Spotify tunes in to podcast popularity with two takeovers
Music streaming service Spotify is buying two podcast-focused companies as it aims to broaden its offering.
The US-listed company said the acquisition of Gimlet Media and Anchor would help accelerate its interests in the podcast market - seen by Spotify as an area of "incredible growth potential".
The value of the transactions was not disclosed though analysts, who see Spotify angling to become the 'Netflix (Xetra: 552484 - news) of audio', believe the total would have been no more than $500m (£386m).
The company's shares were over 4% down in afternoon trading on the New York Stock Exchange as investors digested the announcement.
Spotify, ranked by Forbes last year as the fourth-most popular streaming service globally, completed a direct market listing last year as it looked to fund growth and has a current market value of over $24bn (£18.5bn).
The company has been eyeing investments to widen its appeal among its 96 million paying customers - with podcasts seemingly fitting the bill.
Podcasts are audio recordings which subscribers can sign-up to and download - ranging from things like a topical discussion series to daily news programmes.
There are now hundreds of thousands of podcasts globally - with Apple (NasdaqGS: AAPL - news) 's iTunes service the market leader in terms of delivery.
Spotify is buying New York-based Gimlet as it has its own podcast studio with dedicated development, production and advertising capabilities.
Two-year old Anchor has a platform of tools for podcast creators and a growing user base.
Spotify founder and chief executive Daniel Ek said the deals meant it had become the second-biggest podcasting platform in a little less than two years.
"The format is really evolving and while podcasting is still a relatively small business today, I see incredible growth potential for the space and for Spotify in particular," he wrote.