Spotify Bets Hundreds of Millions on Podcasting Future
Spotify spends up to $500 million to acquire podcast companies Gimlet and Anchor as it pushes into the audio medium. The streaming giant sees podcasting as a key growth area to stay ahead of competitors like Apple Music.
Spotify commits up to $500 million to podcasting acquisitions, purchasing Gimlet for a reported $230 million and acquiring the creation platform Anchor. This massive investment far exceeds the total $314 million in podcasting revenues generated in 2017, highlighting the company's aggressive new strategy. Spotify is betting heavily that it turns this historically niche medium into a major profit driver.
The music streaming giant arrives late to the podcasting space, only opening podcast submissions to all creators last October. Despite a initially poor user experience that lacked basic features like a 15-second skip, Spotify still sees high listener engagement. The company realizes that users prefer accessing all audio content in a single application rather than switching between different platforms.
Spotify plans to leverage its proven strength in content discovery to solve one of the biggest pain points in the podcasting industry. As Apple Music continues to grow as a competitive threat, Spotify views this all-in podcasting push as essential for its future. The company ultimately aims to replicate its music streaming success in the world of spoken audio.