The podcast industry’s already loud, and Spotify’s cranking up the volume even further - The Hustle
The Hustle

The podcast industry’s already loud, and Spotify’s cranking up the volume even further

Spotify is buying The Ringer in an effort to double down on podcasts

The Sweden-based music streaming giant announced plans to acquire The Ringer — a popular sports media company that produces more than 30 podcasts — for a stack-o-cash of undisclosed height.

Spotify has a lot of faith in Pod

For The Ringer’s founder Bill Simmons and the company’s ~90 employees (all of whom are expected to stick around), the deal could promise both stability and autonomy. 

But it’s also a big deal for Spotify: This Ringer acquisition marks Spotify’s 4th podcast deal of the last 12 months (the first 3 were Gimlet, Anchor FM, and Parcast).

Spotify, which has more paying listeners (124m, a 29% increase since last year) than its growing rival Apple, seems to have bet that podcasts will help maintain its lead.

So far, the strategy seems to be working: When Spotify announced its 4th-quarter earnings yesterday, it revealed that podcast listening on its platform had increased 200% in the past year.

Buuuut… podcasts are also an expensive gamble 

Spotify also reported yesterday that — despite exceeding expectations for user growth — it still failed to turn a profit, and instead posted an operating loss of $85m.  

Why did it still come up short? Cuz podcasts are ’spensive.

It costs a lot to buy up podcasting companies: Spotify spent $400m to acquire Gimlet, Anchor FM, and Parcast last year.

But it also costs a lot to run these podcasting companies. Take The Ringer, for example: After buying the sports website and network, Spotify will likely absorb at least 90 new full-time employees — which also means paying 90 new salaries.

Plus, the Ringer deal is ol’ SpottyGuy’s first acquisition that includes written content.

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