Spotify could have simply pushed its try to capitalize on the booming podcast market into overdrive.
Several weeks in the past, in a be aware trimming Spotify’s value goal to $170, maintained the corporate’s Overweight ranking.
Explaining how the streaming music large can flip issues round, the agency seen a number of issues.
First, Spotify customers have “nice loyalty to the platform.” They consumed four.four hours of content material per week. Apple Music’s customers, compared, eat three.7 hours. Amazon Music Unlimited customers eat 1.7 hours.
In addition, Spotify has the very best reported satisfaction amongst streaming music companies. Two-thirds of all music streaming additionally occurs in playlists, which the corporate dominates.
Yet, the streaming music large has uncared for one space the place rivals shine – podcasts.
Spotify’s customers, Morgan Stanley famous, “love podcasts greater than some other subscriber group.” Users who pay for the service pay attention to five.2 hours of podcasts per week. That’s 48 minutes greater than customers on Apple Music. Yet, most customers haven’t consumed podcasts on Spotify.
That could quickly change, nonetheless, with a brand new acquisition.
Can Gimlet Media assist the streaming music large make the most of the rise of podcasts?
According to the be aware from Morgan Stanley,
“While Spotify’s paid customers spend extra time listening to podcasts than others, Apple stays the platform with highest general podcast listening – underscoring the significance of podcast management for Spotify long-term.”
According to a new report, Spotify desires to department out of the streaming music enterprise. So, the corporate pays over $200 million to buy Gimlet Media.
The podcasting startup produces standard exhibits, together with Reply All and Crimetown, amongst many others. Gimlet additionally produces exhibits for advertisers, which incorporates Gatorade. Listeners reportedly obtain greater than 12 million podcasts every month. The startup additionally has a whole bunch of staff.
Sources say the streaming music large is now in superior talks to accumulate the startup. Recently, the podcasting startup has moved into TV manufacturing. Gimlet not too long ago made a deal that turned Homecoming, initially a scripted podcast, into an Amazon TV present starring Julia Roberts.
Gimlet final had a reported valuation of $70 million. Spotify would pay almost triple that quantity in money.
Asking how the acquisition would have an effect on each firms, Hot Pod, a music trade podcast web site, wrote,
“How does Gimlet’s employees — which now numbers properly north of hundred within the headcount — combine into Spotify? Who stays, who leaves? How will exhibits be located inside the firm? Will Gimlet’s programming be unique on Spotify? (Probably, most likely.)”
Speaking in regards to the firm’s long-term technique with the acquisition, Daniel Levine, a former knowledge staffer at Spotify, explained,
“Why is Spotify trying to purchase Gimlet? Three causes: (1) Differentiate via distinctive content material, (2) Earn higher margin with non-music content material, (three) Capture the advert shifting off radio, DOUBLE the scale of the music market within the US.”