Spotify + Gimlet/Anchor Quick Take + Worldwide Meetup Details!

**Ben Gilbert** (0:00)
Hey, Acquired listeners. We are here with you today for two reasons. First, to remind everyone about our worldwide virtual meetup. So this Thursday, February 21st, we will all be getting together on the internet to celebrate Acquired passing the million download milestone, which at this point was like a couple months ago, but you know, it takes us a while to plan things. It'll be at 5:30 p.m. Pacific time, which is 8:30 p.m. Eastern time in the United States. We will be doing it on Zoom. So we're pushing the boundaries of the medium here and figuring out what it looks like when we all pile into Zoom. And we are structuring it as a Q&A with folks. So the Zoom link is available in the show notes. And if you want to send us a question or upvote somebody else's question, which is very fancy, you can ask it in the Slack, thanks to a very cool Slack bot that David has set up.

**David Rosenthal** (0:49)
Yeah, called Slido. And we're gonna have a, there's a channel live in the Slack right now called Meetups. So head over there to ask questions.

**Ben Gilbert** (0:57)
Indeed. All right, David, so the second reason for this episode, over to you.

**David Rosenthal** (1:02)
Yes, the second reason is in true acquired experimental fashion here. We keep getting a whole bunch of requests in Slack and elsewhere for our take on things, like the Qualtrics acquisition last year, for the topic of today, Spotify's acquisition of Gimlet and Anchor. But the problem is we can't do like a full acquired treatment for all these companies all at once. We keep wanting to share our thoughts.

**Ben Gilbert** (1:29)
It would kill David to spend that much time at the library.

**David Rosenthal** (1:33)
Indeed, the San Francisco Public Library is already public enemy number one here. So, we're going to experiment today with doing more of a quick take on some really relevant acquisitions to us in the podcasting space, talking about Spotify's purchase of Gimlet Media and Acquired. So, how are we going to do this? There is sadly going to be no history and facts here. We'll just discuss very briefly. But we do have a bunch of thoughts we want to share and put out there and get your guys' feedback. So...

**Ben Gilbert** (2:09)
Yeah, and we should also say this does not preclude ever doing a future episode. This just sort of gives us an outlet to be able to share quick thoughts. And then, as you guys know, we like to wait five plus years after acquisitions happen so that we can kind of have history as our guidepost to decide if something was really something we can grade, if it was a good acquisition or not. So know that this doesn't preclude us from doing it in the future, but it is a little extra outlet for us. So David, should we hit the facts of the acquisition first?

**David Rosenthal** (2:39)
Yeah. So facts are, last week, the podcasting world changed. Spotify not only acquired Gimlet Media for now, I think we, as of today, know the numbers. They paid about $230 million for Gimlet, I believe, maybe slightly less, and also acquired Anchor for just over $100 million. And then pledged that they were going to spend several hundred million more this year in 2019 in podcast acquisitions.

**Ben Gilbert** (3:10)
Boom. In one day, podcasting went from an uninvestable category that has not achieved venture scale to suddenly having a guaranteed $500 million worth of exits this year. Things can sure change on a dime, or as David has said in multiple episodes, on a knife point.

**David Rosenthal** (3:30)
On a knife point, yes. The podcasting world turned on a knife point. Yeah, I think there's lots of people have, of course, had their takes on this, many of which I agree on. Ben Thompson wrote a great piece in his weekly piece, Exponent. Ben and James also covered it well. It's funny, I've been doing a whole kind of mapping out of the podcasting space as lots of other people have. What's interesting to me is I think the focus is so much on content here. I think the analogy really is Netflix. And what I mean by that is like on the one hand, Spotify just paid, I'm talking about the Gimlet piece of this. Spotify just paid over 200 million dollars for a podcast media content company that makes just over 20 podcasts. And the whole advertising monetization of the whole podcasting space last year was like 300 million, I think.

**Ben Gilbert** (4:27)
Around there, yeah.

**David Rosenthal** (4:28)
So why does that make any sense is the question. This is where I think the Netflix analogy comes in. Spotify's business model is very different from anybody else in the podcasting space. Their business model is they get consumers to pay them 10 dollars a month. Obviously, that's primarily for music, but also podcasts. The money that Spotify can spend on content, if it drives more people to pay them 10 dollars a month and a large portion of their user base listens to that content, whether it's Gimlet or other content they'll acquire in the future, and we can talk about Anchor here, that is on a marginal per subscriber basis, very low and much lower than basically anybody else could pay in the space.