Spotify wants to be the biggest player in podcasting. And its path to this objective has, thus far at least, been paved with gold. And by gold, of course, we mean Spotify’s gold. An amount exceeding $900 million as a matter of fact.
The Swedish streaming company has largely been acquiring its way to this leadership perch. Its latest target is Whoshkaa, an on-demand audio creator platform based in Australia that Spotify acquired this month for an undisclosed amount.
Whoshkaa was founded in 2016 by former Macquarie Radio Network CEO Robert Lowenthal (pictured above). The company’s main selling point is technology enabling radio broadcasters to automatically convert their live radio content into on-demand audio.
So here is how Spotify explains its rationale for buying Whooshkaa. It’s all about building on the capabilities Spotify acquired when it bought Megaphone in November 2020. Megaphone is a podcasting platform that helps podcast creators produce and monetize their content.
“We’re committed to continuing to help publishers worldwide grow their podcast businesses. That’s why today we’re announcing our acquisition of Whooshkaa, an Australia-based podcast technology platform that gives independent creators, publishers, broadcasters, and brands a cost-effective, end-to-end platform to host, distribute, monetize, and track on-demand audio. Whooshkaa offers radio broadcasters a specialized tool that makes it simple to turn their existing audio content into on-demand podcast content. As part of the acquisition, we plan to soon integrate this technology into the Megaphone suite.”
Already No. 1
Spotify made a very big splash in podcasting with its $100 million deal in May 2020 to secure exclusive rights to the Joe Rogan Experience. But even before this mega-deal, Spotify was busy driving toward one goal. Spotify is becoming a fully integrated podcasting platform. This includes content creation tools, audience, original content, and a monetization platform. And presumably, there is a bite of the apple at every step of the chain.
Already Spotify leads in podcast discovery. According to Buzzsprout, “As of November 2021, Spotify holds the number one spot with 31.2% of all podcast listeners (28,475,576 podcast downloads)—up from 25% in 2020.” The JRE deal no doubt had a lot to do with this growth. Apple Podcasts came in second with 31.1% of podcast users. Meanwhile, Google Podcasts followed landed in fourth place with just a 1.9% share.
One Brick at a Time
Let’s recap what Spotify has done to date to create its formidable podcasting platform.
February 2019. Spotify acquires Anchor and Gimlet and paid a reported $340 million for the two podcasting platforms combined. The two companies sat at different points on the podcasting value chain. So this is what Spotify said at the time of the acquisition. “Gimlet is one of the best content creators in the world, with unique, celebrated podcast shows like Homecoming, which was recently adapted into a critically acclaimed show on Amazon Prime, and the internet culture hit Reply All. And Anchor has completely reimagined the path to audio creation, enabling creation for the next generation of podcasters worldwide.”
November 2020. Spotify acquires podcasting platform Megaphone. Terms were not disclosed, but the deal is clearly an important milestone for Spotify’s podcasting ambitions. Megaphone provides hosting and ad-insertion capabilities for publishers and targeted ad sales for brand partners. The company appears to be the foundation for Spotify’s platform ambitions, as it intends to fold Whooshkaa’s capabilities into Megaphone.
February 2021. Spotify launches the Spotify Audience Network. This innovation basically stitches together Spotify’s acquisitions to date, notably Anchor and Megaphone, into a single marketplace. “The Spotify Audience Network is a first-of-its-kind audio advertising marketplace in which advertisers of all sizes will be able to connect with listeners consuming a broad range of content across Spotify Originals & Exclusives, podcasts from enterprise publishers via Megaphone, podcasts from emerging creators via Anchor, and ad-supported music,” the company said when it announced the Network.
July 2021. Spotify acquires podcast discovery platform Podz. “We believe that Podz’ technology will complement and accelerate Spotify’s focused efforts to drive discovery, deliver listeners the right content at the right time, and accelerate the growth of the category worldwide,” Spotify said at the time of the acquisition.
So What’s It All Mean?
All of these pieces add up to Spotify owning every link in the podcasting value chain. From creation through hosting, distribution, and monetization. Spotify’s investments seem to be more of a big bet on podcasting overtaking radio than a bet on any specific platform or content creator.
Spotify CEO Daniel Ek shared some insights into podcasting’s strategic importance in a blog post announcing the Anchor and Gimlet acquisitions. In short, owning the non-musical content piece is the key to the entire audio kingdom. Why? Well, it’s all about engagement. And also audience of course.
“Our podcast users spend almost twice the time on the platform, and spend even more time listening to music,” Ek wrote. “Based on radio industry data, we believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content. This means the potential to grow much faster with more original programming — and to differentiate Spotify by playing to what makes us unique — all with the goal of becoming the world’s number one audio platform.”
