The music streaming platform, Spotify has publicly announced its move to acquire podcasting companies, in a bid to make its non-musical content as large as 20% of all listening on its website. Judging from its past investments in podcasting, which includes sponsoring shows from Amy Schumer (comedian) and Joe Budden (rapper)— we won’t be far from the truth by viewing this move as a tip of the spot-berg.
Spotify hasn’t confirmed the price tag for Gimlet Media. But rumors has it that Gimlet Media was sold for $230m. Commenting on the deal might affect other deals negatively and the platform is not willing to take the risk.
The sensitivity of this move is quite obvious but the company maintains that the step is worth taking. According to Daniel Ek, “Our podcast users are almost twice as engaged as non-podcast listeners on our platform and as a result, spend even more time listening to music,”.
The next big step after expansion
After the acquisition of podcasting companies, the next step should be monetizing podcasting — instead of the usual free distribution of shows. This would earn the company more dollars and put a smile on the creators’ faces. Monetization can come in form of ad-buying or direct payment from users. Either way, money is a crucial item in the process of development.
The company also plans to invest more in original content — exclusive podcasts— another big move from Spotify.
Buying podcasting companies can be considered a good and profitable move. With the total number of global, monthly podcast listeners hitting one billion in 2020, and advertising revenues getting close to $4bn, if Ovum forecast is accurate, there is a big opportunity ahead. However, Spotify isn’t the only companying eyeing this.