_edited.png)
By: Ben Jochem | bmj5307@psu.edu | February 8, 2018
Spotify (SPOT), one of the world’s largest music streaming services, is in advanced discussions to acquire Gimlet Media for $200 million. Gimlet, a popular podcasting start-up, raised $22 million in 2017 funding and was valued around $70 million that August. Recently, however, Gimlet has been on a roll producing popular new shows such as ReplyAll and Crimetown. In addition, the company has also expanded into the realm of TV production which includes its scripted podcast Homecoming, an Amazon TV show, starring Julia Roberts. Furthermore, Gimlet Media has a content deal with the Wall Street Journal which bolsters its current reputation.
The finalization of this deal would mark Spotify’s (SPOT) first purchase of a content company. The company has been exclusively a music streaming service, but has been looking to diversify in order to capture more of consumers’ listening time and thus boost profits. Their acquisition of Gimlet media would be the largest podcast deal in the industry placing them ahead of Apple who has been the majority holder in the market. With the rapid growth of podcasts in the previous years and months, this is a monumental deal for Spotify (SPOT).
I feel that this deal is both practical and smart for both Spotify (SPOT) and Gimlet Media. In 2018, six million more Americans listened to podcasts weekly than in 2017 and podcast listeners listened to 40 percent more podcasts in 2017. The number of podcast fans continues to grow in 2019 and the market is rapidly growing. For Spotify (SPOT), owning a majority stake in the booming podcast market could be the needed change to capture more consumer listening time and therefore boost profits. For Gimlet media, on the other hand, a $200 million offer represents a sizable premium to their valuation of $70 million just a year earlier. With podcast growth at an all-time high, there is no better time for the start-up to sell for maximum profit.
📷
Sources
Comentarios