#Spotify to Buy Podcast Hosting Company Megaphone for $235 Million

Spotify has announced plans to acquire podcast hosting company Megaphone for $235 million, bringing a host of new tools to advertisers and podcast makers. The deal will allow Megaphone-hosted podcasts—from publishers including ESPN, Slate, and The Wall Street Journal—to access Spotify’s streaming ad insertion technology (SAI), which swaps traditional podcast ads for real-time selections targeted at the listener, based on their data.

Spotify said in its announcement that, in the third quarter of 2020, it had 320 million monthly active users, 22 percent of whom engaged with podcasts on the platform. Megaphone’s chief executive Brendan Monaghan said: “We believe that Megaphone and Spotify’s shared value in innovation will drive the podcast ecosystem forward around the world.”

The acquisition follows Spotify’s splash into the podcast market in 2019, when it bought Gimlet and Anchor for a reported total of $340 million. The company’s big spending on podcasts by personalities such as Joe Rogan (who reportedly drew more than $100 million for a multi-year deal) has attracted criticism from artists still fighting for fair compensation from the company. Unionized music industry workers and artists recently launched “Justice at Spotify,” a campaign to “collectively take resources and power from the few wealthy companies that dictate our industry.” Last week, Spotify announced that it would begin trialing a new feature called Discovery Mode, which boosts songs on select algorithmic playlists in exchange for a lower, “promotional” royalty rate.

Spotify staff recently brought concerns to the company over Rogan’s show with conspiracy theorist Alex Jones, who promoted fringe views on coronavirus prevention. (Rogan fact-checked some claims during the show.) In September, the host was forced to apologize for mischaracterizing Black Lives Matter protestors in Portland.

Read “How Musicians Are Fighting for Streaming Pay During the Pandemic” and, on the Pitch, “This Is How Much More Money Artists Earn From Bandcamp Compared to Streaming Services.”