Spotify buys megaphone worth $ 235 million to monetize podcasts

The Swedish company Spotify has agreed to buy the podcast advertising and publishing platform Megaphone. This is the latest in a series of deals to improve its podcast platform.

The deal is valued at $ 235 million (roughly Rs 1,700), a Spotify spokesman said.

The company will use Megaphone’s technology to create targeted advertisements and also make its proprietary advertisement monitoring tools available to third-party podcast publishers.

Spotify, which generates revenue from paid subscriptions and the distribution of ads to non-paying users, saw its advertising business grow again in the third quarter following the pandemic earlier this year.

Executives have announced that ad growth will accelerate in the current quarter.

Investing heavily in podcasts to become the Netflix for audio content has helped fuel subscriber growth at a time when many people are living in their home country due to the coronavirus outbreak.

Since last year, Spotify has spent hundreds of millions of dollars buying companies like Gimlet Media, a podcast producer, and Ringer, the sports and entertainment podcast network founded by sports writer Bill Simmons.

The company said the new technology will help podcast publishers get more from their jobs.

“We are still in the first few chapters of the history of the streaming audio industry, but it is very clear that the potential is significant,” said Dawn Ostroff, Spotify’s chief content and advertising business officer.

Spotify now has 1.9 million podcasts, up from 1.5 million in the second quarter backed by major product launches like the Michelle Obama podcast and Mama Knows Best by influencer Addison Rae.

© Thomson Reuters 2020

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