Spotify is best known as a music-streaming service — but it’s placing a big new bet on building a podcasting empire.
On Wednesday, Spotify announced deals to acquire Gimlet Media, the podcast producer whose shows include “Homecoming,” “StartUp” and “Reply All,” and Anchor, which offers tools for podcast creation, publishing, and monetization services.
Terms of the deals were not disclosed; Spotify is paying $230 million for Gimlet, per a Recode report. The transactions are expected to close in the first quarter of 2019 and subject to customary closing conditions.
And Spotify chief Daniel Ek is looking to spend more on M&A: The company disclosed that it plans to acquire more podcasting companies, pegging total spending of $400 million-$500 million on multiple acquisitions in 2019.
“These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience as well as enhance the Spotify brand,” Ek said in announcing the acquisitions. “We are proud to welcome Gimlet and Anchor to the Spotify team, and we look forward to what we will accomplish together.”
Spotify announced the acquisitions along with releasing fourth-quarter 2018 results. The company now has over 96 million Spotify Premium subscribers — up 36% year over year — across 78 markets. Total monthly active users climbed 29%, to 207 million, for the year-end quarter, with growth topping Spotify’s forecasts in most markets with especially strong growth in Latin America and other emerging regions, the company said.
Spotify’s Q4 revenue was $1.7 billion (€1.495 billion), up 30%. The company cut operating costs by 17% in the fourth quarter, resulting in an operating profit of $107 million (€94 million) — Spotify’s first quarterly operating profit.