(Bloomberg Businessweek) -- In February, Alex Blumberg and Matt Lieber sold their podcasting company to Spotify Technology SA for $230 million, the biggest deal yet in the industry.
More than 100 million people pay for Spotify, but the music subscription service is forecast to lose money this year because record companies collect the majority of every dollar it takes in. Podcasting is a way to attract new subscribers without paying royalties to the recording industry. Gimlet has a reputation for high-end production: It’s behind Reply All, a hit show about internet culture, and Crimetown, an exploration of urban crime; Homecoming, a fictional thriller about military veterans, was turned into an Amazon.com Inc. TV series starring Julia Roberts. Much as Netflix Inc. started making shows instead of licensing them from other studios, Spotify wants to own its hits and keep costs under control with Gimlet as an in-house studio.
To contact the author of this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net
To contact the editor responsible for this story: Bret Begun at bbegun@bloomberg.net, Max Chafkin
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