$500 million dollars on podcasts?

Huda Khan, Author

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Spotify’s CEO, Daniel Ek, is now investing money in creating podcasts and making a way for radio listening available to Spotify listeners, because of concerns about “screen time.” According to investors, Spotify plans to spend about $400 to $500 million dollars on the new products. The point is to expand Spotify’s places of interest, hoping that it will attract new subscribers, as well as keep old ones.

According to CNN news, Daniel Ek claims that “with the world focused on trying to reduce screen time, it opens up a massive audio opportunity.” Spotify has been working on this expansion of audio for about two years; it started this initiative by first allowing podcasts listening opportunities and funding some original shows. It also tried to make a TV-style series. Spotify hopes that by doing do so they can make themselves a stronger platform for podcasts.

Gimlet Media, a five year old podcast studio, reportedly has been asked to be bought by Spotify for about $230 million dollars. The deal has been confirmed by Spotify, but they have assured that they won’t make existing Gimlet shows only for Spotify subscribers, however, Gimlet will be charged for making new shows. Spotify has also purchased the podcast Reply All, and a podcast publishing platform anchor.

Zach Fuller of MIDiA Research, said that Spotify was starting to become the “Netflix of audio.” Statistics show that audio advertising for radio broadcasters will now grow by 7.8% by 2022 and will be worth about $2.2 billion. In the United Kingdom, Canada, the United States, and Australia those who listen to podcasts, on average, fall between the ages of twenty and thirty-five.

According to CNN, Ek said “Ultimately, if we are successful, we will begin competing more broadly for time against all forms of entertainment and informational services, and not just music streaming services. We welcome that.”