Spotify will acquire Reston-based podcast tech company Megaphone for $235M - Technical.ly DC

Growth

Nov. 12, 2020 9:35 am

Spotify will acquire Reston-based podcast tech company Megaphone for $235M

When the deal closes, this acquisition will give more podcast shows access to Spotify's flagship ad insertion technology.
Spotify is making (air)waves with its recent acquisitions.

Spotify is making (air)waves with its recent acquisitions.

(Photo by Flickr user Andrew Mager, used under a Creative Commons license)

Swedish-based audio streaming and media services provider Spotify has entered into an agreement to acquire Reston, Virginia-based Megaphone for $235 million.

Founded in 2015, Megaphone is a podcast technology company that helps publishers with hosting and ad insertion, as well as connecting advertisers to publishers. The company also has offices in New York, Chicago, San Francisco and Los Angeles and manages a team of more than 75 employees. Megaphone reports that it gets more than 1 billion annual downloads. The company is currently owed by Graham Holdings Company.

“Spotify will be a great home for Megaphone,” said Timothy O’Shaughnessy, president and CEO of Graham Holdings Company, in a statement. “I am proud of the Megaphone team and what they have built, and we look forward to their continued success.”

This deal won’t affect Spotify’s own podcasts since it already hosts its shows on Megaphone. Instead, this acquisition gives more shows access to Spotify’s flagship ad insertion technology, Streaming Ad Insertion, which inserts ads into shows in real-time based on the users listening, The Verge reports. This is the first time Spotify is making its proprietary tech available to third-party users. Ultimately, this acquisition aims to help podcast publishers earn more money from their work.

Spotify is acquiring Megaphone as part of its larger plans launched two years ago to invest more in audio, not just music. The company’s podcast portfolio includes more than 1.9 million titles and Spotify shared in its third quarter earnings that 22% of its total monthly average users engaged with podcasts and podcast advertising revenue is up nearly 100% year over year.

“As a podcast publisher, you’ll soon be able to offer more valuable podcast audiences to advertisers by allowing them the option to buy on a confirmed ad impression,” Spotify’s VP of Global Ad Business and Platform Jay Richman said during a Q&A published by Spotify. “And for our advertisers, we can now offer podcast audiences at even more scale.”

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Check out the full Q&A with Richman and Megaphone CEO Brendan Monaghan about their thoughts on how this acquisition deal can advance the podcast industry in the future.

Megaphone, which did not report any expected changes to its current staff as a result of the acquisition, is hiring for a few Reston-based and remote engineering roles, while Spotify is hiring for a plethora of tech roles around the world.

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