November 11th, 2020

Who Spotify And TikTok Merged With

This week's post is all about mergers and acquisitions, because two is always better than one.


Music streaming platform Spotify announced  the acquisition of podcast production company, Megaphone to Tuesday, with the aim of enhancing advertising deals for third party publishers. Justifying the 235 million USD deal, Spotify’s chief content and advertising business officer, Dawn Ostroff stated: “We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant.”  

To give you a quick explanation of who or what Megaphone is: Megaphone offers tools for podcasters to host audio, publish episodes and insert ads throughout the podcast itself. Additionally, it also assists podcasters with spending to better target ad reach, offering valueable insights to publishers. The acquisition streamlines the podcasting process, from upload to publishing. 

Through Megaphone, Spotify can also offer Streaming Ad Insertion to third party publishers, directly through Spotify, further monetising podcasting and advancing the podcast medium for publishers and advertisers. It also enables the streaming platform allows brands to advertise on Spotify exclusive podcasts, as well as giving insight on ad reach, listening frequency per user and detailed audience data. 

Why is this relevant? In recently published Q3 statements, Spotify revealed that 22% of users engage with podcasts every month, with the revenue on podcast advertising almost doubling year on year. With a portfolio of 1.9 Million podcasts currently available online, last year’s PodcastOne study revealed that 70% of podcast listeners that tune in to podcasts for more than 5 hours are inclined to buy a new product after hearing about it on a podcast of their choice. Our recommendation:  hop on the podcast advertising train, it’s an almost guaranteed route to success.


Last week, TikTok announced a licensing deal with Sony Music Entertainment, stepping up their game in regards to music usage. As many creators know, this has been a sticky subject in 2020, with Instagram music restrictions causing creator accounts to be temporarily blocked or videos to be taken down. This new advancement gives the TikTok community access to a large amount of musical hits, new releases and emerging artists, making music selection and content more unique and creative.

Additionally, this supports a broader range of artists by making their music widely available. TikTok has been known to be a platform for especially emerging artists, promoting their tracks and advertising new releases of unheard creators. 

However, this new deal only applies to individual creators. To avoid copywriting issues, big brands have restrictions set in place that prohibit them from using popular songs in their content. Instead, they have access to royalty free music from a commercial databased. To clear the air of confusion – although TikTok has no business accounts, it does have a system in place to identify profiles that are hosted by brands and will then place the above mentioned restriction on it.