Swedish music streaming giant Spotify has acquired podcast advertising and publishing firm Megaphone, in a deal worth a reported $235 million.
The deal will help Spotify provide targeted ads, and expand advertising monitoring tools to third-party podcast providers. The Stockholm brand’s advertising revenue will rise this quarter, executives have claimed.
It is the latest in a flurry of deals made by Spotify, which is trying to boost its presence in the booming podcast industry. Since last February, when it bought Alex Blumberg’s network Gimlet Media, Spotify has bagged high-profile shows like The Joe Rogan Experience and Last Podcast on the Left.
More recently the company has bagged deals for The Michelle Obama Podcast and Addison Rae’s Mama Knows Best. Spotify is now home to 1.9m pods, up from 1.5m last quarter.
This February Spotify bought Bill Simmons’ sports and pop network Ringer, home to over 30 podcasts. Spotify has 299m listeners in 92 markets, and claims to be the second most popular podcast platform, behind Apple Podcasts.
The acquisition of Megaphone—formerly Panoply Media—a Washington, DC-based startup that has become one of the industry’s leading ad platforms since its 2015 foundation, is another clear sign of Spotify’s intent.
“We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant,” Spotify’s chief content and advertising business manager Dawn Ostroff said.
Founded in 2006 by Daniel Ek and Martin Lorentzon, Spotify now has 130m premium subscribers. In 2019, a year after going public, the company made $7.3bn in revenue, with $1.8bn of that profit.