In a sign of just how big the podcasting business is becoming, music streaming giant Spotify is in talks to buy the podcasting company Gimlet Media, as reported by the Wall Street Journal late Friday.
Spotify made its first push into podcasts in 2017 as a way to encroach on the current podcasting leader, Apple, and convince Spotify users to stick around on its own platform to listen to all its audio with it rather than migrate over to Apple Podcasts. Ultimately, podcasting offers a way to increase users’ listening time, boost Spotify’s advertising revenue, and help the company achieve one of its ambitions to disrupt the radio business.
But Spotify’s podcasting efforts remain fairly nascent. It says it has 150,000 podcasts (Apple has over 600,000) and analysts have estimated that Spotify users spend less than 1% of their time listening to them on the platform (although there are also estimates that Spotify commands 19% of podcast listening, to Apple’s 52%). Spotify first introduced original podcasts last fall and included Amy Schumer’s 3 Girls and Jemele Hill’s upcoming Unbothered. It also distributes an exclusive weekly podcast hosted by rapper Joe Budden, and released Chapo, the first podcast from Vice News, about Mexican drug lord Joaquín Guzmán.
By acquiring Gimlet, Spotify would get a huge shot in the arm in the podcasting arena. Founded by former This American Life producer Alex Blumberg and former Boston Consulting Group consultant Matthew Lieber in 2014, Gimlet has become a podcasting production powerhouse, behind such hits as StartUp, Reply All, The Nod, and Homecoming.
It has also expanded into TV and film production, with a TV version of Homecoming on Amazon, and a film in the works based on Reply All. Spotify could lean on this production arm, allowing the company to venture into video as yet another way to diversify its portfolio. Audio or video, Gimlet’s high-end productions could be used to induce Spotify Premium subscriptions. And Gimlet’s acclaimed branded content studio could also give Spotify its own in-house unit to make audio ads and custom podcasts for major advertisers.