Lord of The Ringer: Spotify acquires sports company The Ringer
March 9, 2020
1 min read
What's going on here?
Spotify has acquired The Ringer, Bill Simmons’ sports and pop culture company, for around $200m.
What does this mean?
The Ringer, a sports and pop culture website featuring over 30 podcasts, was founded in 2016 by ESPN sports journalist Bill Simmons. The acquisition follows Spotify’s £340m purchase of Gimlet Media, Anchor and Parcast. Spotify hopes to expand from streaming music to content, specifically podcasts. The acquisition came after Spotify announced better-than-expected growth in user count and said its investments into podcasts were helping convert people using its free tier into paying subscribers. As consumers’ listening habits shift, sports will play a key part of Spotify’s podcast expansion effort.
What's the big picture effect?
This signals how companies are responding to increasing competition in the music and podcasts industry. In 2019, Spotify reported a 29% rise in paid subscribers for its audio streaming services, giving it a significant lead over its main rival, Apple. Spotify has more paying subscribers than its main competitor Apple Music but because Apple’s podcast app is entrenched in all of its iOS devices, Spotify still has a long way to go. Therefore, the music streaming giant is hoping to make up for that difference by negotiating exclusive deals with content creators.
Spotify Chief Executive Daniel Ek stated that the engagement and loyalty of sports fans was a key reason for the acquisition. He said, “with the Ringer, we’re basically getting the new ESPN”. Loyal sports fans that engage with sports podcasts will facilitate Spotify’s push into the ever-growing podcast industry. Additionally, consumers that listen to both music and podcasts are more likely to be converted into paying subscribers to the service. With this acquisition, Apple should get nervous as its dominant position is slowly being threatened.
Report written by Robyn Ma
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