Apple to buy recognition app in bid for music edge

Apple says it will buy leading song recognition app Shazam in a fresh bid to secure an edge in the intensifying battle of streaming services.

Apple, whose streaming service has rapidly grown but still has only half the paid subscribers of Spotify, said on Monday that Shazam had consistently been one of the most popular items on its App Store.

The two companies did not disclose financial terms. The technology news sites Recode and TechCrunch, quoting unnamed sources, both put the deal at about $400-million (R5.4-billion).

The market signalled its approval, with Apple share prices jumping 2%, well outpacing the 0.2% rise on the Dow Jones Industrial Average.

“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,” Apple said in a statement.

London-based Shazam said in a separate statement: “We can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”

Shazam, which was founded in 1999 in the early age of online music, has offered a solution to a longtime agony of listeners – putting a name to elusive songs. With a click, the app identifies tracks playing on the radio, at parties or as background music.

But Shazam has struggled to find a way to make money off its technology, even as it said it had reached one billion downloads on smartphones last year.

Shazam only recently announced it had become profitable, thanks to advertising and steering traffic to other sites such as Spotify and Apple Music.

The technology is also no longer quite as novel, with Shazam facing rivals such as SoundHound and with smartphones capable of ever more advanced recognition functions.

Mark Mulligan, who writes a popular blog on the music industry, described Shazam as cool tech without a business model, and said Apple was a rare player that could bring out the app’s value.

Apple, which revolutionised online music a generation earlier with iTunes, in 2015 launched Apple Music as the market turns to streaming, which offers unlimited on-demand listening.

Apple said in September the service had more than 30 million subscribers – a quick rise, but still trailing Spotify, which said it had 60 million paying users as of July and 80 million more on its free tier.

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