What's going on?

Audio streaming service Spotify on Wednesday announced it was buying two major podcast companies: Gimlet Media and Anchor.

What does this mean?

Spotify thinks that over 20% of what�s streamed on its platform will eventually be non-music, and so it�s splashing the cash now to ramp up its original content � � la Netflix. Spotify�s investors will hope that this beefs it up compared to other surging streamers, particularly Apple Music.


Some reports suggest Spotify paid more than $200 million for its new toys, but the company�s keeping quiet. However much it�s paying, Spotify can choose to pay in cold, hard cash, or instead offer an equivalent sum in its stock � an option made easier by being a public company. A share of Spotify�s currently worth around $130, and the company might prefer handing over a bunch of these to dipping into its (relatively) skinny $1 billion bank balance.

Why should I care?

For markets: A reprieve for media stocks.

While Spotify�s stock fell 5% on Wednesday � likely reflecting investors� typical fretting over whether an acquisition successfully works out and helps grow profits � the company�s new groove could coincide with renewed investor interest in media stocks (tweet this). While several new(ish) media companies are downsizing, Snapchat owner Snap Inc. reported narrower-than-expected losses late on Tuesday that sent its stock up 26% on Wednesday. Meanwhile, old-timers Disney and the New York Times� surprisingly strong broadcasting and subscriber growth led investors to buy up their shares on Wednesday, too.

Zooming out: Slack is typing�

Earlier this week, workplace messaging tool Slack � a decade-old startup perhaps best known for its use among other startups � filed paperwork for a 2019 stock market listing. It�s likely to follow the approach Spotify took back in April 2018 � largely shunning investment banks� assistance in favor of a �direct listing�. That�ll save it money on fees, but risks big swings in its stock price. Such volatility could make using its own stock for any future acquisitions challenging.