Spotify is beefing up its podcasting capabilities with a new acquisition move. The streaming service is acquiring Megaphone, a podcast hosting company that provides ad-insertion capabilities.
As part of the deal, Spotify will open its proprietary ad insertion system called Streaming Ad Insertion to all podcasts currently hosted on Megaphone. The system was unveiled earlier this year with the goal of bringing more relevant ads to podcast listeners. While the technology works in the same way as other podcast ads, what sets it apart from the competition is the way it inserts ads in real time.
Spotify noted that the acquisition marks the first time its ad insertion tech becomes available to a third-party platform. Dawn Ostroff, Chief Content & Advertising Business Officer at Spotify, said in a statement:
“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.”
The financial terms of the transaction were not disclosed. With the addition of Megaphone, Spotify is expanding its podcast ecosystem including a number of exclusive shows. In July, the company also launched support for video podcasts and tested sharing podcast quotes on social media. The acquisition is awaiting regulatory approvals for now.