Spotify takes a big jump into podcasting with Gimlet and Anchor purchases, to make original programming
- Last week Spotify took over two podcasting companies and is now the second biggest podcaster
- Other podcasters include Pandora, YouTube, IHeartRadio, Google and Amazon
Spotify is making a bigger bet on podcasts as it looks to bring a Netflix-like model of original programmes to the audio world. The music streaming pioneer last week gobbled up two podcasting companies, Gimlet and Anchor.
Although streaming is becoming an increasingly popular way to listen to music, Spotify and other services such as Pandora have struggled to make money because of the royalties and other fees that they have to pay to record labels, songwriters and performers.
The acquisitions are about “expanding our mission from just being about music to being about all of audio and being the world’s leading audio platform,” chief executive Daniel Ek said.
The company didn’t disclose terms, but The Wall Street Journal cited people familiar with the transactions as saying Anchor, a podcast production and hosting platform, was valued at more than US$150 million and Gimlet at more than US$200 million. Gimlet produces high-end podcasts and was co-founded by Alex Blumberg, a veteran of the NPR radio show This American Life.
Spotify, which is based in Stockholm and went public in April 2018, charges US$10 a month for its “premium” ad-free music service. It also offers a free ad-supported service.
Apple has become Spotify’s primary rival since the tech giant launched its own music streaming service in 2015. But although it has been outgunned financially, Spotify has been able to stay a step ahead of Apple in terms of subscribers. It counted 96 million subscribers in the fourth quarter, up 36 per cent from a year ago.