Audio service Spotify acquiring Bill Simmons' The Ringer

Lawrence Kim
February 5, 2020

"It's fantastic how Spotify jumped so far in front of the podcast market". Spotify will use assets from The Ringer to help build its sports profile, expand its primary presence to date in music.

The Ringer and its 90 employees unionized in August, and the union was recognized by management. No layoffs are planned with the deal. Other competitors include rival Pandora and venture capital-backed startups like Luminary that have also created their own libraries of exclusive content. The programs available on all podcast platforms will be available everywhere for the foreseeable future. The company spent about $400 million to acquire three podcast companies previous year, including buying New York-based Gimlet Media and L.A. -based Parcast, which are creating exclusive content for Spotify.

But with aggressive investments in both research and marketing the company also reported a net loss of €186m for 2019, more than double that of the year before when the company posted a loss of €78m. It comes as Spotify listeners flock to podcasts - more than 16 percent of its active users now engage with them, and the total number of hours streamed spiked almost 200 percent in the fourth quarter of last year compared to a year prior, the company said.

It later spent $56 million to acquire Parcast, a story-based podcast studio.

Rumors of the deal were first reported by The Wall Street Journal in January. After entering Q4 with 113 million paying listeners, Spotify said its 11 million new paying listeners marked its best quarter, in terms of total subscribers added, in its history.

Podcasts were expected to take in $514.5 million in ad dollars in 2019, up 28% from 2018, according to Interactive Advertising Bureau and PwC.

The company, which launched its music service over a decade ago, has invested over $500 million to build its podcast business and now has over 700,000 podcast titles. Its purchases of three studios a year ago totaled about $400 million, meaning the company had room financially to make more acquisitions within its initial investment commitment range.

Spotify is doubling down on its podcast strategy with a big acquisition to grow its sports coverage: It announced that it's buying The Ringer, the popular network of podcasts created and run by broadcaster Bill Simmons, with around 30 podcasts in its mix and approximately 100 million downloads per month.

"As we set out to expand our sports and entertainment offerings, we wanted a best-in-class editorial team", said Dawn Ostroff, Spotify's chief content officer in a statement.

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