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Home / Business / Spotify is in "advanced conversations" to buy Gimlet, at a price podcast industry has never seen before "Nieman Journalism Lab

Spotify is in "advanced conversations" to buy Gimlet, at a price podcast industry has never seen before "Nieman Journalism Lab



If I had a podcast, this is when I was going to drop an emergency track, because this is Kristaps Porzingis level.

Recode is Peter Kafka and the Wall Street Journal's Ben Mullin and Anne Steele, both kicked out the story Friday night that Spotify, the Swedish music streaming company, apparently is in "advanced calls" to acquire Gimlet Media. Both articles mention sources that are familiar with the case, and it is worth noting that the situation remains slightly fluid.

Recode's Peter Kafka had the story first (barely) and he has the potential award on the deal: "A person familiar with the proposed agreement says Spotify will pay more than $ 200 million in cash for the company."

I can Add it with a confirmation: A source familiar with the case tells me that the specific price is $ 230 million.

But the history of the Journal has an important detail that you should not miss: "There are still ongoing conversations and it is still possible that an agreement will not happen, the people said."

If you're looking for a benchmark, we can probably talk about the Scripps & # 39; 201

5 acquisition of Midroll Media (since rebranded as Stitcher) for $ 50 million, plus an additional $ 10 million based on milestone achievements. But, more appropriately, we had to talk about iHeartMedia, which bought Stuff Media for $ 55 million, which means better because it is a platform company that provides a targeted content firm that we see with this Spotify-Gimlet situation.

Which is to say: If this agreement closes, Spotife's Gimlet intake will be the biggest acquisition in the podcast industry to date.

(Oh, and if you keep track of: The venture-backed Gimlet Media has raised around $ 28.5 million in funding so far, from a pool of investors including WPP, Betaworks, Emerson Collective and Panoply's parents Graham Holdings. As Kafka points out, the company achieved a value of $ 70 million by 2017. You know what? Take a look at the Crunchbase listing.)

Also worth noting: This is Spotify's first purchase of content company.

Gimlet Media probably needs no introduction here, but just in case: It's the Brooklyn-based podcast company founded in 2014 by former This American Life employee and Planet Money co-founder Alex Blumberg and former WNYC producer / BCG consultant Matt Lieber. It is (a) responsible for shows like Startup, Reply All and Homecoming, and (b) has become the somewhat polarizing venture-backed poster child for the current wave of podcast industrialization.

Spotify, if you need to remind have stood up in podcasting their business quite a bit for a while now. In the pass and start, it has attempted to acquire a proper podcast presence within the platform in recent years. It first worked as a modest closed distributor before it evolved into the current iteration. An exclusive-driven strategy (mainly through talent is about people like Amy Schumer, Joe Budden and Jemele Hill, but screaming out to Dissect) built on top of a more traditional "open-ish" podcast distribution system. Last year, the company announced stronger podcasting intentions and revealed through a small press cap, that it has experimented with selling advertisements on its own podcasts since mid-2018, and is currently investigating the possibility of building its own advertising technology. I wrote about Spotify's podcast experiences and prospect under that press and raised lots of questions about how a Spotify podcast strategy would work.

I'm not gonna stretch my own horn here … oh, what the hell. Here's one point I traveled: "Given Spotify's content-led strategy, what are the odds that will drive up one or more podcast content companies in the near future? (If I was a player, I would probably take it.)" Gimme mine money.

I will also flag another point I traveled in that column, which I think will probably be an important piece in the coming days:

Spotify's two-sided podcast approach – direct curatorial unique visa values ​​and opening podcast posts – should recognized as known to the company. The move seems to be an inverted echo of an initiative that Spotify has tested on the music side: first, strikingly striking deals directly with independent artists (said to be relatively modest; "with tens or hundreds of thousands of dollars in prepayments, according to several people involved, "by The New York Times"), and then rolling out a new feature that allows independent artists to "upload songs and albums directly – without going through a single label company, distribution group, or Spotify employee – and automatically receiving royalty payments in the bank accounts, "as Rolling Stone described it. The latter feature, which appears to be an upgrade to the listener-intelligence-oriented Spotify for Artists program, is currently in only beta invitation.

Okay, so I will grind on this and deliver some more analysis in Tuesday's Hot Pod, but meanwhile a few quick thoughts:

  • This will almost certainly give a Standard talk about podcasting, the podcast industry, transparency, is this end of an era, so on and so forth. All that conversation is absolutely guaranteed, and I'm here for it.
  • Don't forget that Gimlet and Spotify have worked closely before and use a window arrangement around Crimetown Season 2 and Mogul.
  • Here is my gut: I can't help but feel there was some inevitability for Gimlet to be bought. Being a venture-backed company, entered into existence under pressure to realize a significant return for its investors – growth and conclusion were written into DNA, not independence. Combine this with the fact that Gimlet specializes in resource-intensive, often limited-term seasonal programming, and it doesn't feel like there were many ways for the company to develop a business model that is not super-risky. Now that it's going to be in a bigger unit with its own (mature-ish) business model, it can stand to continue doing what's good to do without the pressure to revolutionize the annual podcast business model alone.
  • On a separate note, I go back and forth to feel whether Spotify was the inevitable buyer. At the moment, Spotify seems to be the only buyer that makes sense given its priorities, its current purpose of podcasts and today's podcast experiences, but I can't think of other potential places that Gimlet could have ended in.
  • One thing to think about at: How does Gimlet's employees – who now vote well north of a hundred – integrate with Spotify? Who gets who leaves? How will the shows be within the company?
  • Will Gimlet's programming be exclusive to Spotify? (Probably, probably.)
  • Please don't hurt Answer All.
  • I hope they do a StartUp season about this. Come on now.

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