Apple close to buying music identification service Shazam, report says

Posted:
in General Discussion edited December 2017
Apple is reportedly in late stage talks to acquire Shazam, a popular content recognition and identification app that is currently rounding up investments as it moves toward an initial public offering.




Citing sources familiar with the matter, TechCrunch reports the deal is not finalized, but could be announced as soon as next Monday. One source puts the deal at nine figures, while another pegs it at around 300 million pounds ($401 million).

Shazam started life in the UK in 1999 as a product called 2580, named after the number users had to dial to reach the service via text. Since its debut on the iOS App Store, and subsequently Mac App Store, Shazam has evolved into a comprehensive audio fingerprinting service that allows users to identify songs, movies, TV shows and other media by capturing short audio segments.

As noted in today's report, the app reached one billion downloads in September 2016. Commonly a top-100 app on the App Store, Shazam's user numbers have almost certainly swelled in the interim.

In an interview earlier this year, Shazam CEO Rich Riley said the company could be an acquisition target for a larger company looking to get a leg up on competition. Riley said the company had shifted focus away from selling songs to advertising in a bid to reach profitability, a goal it achieved in 2016. In September, the company reported revenues of 40.3 million pounds for the 2016 fiscal year.

Called "Shazam for Brands," the firm's marketing vertical lets users discover new content by taking pictures certain real-world objects. For example, snapping a photo of a special Pepsi mini can unlocks exclusive content related to the hit TV show "Empire."

Other objects are made interactive through augmented reality. Limited edition bottles of Bombay Sapphire gin and boxes of Maltesers candy trigger specialized AR features. In the U.S., Shazam launched its first AR game experience, a 3D memory game, in a deal with Suntory's Hornitos and Sauza tequila brands.

Apple partnered with Shazam's brand marketing arm in 2015 to power an Apple Music ad campaign. Users who spotted a compatible Apple Music poster in the wild were able to scan the image, which would lead to an artist's Apple Music page.




Before the ad campaign, Apple integrated hooks into Shazam's audio service to enable music identification via Siri in iOS 8.

Currently, Shazam features integration with a number of music services, including iTunes and Apple Music. While iTunes hooks feature simple track purchasing options, Apple Music subscribers can use Shazam to quickly add identified songs and to a customized playlist.

If Apple does buy Shazam, and for the rumored price, it will represent the second largest acquisition made by the tech giant in recent years. Apple's purchase of Beats for $3 billion in 2014 still stands as the company's biggest single investment in an outside firm.

The reported $400 million price tag would be a significant discount compared to Shazam's most recent funding round, which valued the company at $1 billion. Since it began courting investments in 2002, Shazam has raised some $143 million from major investors, including record labels Sony and Universal.
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Comments

  • Reply 1 of 23
    I guess that wouldn't be the worst acquisition Apple could make.
    Avieshek
  • Reply 2 of 23
    For a child of the '70s, using Shazam is always a Jetsons moment for me.
    edited December 2017 equality72521watto_cobradoozydozenpscooter63Avieshekracerhomieapplepieguyclaire1
  • Reply 3 of 23
    rob53rob53 Posts: 3,239member
    Is it still a UK company? If so, will Apple use non-US funds to buy it? If so, then not a bad deal for $400M when compared to the ridiculous amounts being paid for other companies.
    watto_cobraAvieshek
  • Reply 4 of 23
    volcanvolcan Posts: 1,799member
    rob53 said:
    Is it still a UK company? If so, will Apple use non-US funds to buy it? If so, then not a bad deal for $400M when compared to the ridiculous amounts being paid for other companies.
    It is estimated there are 97 million released recorded songs. So about $4 per song. I don't know how much the licensing fees for the music is though.
    edited December 2017
  • Reply 5 of 23
    avon b7avon b7 Posts: 7,590member
    Shazam is a great little app. I don't use it much but it has rarely failed me and when you need it, it responds quickly. Much better than trying to remember something from the lyrics of a piece and searching for the song manually.

    I hope it stays independent.
    racerhomiebonobob
  • Reply 6 of 23
    I use it all the time through Siri

    "Hey Siri, who's playing".  …never fails me.
    watto_cobradoozydozenracerhomie
  • Reply 7 of 23
    Surprised Apple didn’t buy Shazam a long time ago.
    watto_cobradoozydozenmacxpress
  • Reply 8 of 23
    lukeilukei Posts: 379member
    volcan said:
    rob53 said:
    Is it still a UK company? If so, will Apple use non-US funds to buy it? If so, then not a bad deal for $400M when compared to the ridiculous amounts being paid for other companies.
    It is estimated there are 97 million released recorded songs. So about $4 per song. I don't know how much the licensing fees for the music is though.
    Shazam does not own any music content at all. It has a technology for identifying music and video content. 
    1STnTENDERBITSronn
  • Reply 9 of 23
    k2kwk2kw Posts: 2,075member
    I guess we now know why I he homePod is delayed.   They are buying their "musicologist"
    lostkiwiracerhomie
  • Reply 10 of 23
    k2kw said:
    I guess we now know why I he homePod is delayed.   They are buying their "musicologist"
    Nah Siri can already do have this now, just ask Siri what’s that song or something like that and Siri does it perfectly every time. It’s not a bad guess to think the back end services are what is delaying the HomePod. However what I’ve been hearing is that it’s more likely to be AirPlay 2 and working out how more than one HomePod will work together. 
    watto_cobra
  • Reply 11 of 23
    k2kw said:
    I guess we now know why I he homePod is delayed.   They are buying their "musicologist"
    This!
  • Reply 12 of 23
    volcanvolcan Posts: 1,799member
    lukei said:
    volcan said:
    rob53 said:
    Is it still a UK company? If so, will Apple use non-US funds to buy it? If so, then not a bad deal for $400M when compared to the ridiculous amounts being paid for other companies.
    It is estimated there are 97 million released recorded songs. So about $4 per song. I don't know how much the licensing fees for the music is though.
    Shazam does not own any music content at all. It has a technology for identifying music and video content. 
    I didn't mean to imply that they own any music. Obviously they don't stream any music. They have licensed the rights to digitize the wave forms so they can add them to their database to facilitate identification. They partner with music labels worldwide, however  I suspect that comes with ongoing licensing fees.
    claire1
  • Reply 13 of 23
    Make Siri Great Again!
  • Reply 14 of 23
    NY1822NY1822 Posts: 621member
    finally...!!!! i was hoping for this....i envision it being used for apple tv app...scanning movie clips to tell you what movie is playing, even have access to it on apple tv remote
    lostkiwironn
  • Reply 15 of 23
    lukeilukei Posts: 379member
    volcan said:
    lukei said:
    volcan said:
    rob53 said:
    Is it still a UK company? If so, will Apple use non-US funds to buy it? If so, then not a bad deal for $400M when compared to the ridiculous amounts being paid for other companies.
    It is estimated there are 97 million released recorded songs. So about $4 per song. I don't know how much the licensing fees for the music is though.
    Shazam does not own any music content at all. It has a technology for identifying music and video content. 
    I didn't mean to imply that they own any music. Obviously they don't stream any music. They have licensed the rights to digitize the wave forms so they can add them to their database to facilitate identification. They partner with music labels worldwide, however  I suspect that comes with ongoing licensing fees.Shazam doesn’t pay the labels. They see Shazam as  a way of driving new sales/streams 
  • Reply 16 of 23
    dr. xdr. x Posts: 282member
    How does Shazam compare with SoundHound? Based on what I read above, Shazam does music, and video and SoundHound I think does only music but correct me if I’m wrong. 
  • Reply 17 of 23
    chasmchasm Posts: 3,267member
    Seems like a good match that will make HomePod and other Apple devices even better. I've always like Shazam, but having just be part of Siri will be even better.
    watto_cobra
  • Reply 18 of 23
    k2kw said:
    I guess we now know why I he homePod is delayed.   They are buying their "musicologist"
    Actuslly, Siri is already relying today on Shazam to identify music. 
    lostkiwigatorguywatto_cobra
  • Reply 20 of 23
    17 years from founding to profitability (1999-2016).
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