Apple Buys Shazam For $400M

Apple has acquired the UK music recognition app Shazam for $400 million.  

Apple Music 2016 – Apple Music 2016

Shazam has been integrated with Apple’s voice recognition service Siri since 2014, allowing iOS users to ask their device about the origin of any given song.

Acquiring the entire service means a couple of things: Shazam won’t be directing its users to competing streaming services such as Google Play or Spotify any longer, and Apple will be able to learn a lot more about people’s listening habits, allowing the company to improve the recommendation and curation features of its own streaming offer Apple Music.

Both will help Apple close the gap on its biggest competitor in subscription streaming, Spotify. While Apple Music claims to have 30 million people subscribing to its paid-only service, Spotify’s most recent numbers show 60 million paying subscribers out of 140 million overall users. Spotify acquired its own music identification and discovery technology earlier this year in the form of Sonalytic, a UK company like Shazam.

What is more, Apple has been taking on somewhat of a major label role by signing exclusive multimedia deals with certain artists for certain releases, including Drake, Frank Ocean and Chance The Rapper.

In case the company plans to continue on that path, the integration of Shazam will help it spot musical trends and buzzing artists early in their career. Should Apple indeed plan on finding and building new talent from scratch, it will have taken on another function traditionally associated with a label. Apple said that, since the App Store launched in 2008, “Shazam has consistently ranked as one of the most popular apps for iOS.

Today, it’s used by hundreds of millions of people around the world, across multiple platforms.” According to Bloomberg, Shazam had 175 million monthly active users globally across iOS and Android in November, with the U.S. being its largest single market, “with about 20m active users in November, while the U.K. had about 4m in the same month.”

Besides the main Shazam service of identifying music heard on the radio or through other platforms, Shazam also provides the Artists on Shazam service which lets you know what popular artists are “Shazaming”  Shazam Charts, and Shazam For Brands, which allows you to interact with branded physical products from partners like Coca Cola and Maltesers in various ways.

“Apple Music and Shazam are a natural fit,” the Apple statement continues, “sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

A Shazam statement reads: “We can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”

Spotify may not be the only competitor Apple needs to worry about, should YouTube manage to successfully launch its own paid-for subscription service Remix, announced last week.

Google’s video platform has by far the biggest user base, 1.5bn per month as of June. The big challenge, however, will be convincing even a fraction of those users to pay.