Why Spotify Is Buying Megaphone For $235 Million

By Annie Baker ● November 12, 2020
  • Music streaming service Spotify Technology S.A. (NYSE:SPOT) recently announced it entered into a definitive agreement to buy Megaphone. These are the details.

Music streaming service Spotify Technology S.A. (NYSE:SPOT) recently announced it entered into a definitive agreement to buy Megaphone, which is one of the world’s most innovative podcast advertising and publishing platforms. The deal is reportedly valued at $235 million. Megaphone was originally founded by The Slate Group in 2015, an online news site owned by Graham Holdings.

Going forward, Spotify and Megaphone will be able to help advertisers and podcast publishers realize the full potential of podcasts. And the two companies will achieve this through the power of the Megaphone Targeted Marketplace and by making Streaming Ad Insertion available to third-party podcast publishers.

Through this acquisition, Spotify will continue to deliver against its goal to become the world’s leading audio platform while focusing on growing audio monetization across the industry. And the acquisition follows Spotify’s launch of Streaming Ad Insertion — an innovative podcast ad technology that delivers the quality of traditional podcast ads with the precision and transparency of modern day digital marketing.

Now Advertisers will be able to activate across Spotify’s Original & Exclusive podcasts while scaling reach through the Megaphone Targeted Marketplace. And for podcast publishers, the acquisition will unlock innovative tools that will help them earn more from their work. This includes the opportunity to opt-in to have their content monetized, thus matching their listeners with even greater demand from advertisers.

Once the deal closes, Spotify will soon make Streaming Ad Insertion available to all podcast publishers on Megaphone, the first time this technology will be made available to third-parties. With Streaming Ad Insertion, podcast publishers will be able to offer more valuable podcast audiences to advertisers based on confirmed ad impressions.

KEY QUOTES:

“We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant. We look forward to Megaphone joining Spotify on our mission to accelerate smarter podcast monetization for advertisers and podcast publishers powered by a scaled audience and state-of-the-art technology.”

— Dawn Ostroff, Chief Content & Advertising Business Officer, Spotify

“We are incredibly excited to join Spotify to help advance the podcast medium for publishers and advertisers alike. We believe that Megaphone and Spotify’s shared value in innovation will drive the podcast ecosystem forward around the world.”

— Brendan Monaghan, CEO, Megaphone