Spotify is buying two podcast companies after its first profitable quarter

Music streaming service Spotify has begun preparations to acquire Gimlet Media, an independent podcast producer, and Anchor, a podcast creation, publishing and monetization company. Spotify hopes that by adopting both companies, the streaming service will become the premier podcast producer, and the go-to platform for podcast creators looking to publish their work.

“These acquisitions will meaningfully accelerate our path to becoming the world’s leading audio platform, give users around the world access to the best podcast content, and improve the quality of our listening experience as well as enhance the Spotify brand,” said Daniel Ek, Spotify co-founder and CEO. “We are proud to welcome Gimlet and Anchor to the Spotify team, and we look forward to what we will accomplish together.”

For the advancement of podcast content, Spotify will gain access to Gimlet’s high-end podcast studio with progressive IP development, production and advertising capabilities. Anchor will bring a large and established creator base, as well as unique tools for those creators to use.

“Spotify is poised to become the largest audio platform in the world and we are excited for Gimlet’s award-winning podcasts to connect with new audiences around the world,” said Alex Blumberg and Matt Lieber, co-founders of Gimlet Media. “The medium of audio is uniquely great at creating human connection and understanding. We are thrilled that Gimlet is joining Spotify to do that at a global scale, on the platform and beyond.”

“We are incredibly excited to introduce Anchors industry-best podcasting tools to Spotifys massive user base as we continue our journey, now with even greater resources,” said Michael Mignano, CEO of Anchor. “We look forward to continuing to empower creators all over the world to build an audience, generate revenue, and most importantly, have their voices heard.”

The announcement comes simultaneously to Spotify’s release of its 2018 Q4 earnings report, revealing the company’s first ever operating profit. Spotify surpassed expectations and achieved a positive Operating income, Net income, and Free Cash Flow. Despite this, it fell short of revenue estimates and stocks slumped as a result.

Spotify revealed monthly active users grew 29 per cent year-over-year to 207m, and premium subscribers increased 36 per cent year-over-year to hit 96m. Although Spotify saw a large gross profit margin of 26.7 per cent in the fourth quarter, the company says it expects a gradual decrease in profit during the first half of 2019.