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Media Spotify Podcast

Spotify's third podcast acquisition in Parcast promises more engaged ad audiences


By John McCarthy | Opinion editor

March 28, 2019 | 4 min read

Music streaming giant Spotify has made its third podcast network acquisition in the space of two months, indicating how heavily it is to lean on the medium. Its new push into the space is expected to take its paid subscribers past the 100m barrier and could help populate it with inventory free users are less likely to skip.


Spotify secures third podcasting company in Parcast

For an undisclosed fee, Spotify this week snapped up crime, mystery and sci-fi producer Parcast, following its acquisition of Gimlet and Anchor, podcast creation tools, last month. It claimed the company’s foothold in “a top genre” made it a worthwhile purchase.

Music Business Worldwide suggested that Spotify put out $230m for Gimlet which produces StartUp, Reply All, Homecoming and Mogul podcasts. With Anchor on the slate, its expense reportedly rose to $300m.

At the time, Daniel Ek, Spotify co-founder and chief executive, said it was to set to “become both the premier producer of podcasts and the leading platform for podcast creators”.

Now Parcast has come aboard, along with its line of shows which includes Serial Killers, Unsolved Murders, Cults and Conspiracy Theories and the studio’s first fiction series, Mind’s Eye.

Dawn Ostroff, Spotify chief content officer said: “The addition of Parcast to our growing roster of podcast content will advance our goal of becoming the world’s leading audio platform.”

Max Cutler, founder and president of Parcast noted that the firm has “hit a chord with mystery and true-crime fans, especially women”.

Jonathan Harrison, digital lead at independent media agency The7Stars explored how the acquisitions could super-charge Spotify's advertising offering.

He told The Drum: "It’s no wonder Spotify is attempting to open up the audio advertising model to the spoken word, especially with Ofcom reporting that weekly listeners of podcasts has almost doubled in five years. Much of what makes podcast inventory great is in direct opposition with the difficulties of digital media. Podcast advertising taps into an engaged audience who are focusing often on a single medium. Unlike social media or online video, sound is on, a user isn’t trying to watch other content at the same time and the hands-free nature negates any possibility to skip.”

He said that advertisers will be able to “cherry-pick” online, mobile-first audiences on the platform while also taking into account dynamic signals like time of day and listener location.

“There has also been a focus more recently for advertisers to integrate seamlessly into the content by having the talent themselves record the ads. This approach has unfortunately fallen into the digital approach of old, where marketers want all digital inventory to me measured on a CPA or traffic basis.”

More broadly he warned: “Rather than treating podcasts as an awareness channel, we now can’t listen to a popular podcast without hearing an advert for a subscription or offer with a unique code to enter online. Although this may offer some numbers, it clearly underestimates the effect of podcast advertising and feels more in tune with ripping big mac vouchers out of the newspaper than an intelligent and attributable measure of effectiveness.”

He urged Spotify to follow rival podcaster Acast’s lead and invest in new talent and keep up with the growing demand for more interesting content.

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