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 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’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.