Spotify Goes All in on Podcasts with the Acquisition of Anchor and Gimlet Media

Spotify just bought Anchor and Gimlet media for around $230 million. The music streaming company isn’t done yet as it wants to spend up to $500 million on acquiring more podcast startups this year according to the company’s CEO, Daniel Elk.

Gimlet Media is a podcast network and producer which hosts shows like StartUp, Homecoming, Mogul, The Pitch, Reply All, The Cut, Science VS while Anchor is a DIY podcasting startup. Anchor’s platform has set of tools that make it super easy for anyone(beginner and Pro) to create and monetize their own podcasts and for free Anchor power up to 40% of the world’s new podcasts. With this acquisition, Spotify is going all in on content creation. This is weird as it was Daniel Elk’s motive when he launched Spotify 11 years ago.

The audience numbers explain why this acquisition makes sense now. Spotify comes a close second after Apple in terms of it being a platform for podcasts and podcast listening makes up 20% of Spotify’s usage. Spotify has 207 million monthly active users of which 96 million are paying subscribers- this surpasses Apple Music’s 50 million users, almost twice.

Spotify bought Gimlet media and Anchor with the hope that podcasting will help them find new users, keep the current ones, generate revenue while at it and increase profits as making podcasts inhouse is much more cheaper than songs from music labels. Spotify already has been striking deals to bring original content such as Amy Schumer’s 3 Girls, 1 Keith and Crimetown.

For now, the podcasts produced will not be exclusive as Spotify plans to keep some of those for itself. This acquisition doesn’t still stop Spotify from making video moves into streaming TV, yet.

Spotify could look into Breaker(allows you to follow what your friends are listening to), Medium for its audio stories, Koo!(a social network for short-form audio) or Lyebird, a voice imitation platform and maybe Product Hunt Radio while they’re on their shopping spree.

I love @spotify, and I'm aware they have podcasts, but I never listen to podcasts on it.

— (((Thrill Science))) (@ThrillScience) February 3, 2019

Before all this, Spotify needs to work on its main app:

Spotify needs to reorganize its app for better podcast discovery especially on mobile by separating it from the music category. The current way to get your podcasts is cumbersome as it is – you have to go to your library even though the homepage sometimes shows your favourite podcasts.

Spotify can introduce charts for podcasts as it does for music. Top charts could be curated on the basis of episode and series level for show categories and charts for top podcasts as well. Reviews could be included to guide new or current users on evaluating new episodes or podcasts to listen on and aid in the chart making while at it. Spotify could also bring personalized playlists based on users listening habits just as it does with the Daily Mix.

“We will offer better discovery, data, and monetization to creators.” Daniel Elk, Spotify CEO.

The Anchor and Gimlet acquisitions are expected to close this quarter. In general, Spotify is following in the footsteps of Netflix by locking in more original content and these acquisitions make Spotify a full podcasting stack as they will now cover every piece of the value chain and help them become world’s leading audio platform beating Apple and Google.