service audio provider.
This week Spotify announced that they were setting their sights on ‘strategic acquisitions to accelerate growth in podcasting’.
Now, most of you know Spotify as a music service, not a podcasting service. Indeed, that has been nearly the whole focus of their brand. So why this new direction?
Because Spotify is looking to become not only a leading music platform, which it already is, but, and we quote, “the world’s leading audio platform.” All audio, apparently.
These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform
As Daniel Ek, Spotify’s CEO explains in the Spotify announcement, “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. We are proud to welcome Gimlet and Anchor to the Spotify team, and we look forward to what we will accomplish together.”
Ek goes on to explain, in a personal blog post, that “This opportunity starts with the next phase of growth in audio — podcasting. There are endless ways to tell stories that serve to entertain, to educate, to challenge, to inspire, or to bring us together and break down cultural barriers. 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.”
According to the Guardian, Spotify is planning to make up to another $500million in audio acquisitions.
Spotify currently has 96million paying subscribers (and over twice that if you include subscribers using only their free services). Spotify currently does offer podcasts – but they don’t produce them. And, says Spotify, those subscribers who listen to podcasts on Spotify spend almost twice as much time on Spotify.
Says Ek, “Users love having podcasts as a part of their Spotify experience. Our podcast users spend almost twice the time on the platform, and spend even more time listening to music. We have also seen that by having unique programming, people who previously thought Spotify was not right for them will give it a try.”
Here is Spotify’s full announcement:
Spotify Announces Strategic Acquisitions to Accelerate Growth in Podcasting
NEW YORK–(BUSINESS WIRE)– Spotify Technology S.A. (NYSE:SPOT) (the “company”), the world’s most popular music streaming service, today announced that it has entered into definitive agreements to acquire Gimlet Media Inc. (“Gimlet”), the renowned independent producer of podcast content, and Anchor (“Anchor”), the company leading the market for podcast creation, publishing, and monetization services. Terms of the transactions were not disclosed.
With these acquisitions, Spotify is positioned to become both the premier producer of podcasts and the leading platform for podcast creators. Gimlet will bring to Spotify its best-in-class podcast studio with dedicated IP development, production and advertising capabilities. Anchor will bring its platform of tools for podcast creators and its established and rapidly growing creator base.
“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 Daniel Ek, Spotify co-founder and CEO. “We are proud to welcome Gimlet and Anchor to the Spotify team, and we look forward to what we will accomplish together.”
For more information on Spotify’s audio-first strategy and the acquisitions, read Daniel Ek’s blog post on Spotify’s For the Record newsroom.
“Spotify is poised to become the largest audio platform in the world and we are excited for Gimlet’s award-winning podcasts to connect with new audiences around the world,” said Alex Blumberg and Matt Lieber, co-founders of Gimlet Media. “The medium of audio is uniquely great at creating human connection and understanding. We are thrilled that Gimlet is joining Spotify to do that at a global scale, on the platform and beyond.”
“We are incredibly excited to introduce Anchor’s industry-best podcasting tools to Spotify’s massive user base as we continue our journey, now with even greater resources,” said Michael Mignano, CEO of Anchor. “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.”
The transactions are expected to close in the first quarter of 2019 and subject to customary closing conditions.