For Spotify, becoming the world’s leading podcast company is crucial within your strategy set for the next few years. In recent months it has launched numerous new features in this regard: it has renewed the podcast section, it has launched video podcasts, it has improved the recommendation algorithm … among other actions.
Spotify has paid 235 million dollars to acquire Megaphone
Podcasts have become a very profitable product for Spotify, a source of income because they can include advertising. Now, in case there was any doubt that the podcast is his priority, he is taking one more step at the stroke of a checkbook: the acquisition of the hosting company for podcasts Megaphone.
According to sources close to the negotiation, Spotify would have paid 235 million dollars by Megaphone. Users will be able to continue uploading their podcasts to Megaphone and Spotify indistinctly, as there will be no merger of the two services. So … why is Spotify interested in the acquisition? Because of the advertising business it involves.
Thanks to the agreement, more podcasts will be able to use the Spotify ad insertion technology, which allows advertising to be included in podcasts in real time, based on content and listeners. Thus, Spotify’s technology is capable of showing different ads to the same audience, depending on the objectives of the campaign and the variables of each individual.
The acquisition assumes that more than 5,500 podcasts included in Megaphone may include advertising using Spotify technology to serve ads more appropriate to each listener. Also, because it is a technology that no other podcasting company offers, advertisers will have to pay Megaphone if they want their campaigns to reach audiences more efficiently.
For Spotify, the purchase means that, in addition to offering hosting for podcasts, it can use its advertising network for more content, and it also acquires all of Megaphone’s sales team and sales force.