The Ringer has become the latest podcast producer to be gobbled up by Spotify. The acquisition, which had first come to light two weeks ago, will bring more sports, entertainment and pop culture content to Spotify. The Ringer was founded by former ESPN commentator Bill Simmons in 2016 and it has a portfolio of more than 40 podcasts, including the popular “The Bill Simmons Podcast” which the company says now has more than 100 million downloads per month.
“We spent the last few years building a world-class sports and pop culture multimedia digital company and believe Spotify can take us to another level,” Simmons said in a statement. “We couldn’t be more excited to unlock Spotify’s power of scale and discovery, introduce The Ringer to a new global audience.” The two companies have already been working together, having teamed up last September to create the Spotify Original “The Hottest Take.”
Financial terms of the sale have not yet been released. The deal is expected to be completed by the end of first quarter.
Dawn Ostroff, Chief Content Officer at Spotify, said The Ringer will become a cornerstone in the company’s “global sports strategy.” She said that The Ringer’s track record of discovering and developing talent will make them a “formidable asset” for Spotify.
Sports has emerged as one of the hottest streaming trends. Last year iHeartMedia rolled out iHeartRadio Sports, a website that aggregates content from sports podcasts, nearly 200 local sports radio stations, content from the company’s syndicated Fox Sports Radio Network, and a long list of in-house personalities. Entercom did the same thing last August when it debuted the Radio.com Sports Digital Network with a mix of daily live sports talk programming and more than 75 hours of original podcast content weekly.
The Ringer Union and Writers Guild of America East, which was recognized by management in August, said in a joint statement that they “anticipate a productive relationship” with new Spotify management. “After weeks of public reports about a potential sale circulating without comment from our senior managers, we look forward to hearing from our senior managers about how this transaction will affect our day-to-day work. We expect management to meet promptly with the bargaining committee to discuss these matters,” they said in a statement.
It was a year ago that Spotify began its podcast expansion with deals to buy Gimlet Media, Anchor and Parcast. The result was that during the fourth quarter Spotify said more than 16% of its active users consume a podcast. And it had a 200% year-over-year growth in podcast hours streamed. CEO Daniel Ek positioned The Ringer acquisition as a “doubling down” on that strategy.
“It’s clearer than ever to us that podcast listening is driving overall health in our business,” Ek said on a conference call with analysts. “Podcast users are not only more engaged overall, but because of that engagement they also listen to more music – so it’s really a very healthy user trend that we’re seeing.”
Spotify also reported Wednesday that during the fourth quarter it had 271 million active users around the globe, including 124 million subscribers worldwide. That tally includes about 73 million users in North America of which 37 million are subscribers. The company said growth in North America was the fastest it has been since the fourth quarter of 2018.
Advertising sales was one of the weak points in the year-end report, as the company said it had a slow start to ad sales during the fourth quarter. “By December, momentum in bookings had returned to normal levels but wasn’t enough to compensate for the slower start to the quarter,” it said in a letter to shareholders. In the end ad revenue grew 23% compared to the prior year. And overall, Spotify said its total revenue rose 24% during the fourth quarter compared to a year earlier, to $2.05 billion.
“We’re very pleased with the momentum that we have entering 2020,” said Ek. The company told investors it expects to have between 328 and 348 million subscribers around the globe by the end of 2020, including 143 to 153 million subscribers. It did not release any predictions for the U.S. market.