Streaming music leader Spotify (NYSE:SPOT) is betting big on podcasts: It's acquiring sports and entertainment content creator The Ringer for an undisclosed sum.
It's the fourth podcast producer Spotify has bought in the past year, after reportedly spending between $400 million and $500 million in 2019 to acquire three other podcasting companies: Gimlet Media, Anchor FM, and Parcas.
Podcasting critical for future growth
Although it's primarily known as a music-streaming service, podcasts are becoming a growing part of Spotify's repertoire and it increases its exposure as a content creator. That has not been the case with music.
In a blog post on the Spotify website almost exactly one year ago, founder and CEO Daniel Elk said podcasting represents "the next phase of growth in audio," and noted the streaming site is the second-largest podcasting platform behind Apple.
Elk expects podcasts will eventually account for as much as 20% of Spotify's non-music content.
The streaming service just reported Wednesday morning that it had 271 million monthly active users, up 31% from last year, with more than 16% of them -- about 43 million -- engaging with its podcasts. The number of hours of podcasts consumed on the site in the fourth quarter tripled from the year-ago period.
The Ringer was founded by broadcaster Bill Simmons in 2016. It partnered with Spotify last September when The Ringer's Hottest Take short-form series was made exclusive to the tech company's platform.