Spotify co-founder and CEO Daniel Ek have announced that the company has just bought two of the largest podcasting producers in the world, Gimlet Media and Anchor. A declaration that their specialty is the next big area of growth for the world’s largest paid music service.
Podcasting allows Spotify to increase the amount of time its users spend on the app and reduce its payments to music companies. It also opens up another front of competition with Apple Inc., the market leader in podcasting. Apple Music is the second-most-popular paid music service after Spotify.
Last year, Spotify reported an operating loss of EUR 87 million during the same period. The result was even better than the average estimate from 18 analysts’ forecasts, which Infront Data compiled for the report, which was on an operating profit of EUR – 16.4 million. However, for the full year of 2018, Spotify reports an operating loss of EUR 43 million.
According to Daniel Ek, CEO of Spotify, podcasts will shortly become 20% of the total listeners of the platform. “Our podcast users spend twice as much time and even more listening to music.” It also considers that betting on original content will be a critical differentiated element from the competition. The operating profit, corresponding to just under SEK 1 billion, is the first to date for the music company.