Do they make business sense?

One popular streaming service is betting, but not promising that they do.

Spotify wants to be known for more than just music.

Our goal is to be the largest global audio network.

It's investing big in a whole new area.

Podcasts From The New York Times I'm Michael Barbaro.

This is a daily I'm Steve Inskeep with Noel King, and this is up first from NPR News people associate Spotify with music, So why move into podcasts?

You can't deny that podcast has now become a very important factor in peoples audio experience.

The idea is for us to have a seamless platform across music and podcasts.

The streaming giant bought gimlet media anchor and Park cast three popular podcast companies for nearly $400 million.

Ah, large price tag.

Considering the entire podcasting industries, ad revenue was less than half a billion dollars in 2018, but the podcast industry is young and growing fast.

We recently announced something new for iTunes and iPod, and it's called Podcasting has been described a lot of different ways.

One way has been, uh, Tebow for Radio Apple.

Had you guys be a little bit in terms of the timeline they got into podcast in 2005, and as a result, most people go to Apple.

So how are you guys gonna change that?

It's only been about two years, and we're already seeing 10% of our user base.

Listening to podcasts were also very much dedicated to creating an atmosphere where creators, producers, writers want to be here exclusively, and so being able to offer an experience where they can not only make podcasts get the data and insights that they need and then, in addition to that exposed their podcast globally to a much larger audience is going to be a big game changer for us.

Season four of Startup is almost here, and we're starting off with some episodes about the company that makes this podcast gimlet.

Media Alex Bloomberg co founded Gimlet and spent four years building it into one of the most popular podcast studios, launching hit Siri's like homecoming reply all and heavyweight.

When Spotify first approached him, he was nervous.

It's a heavy thing to sort of like build a business and then sort of like hand over the reins.

Ultimately, it was the access to Spotify is resource is that sealed the deal for him.

We just have so much more understanding of our audience and how they consume podcasts in the old world.

People download the podcast and then you don't know what happens to it.

You don't know when they listen to it, how much they listen to if they even listen to it, and you don't know what else they've listened to.

You don't know what their habits are.

You can't sort of make any sort of assumptions about like, Well, if they listen to this, then they'll also listen to the thing that we're making.

You're just blind and so as part of Spotify because it's this platform of of users you can sort of see, like this group listens to this this music and they like this kind of podcast.

That's one of the biggest advantages.

For now.

Spotify Eyes Bet seems to be paying off.

Podcast listeners spend nearly twice as much time on the platform than just music listeners.

Eventually, the company expects 20% of all listening on the platform to be something other than music.

Our product teams have been working tirelessly to be able to deliver personalization to users on the podcast side, the same way we dio on the music side.

Even Spotify says it can't guarantee it will make a profit from podcasting.

But for Ostrov, it's all about betting on the future.

The younger generation has really taken to it, and I always say where the young people go, the older people follow.