Spotify is making a major push to bolster its presence in the world of podcasting, buying two of the biggest players in the space: podcast network and producer Gimlet Media, and the podcast platform and service provider Anchor.
The acquisitions mark a major expansion of Spotify’s podcasting business, bolstering both its content chops and its service and monetization capabilities.
In its quarterly earnings report, released Wednesday morning, the company said: “We want to acquire more [podcast businesses], and have line-of-sight on total spend of $400-$500M on multiple acquisitions in 2019.”
Terms of the deals announced today were not disclosed, though the Gimlet deal is reported to be valued at around $230 million. The company expects them to close in the next couple of months.
Spotify is expected to retain all the employees of both companies and run them as subsidiaries. Gimlet Media will create new podcasts exclusive to the Spotify platform, though existing podcasts, such as “Reply All” and “Every Little Thing,” will continue to be available elsewhere.
Anchor has been at the forefront of trying to grow podcast monetization. The company launched an advertising solution called Anchor Sponsorships late last year. Its number of ad-supported podcasts more than doubled in the first month after releasing the product.
While Spotify’s bread and butter is music, it has leaned on podcasting to help differentiate it from competing subscription music platforms — and to help boost its free, ad-supported business lines. The IAB released a report last year projecting that annual podcast ad revenue would reach $659 million by 2020.
Spotify CEO Daniel Ek wrote in a blog post announcing the deals that the company will bring the core attributes it brought to the music business, namely curation and customization, to podcasts.
Ek wrote: “To be clear, this doesn’t make music any less important at Spotify. Our core business is performing very well. But as we expand deeper into audio, especially with original content, we will scale our entire business, creating leverage in the model through subscriptions and ads. ... We want Spotify to continue to be at the center of the global audio economy.”