Spotify is set to buy podcasting companies Gimlet Media and Anchor in a move that will reshape the landscape of the nascent industry.
The streaming service announced the two deals in a blog post from CEO Daniel Ek today, in which he called podcasting the “next growth phase in audio.” While Spotify wouldn’t disclose the size of the Gimlet and Anchor deals, Recode reported that the company paid $230 million for Gimlet alone.
Spotify said in its concurrent earnings report that it’s prepared to spend a total of between $400 million and $500 million on acquisitions this year that will bring more established podcast titles under its exclusive control and bolster its own ability to produce them in-house.
Those twin goals are evident in Spotify’s deals this week; Gimlet is a major podcasting network that’s home to popular titles like Reply All, StartUp and Homecoming, while Anchor is primarily a suite of tools for the production, distribution and monetization of homegrown podcasts.
“Podcasting is evolving as a mashup platform of hobbyists and serious producers,” Fred Jacobs, an audio media consultant at Jacobs Media Strategies, said in an email. “These acquisitions tell us Spotify has the full spectrum of podcasting in its crosshairs.”
Podcasting is still generally seen as having major potential in the digital audio space thanks to its ever-growing popularity as a medium, but the industry has also been hampered by a lack consistent measurement standards and targeting capabilities. The failure of monetization to keep pace with a glut of content was evident in moves like BuzzFeed’s shuttering of its podcast division and Panoply’s slashing of editorial operations last fall.
Anchor has been among the companies working to fix this problem with an in-house monetization program it rolled out last fall. The company claimed earlier this month that it has doubled the number of podcasts with ads on the market since then.
Spotify wants to use its existing audio infrastructure to improve the data, discovery and monetization for podcast creators and expects the industry to grow “significantly larger when you add internet-level monetization to it,” according to Ek.
Spotify sees the loyal, engaged audiences that podcasting generates as a way for the platform to drive user growth and keep its existing 207 million users regularly tuning into the service.
Gimlet Media co-founders Alex Blumberg and Matt Lieber said in a statement that they were “thrilled” to be joining Spotify.
“We are still at the dawn of the second golden age of audio, and we know Spotify is a perfect partner and platform to take Gimlet—and podcasting at large—to a new level,” the co-founders said.
Aside from the acquisitions, Spotify’s shares dipped after its earnings report this morning as its positive fourth-quarter profit and user growth failed to stem Wall Street’s disappointment in lower-than-expected revenue.