Spotify bets big on podcasts with acquisition of Gimlet and Anchor

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Music-streaming king Spotify sees a future in podcasts.

The company on Wednesday that it has made two huge acquisitions that firmly plant Spotify in the podcasting business. The music-streaming giant has bought Gimlet Media Inc., a popular podcast producer, and Anchor, a platform that helps creators produce and publish their podcast.

According to Recode, Spotify is around $230 million for Gimlet. Recode first that Spotify and Gimlet were in talks last week. It’s currently unknown how much Spotify spent on Anchor.

Recode points out that the acquisition puts Spotify in the content creation business for the first time — something the company hasn’t even done in its almost 11 years in the music industry. 

Spotify isn’t finished with podcast-related acquisition either. The company is looking to spend up to $500 million this year to bolster its podcasting business.

The amount Spotify is looking to spend on podcast companies is greater than a year of for the entire podcasting market.

In a , Spotify founder and CEO Daniel Ek shared his thoughts on the company’s latest moves into podcasting. He boasts that with its 200 million users, the music streaming service is already the second biggest podcasting platform after Apple iTunes. Ek says that he fully expects 20 percent of all Spotify listening to be non-music related content eventually.

Ek also touches upon some thoughts that help explain just why Spotify paid as much as it did for the acquisitions.

“Video is about a trillion dollar market. And the music and radio industry is worth around a hundred billion dollars,” Ek explains. “I always come back to the same question: Are our eyes really worth 10 times more than our ears? I firmly believe this is not the case.”

“With the world focused on trying to reduce screen time, it opens up a massive audio opportunity,” writes Ek.

Spotify has only been in the podcasting business for about , when it first rolled out podcasts onto its already very popular music streaming service. It was back in 2017 that the company was talking with podcast producers, like Gimlet, in order to bring original podcast content to its platform. The service opened up to just this past October.

Gimlet is responsible for producing and publishing some of the most popular podcasts on the internet like Reply All, StartUp, and Crimetown. The podcast producer found even for podcasting success when it turned one of its shows into the popular Amazon series, . 

In it’s own acquisition announcement, the podcast production and hosting platform, Anchor, stated that its platform is currently powering of all new podcasts. (Disclaimer: The author of this piece was briefly contracted in 2017 to host a show for Anchor.)

For a medium on the rise, podcasting has been largely ignored as a business. Podcasters have complained that even Apple largely ignores podcasts when compared to its other services. It seems like Spotify may have found an opportunity.