Apple Acquires Shazam Song Recognition App

WILL APPLE PUT A WALL AROUND SHAZAM … AND SCREW IT UP?

Apple announced today, Monday December 11, 2017 that it has acquired Shazam, the remarkable app that lets users identify songs, movies, TV shows, and commercials from short audio clips. Rumors of the deal were first reported by TechCrunch last week.

The deal is worth $400 million, according to Recode. The acquisition cost falls short of the $1 billion value Shazam achieved during its last funding round. Shazam has had a hard time finding a viable business model, pulling in only $54 million in revenue in 2016. The British app is created and produced by Shazam Entertainment Ltd., which was founded in 1999. The actual prototype of the Shazam app began functioning in 2002 and was known as 2580, which was a shortcode that users dialed from cellphones. The cellphone listened to the phone to recognize it, and then hung up. The service then returned a text message with the song title and the artist name. Shazam for iPhone 2.0 debuted on July 10, 2008, with the launch of Apple’s App Store.

Apple announced that Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users. While Shazam, prior to the acquisition, is considered low revenue, it is profitable. In 2013 Shazam was one of the ten most popular apps in the world.

In October 2016, Shazam announced its mobile apps had been downloaded more than 1 billion times, and users had performed more than 30 billion “Shazams” since launch.

Apple announced that it was looking forward to continuing innovating and delivering “magic” for our users.

“We are thrilled that Shazam and its talented team will be joining Apple … Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users.”

The biggest worry is whether Apple might shut down the beloved app, and incorporate Shazam in a more cumbersome way in its own Apple Music app. An Android platform was announced in October 2008, connecting to Amazon’s MP3 store.

Despite low revenues, Shazam can still benefit Apple indirectly, but a shutdown of the app would hurt referrals to Spotify. Shazam is used about 20 million times a day around the world, and about 1 million referral per day would go to Apple and Spotify.

Shazam’s music and sound recognition, which is already integrated with Siri, might pick up a more efficient integration with Apple’s iOS, much like Google technology used for the song recognition feature on the Pixel, which appears automatically even on a locked screen, and functions offline.

Shazam uses a smartphone or computer’s built-in microphone to gather a brief sample of audio. Shazam creates an acoustic fingerprint (a time-frequency graph called a spectrogram) based on the sample and compares it against a central database for a match with over 11 million song possibilities. If Shazam finds a match, it sends information such as the artist, song title, and album back to the user. The response is associated with ad banners and referrals to other music services, such as Apple iTunes, Spotify, YouTube, or Groove Music.

Shazam is a free or low-cost application that runs on Android, Apple iOS, BlackBerry OS, and Windows systems.

Apple is also likely interested in video recognition with Shazam’s augmented reality technology, which could help improve its own offerings. Shazam has visual recognition tech and an AR platform for brands that could help in the development of a Google Lens-type feature, improving its ARKit projects.

Google Lens is an app that was announced at the Google I/O Conference May/June 2017. The app is designed to bringing up relevant information using visual analysis from a device camera.

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