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Spotify is making a bigger bet on podcasts because it seems to bring a model of Netflix-style programs to the world of audio. The pioneer of streaming music last week engulfed two podcasting companies, Gimlet and Anchor.
Although streaming is increasingly used to listening to music, Spotify and other services, such as Pandora, are struggling to make money because of the royalties and other fees they have to pay to the labels. , songwriters and performers.
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The acquisitions are intended to "expand our mission from music to all audio and become the world's leading audio platform," said General Manager Daniel Ek.
The company did not disclose the conditions, but The Wall Street Journal People familiar with the transactions said that Anchor, a platform for production and hosting of podcasts, was worth more than 150 million US dollars and Gimlet, more than 200 million US dollars. Gimlet produces high-end podcasts and was co-founded by Alex Blumberg, a veteran of the NPR radio show This American life.
Spotify, based in Stockholm and IPO in April 2018, charges $ 10 a month for its premium advertising-free music service. It also offers a free service funded by advertising.
Apple has become the main rival of Spotify since the technology giant launched its own streaming music service in 2015. However, although it was out of date financially, Spotify was able to stay ahead of the game. on Apple in terms of subscribers. It had 96 million subscribers in the fourth quarter, up 36% from the previous year.
Apple's streaming music service has more than 50 million subscribers, according to CEO Tim Cook. Pandora, YouTube, IHeartRadio, Google, Amazon and others also offer music streams and podcasts.
Last Wednesday, in an article on his blog, Ek said that Spotify had become the second podcasting platform in less than two years.
"The format is really evolving and, although podcasting is still a relatively small business, I see incredible growth potential for space and for Spotify in particular," he wrote.
There are many ways to listen to most podcasts – among them, streaming services, downloads, and podcast specific applications such as Castbox and Stitcher for Podcasts.
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It was unclear whether Spotify would distribute its new podcasts exclusively, make them widely available, or choose an intermediate step, such as allowing other services to distribute them in a Spotify exclusive window. Spotify did not return a comment request.
Spotify has already produced original podcasts, including a series with comedian Amy Schumer and another with rapper and broadcaster Joe Budden.
Ek said that people who listen to podcasts via Spotify spend twice as much time on the service as other users.
Spotify hopes to emulate Netflix, which has invested billions of dollars in the development of original series and films. Until now, this strategy has produced successes such as the series Strange things and the thriller Bird box.
The podcast industry is much smaller but growing. Podcasts have entered the mainstream with the success of Serial, a series of investigative journalism of 2014 on a murder that has become a cultural phenomenon, generating not only tens of millions of downloads, but also a new trial for the convicted murderer.
According to Edison Research, about 73 million people watch a podcast every month. They are particularly popular with the coveted "millennium".
Transactions should be concluded in the first quarter. And Ek says the company has not completed its acquisitions. Spotify plans to spend between $ 400 million and $ 500 million on acquisitions in 2019.
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