Spotify Eyes Its First Content-Based Acquisition in Gimlet Media
Spotify has said several times in recent months that the next frontier they aim to tackle is the world of podcasting; this week, they appear to be literally putting their money where their mouth is.
The streaming service is, per Recode, in advanced talks to acquire Brooklyn-based podcasting company Gimlet Media for nearly 200 million dollars. Responsible for popular offerings like Reply All (about the complicated relationship between the internet and its users) and Crimetown (about the impact organized crime has on the cities that incubate it), as well as the recently adapted Homecoming, Gimlet also creates sponsored content for companies like Gatorade. It last raised funds in 2017, and was valued at 70 million dollars.
For Spotify, the move has a number of incentives. First, it allows the demand of podcasts to be met on its platform in new and unprecedented ways. Following the decision to allow all podcast creators to put their offerings on the platform earlier this year, listening in that genre of audio grew 175% in 2018. At CES, the company’s Head of Studios and Video Courtney Holt noted a desire to make the platform even more attractive for fans of the form—while courting new users who currently use it for music. “People who consume podcasts on Spotify are consuming more of Spotify, including music,” she said, while also touting the natural fit of another audio medium for the platform. “We’re a great audio platform, and we really wanted to focus on providing the best audio experience. We found podcasting to be a great complement to our music service.”
While Spotify has excelled in conquering the world of streaming audio, its attempts to establish a foothold in video have sputtered; here too, Gimlet may be able to help. Their first foray into the arena came with Amazon Prime’s Homecoming, a Sam Esmail-produced adaptation of their show of the same name. Starring Julia Roberts and Stephan James, the show garnered critical acclaim—and could provide an infusion of credibility for Spotify in the space.
With this blockbuster acquisition, will likely also come an influx of spending in the podcasting advertising market. In 2017, podcasting generated an estimated 315 million dollars in ad revenue, but that number is growing quickly…and it will be more attractive to do so if access to podcast offerings becomes more ubiquitous through platforms like Spotify.