Spotify is alleged to be in superior talks to buy startup Gimlet Media for over $200 million, based on a number of retailers — a transfer that may increase the music streaming service’s enterprise into podcasts and unique content material.
Gimlet, primarily based in Brooklyn, is the corporate behind well-liked exhibits resembling Reply All. It has additionally ventured into TV manufacturing: Its scripted podcast Homecoming was picked up by Amazon and was a collection beginning Julia Roberts. Different exhibits by Gimlet Media embody enterprise collection StartUp, true crime collection Crimetown, and narrative drama The Horror of Dolores Roach.
If the deal pushes by way of, this would be the first time that Spotify will purchase a content material firm. Spotify has been attempting to enter the video enterprise, but it surely has additionally been saying that it desires to increase into podcasting. In early 2018, Spotify launched a brand new part that mixes visible components with podcasts, which incorporates content material from Gimlet Media. The service additionally began to permit customers so as to add their exhibits to the podcast part (right here’s how to take action).
Spotify’s 200 million customers depend on the music streaming service for his or her day by day dose of audio content material, so including podcasts to its choices won’t change it a lot from the person’s perspective. In comparison with the tightly managed music enterprise, the podcast trade remains to be small and younger, with no dominant labels however with nice promise.
Podcasting’s advert mannequin generated $315 million in income in 2017, which is a fraction of the $11.9 billion that digital video advertisements earned that 12 months. Nevertheless, the podcasting trade is rising quickly, which makes it a sexy type of content material for platforms and publishers searching for new income streams.
An acquisition of Gimlet Media will place Spotify firmly into the podcast trade — and into deeper competitors with Apple, a significant podcast distributor that doesn’t spend a lot effort on creating podcast content material.
Providing podcasts will preserve customers on Spotify, moderately than having them transfer to different apps to entry such content material. Spotify may also be capable to herald extra customers and advert income, whereas giving it an even bigger alternative to create unique content material. All issues value shopping for a Gimlet or two.