Why Does Apple Want Shazam?

The recent acquisition of Shazam by Apple for a relatively modest 400 million has left many wondering what the tech giant could want with the music identification service. Given that Apple has had similar infrastructure for some time, it seems the purchase was likely motivated more by interest in Shazam's historical user data.

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Guest post by Bobby Owsinski of Music 3.0

Apple recently confirmed that it acquired the audio recognition app Shazam for a cool $400 million. The price actually surprised analysts at how low it had fallen, given that the company was valued as high as $1 billion in the past. That said, Apple had to beat both Spotify and Snap in a bidding war to purchase the company.

While “Shazaming” has been seen as good for music discovery, speculation is that Apple didn’t care so much about that infrastructure (it’s been built into Siri since 2014). It was the historical user data that was most important in the purchase.

Think about it. Shazam is used more that 15 million times every day and that data is a look inside the listening habits of its users. It knows what’s hot and trending, what time most people listen, what they’re listening to or watching, and has used that information in the past to actually predict hits.

Now that Apple has acquired the company, it probably won’t be available to its competitors any longer. No problem, since there are actually a number of competitors in the field. Spotify bought a company called Sonalytic earlier in the year, but there’s still the independent companies like SoundHound, WhoSampled and WatZatSong, and the corporate owned Alexa and Google Assistant. Plus, several Asian streaming services have music recognition services already built into their platform, including Chinese services KuGou and QQ Music as well as Japanese services AWA and KKBOX. Sources say that Deezer is also working on incorporating audio recognition into its service as well.

Shazam’s big problem was that, even as market leader, it was unable to make money. The company tried to sell its data to the major record labels, but still couldn’t turn a profit. It’s well respected algorithm is cited over 650 times in Google Scholar, but that not enough to bring in enough cash.

Now that it’s under Apple’s corporate umbrella, it will be interesting to see what service takes over for the average person, or do they just ask Siri or Alexa for the name of that song.