Last week, it was reported that Apple acquired Shazam, a music and image recognition service based London. Recently, the company confirmed the news. The acquisition is part of the company’s bigger goals in the music industry. The music service is one of the earlier players in mobile music.
Since its launch on App Store, the app remains the most popular app on for iOS. It has millions of users around the world, and it is used on multiple platforms. Shazam and Apple Music have the same goal, i.e., they allow users to discover music and deliver music experiences.
How much is the acquisition?
Apple failed to disclose the value, but some people are saying that the deal was in the range of $400 million. Furthermore, sources said that the company had been in the works for five months. But Apple was not the only company that expressed interest. Snapchat and Spotify were just two of the many companies that wanted to acquire the app.
However, Apple did not reveal the details about its plans on how to use the app. There are various ways that Shazam’s business would overlap with Apple’s. In that case, it offers a range of possibilities for how the two brands will work together.
The core business of Shazam is music recognition. You can use it to capture a clip of music that is currently playing. Then, the app matches it against its database to tell you the title of the song and other details. With its many features, it accumulated over a billion downloads.
Over the years, the company added some services. For example, it sends users to other sites where they can download and listen to the music. It also provides more details to users about the music. Plus, it gives users popular music based on the clip that they listen to.
Then, it branched into other marketing services. Users can now capture snaps of images, and the app will give them more content from a brand.
Shazam partnered with Apple and Spotify. It also formed a partnership with Snapchat, which integrates with the app so that Snapchat users can recognize music while engaging with Shazam content.
The app had a post-money valuation of over $1 billion, which is a far cry from the estimated $400 million that Apple paid. But Shazam does not have a robust business model to give it a long-term success.
Experts said that the app should have considered moving into the streaming music industry. That’s why the deal with Apple makes a lot of sense. Spotify has a steady recurring revenue from its subscription service. Apple Music, on the other hand, has subscriptions and downloads.
Both companies have a friendly relationship for many years. However, Snap was also bidding to buy the company. Snap was open to the idea of acquiring Shazam because its music recognition feature is going well with the social media network.
Unfortunately, Snap’s volatile stock market gives Shazam mixed messages about how much the platform could pay.