With a view to becoming the world’s leading audio platform, Spotify has acquired Gimlet Media as well as startup Anchor. This is the first big content move by the music streamer under Dawn Ostroff, the TV industry veteran who came aboard as Chief Content Officer in June. It follows word earlier this month that Spotify was in talks for Gimlet, the company behind popular podcasts “Homecoming,” “StartUp,” “Reply All” and “Crimetown.” Terms of today’s deals were not disclosed, but Spotify says it is not stopping there and could spend $400M-$500M on multiple acquisitions in 2019.
Reporting Q4 2018 results this morning, Spotify said it has reached 96M premium subscribers and 207M monthly active users. It also netted its first-ever quarterly operating profit with 94M euros ($107.1M).
Increasing podcast listening on Spotify is an important strategy for driving growth, the company said in a statement. “We intend to lean into this strategy in 2019, both to acquire exclusive content and to increase investment in the production of content in-house. The more successful we are, the more we’ll lean into the strategy to accelerate our growth.”
The Gimlet acquisition offers Spotify its “best-in-class” podcast studio with dedicated IP development, production and advertising capabilities. Anchor will bring its platform of tools for podcast creators and its established and rapidly growing creator base.
In January 2018, Brooklyn-based Gimlet Media — formed in 2014 by former This American Life producer Alex Blumberg and Matt Lieber — launched Gimlet Pictures, a film and TV arm headed by Chris Giliberti. That formalized Gimlet’s forays into TV, most recently Amazon’s Homecoming starring Julia Roberts, and the in-the-works Annapurna Pictures movie Man Of The People, with Robert Downey Jr attached. All are based on Gimlet podcasts.
Founded in 2015, Anchor’s end-to-end podcasting platform is available for free and provides creative tools, unlimited content hosting, distribution and monetization options for beginners and professionals.
In a blog post titled “Audio First,” Spotify Founder and CEO Daniel Ek wrote today, “With the world focused on trying to reduce screen time, it opens up a massive audio opportunity… There are endless ways to tell stories that serve to entertain, to educate, to challenge, to inspire or to bring us together and break down cultural barriers. The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular.”
He added, “We believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content. This means the potential to grow much faster with more original programming.”
The Gimlet and Anchor transactions are expected to close in early 2019 and are subject to the customary authorizations.