Apple to Buy Shazam

There’s an interesting rumor going around that Apple is going to buy Shazam for about $400M…

shazam

Apple announced the acquisition of Shazam in a statement to Buzzfeed News, on 2017-12-11. In their statement, Apple acknowledged that Shazam was one of the most popular apps available for download in the iOS and Mac App Stores; and has hundreds of millions of users, on multiple platforms, worldwide.

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

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. This would be an interesting development, as the popular music recognition app is currently cross platform.

Shazam has been integrated into Apple’s iOS since June of 2014 when it released iOS 8. While the deal between the two organizations is NOT finalized, its anticipated that the deal, worth approximately $400M USD could be announced as early as Monday, 2017-12-11.

Originally called 2580, named after the number users had to dial to reach the service via text, the UK company came into existence in 1999. The app is now in both the iOS and Mac App Stores and has turned into a comprehensive audio discovery and identification service helping users identify songs, movies and TV shows by capturing audio. The app has been downloaded over 1 billion times.

Apple partnered with Shazam’s marketing team in 2015 to help power their Apple Music app. This is likely where they will permanently put the app, should they in fact come to an agreement to purchase the technology.

According to Shazam’s CEO, Rich Riley, the company reported revenues of £40.3M pounds for their 2016 fiscal year. Riley indicated that their marketing shift to advertising is what helped make them profitable and helped them become an acquisition target.

Shazam is integrated into iTunes and Apple Music, and has hooks into the iTunes Store. On the Android side, it also has hooks into Google Play. iTunes users can quickly purchase recognized songs. Apple Music users can quickly add identified songs to a customized playlist.

If purchased, Shazam would be Apple’s second largest acquisition in recent years. Apple purchased Beats for $3B USD in 2014. The Shazam purchase, however, at $400M, is likely to be a 60% discount over the organization’s most recent funding round, which valued the company and service at approximately $1B USD. Shazam has raised over $143M in funding since 2002, including monies obtained through Sony Music and Universal.

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Am I a Relic from the Distant (Music) Past? – Streaming vs. On Device Music

…And by distant past I mean, like Steve Jobs time frame… or just 15 years ago.

I’m an Amazon Prime Member. For this service, I, like everyone else who subscribes to this service, get unlimited, free, 2-day shipping on all of my Amazon, physical goods, purchases and all of the digital video my internet services (both at home and mobile) will allow me to stream.

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A little while ago, I got an email promo for Amazon Music Unlimited. It’s an on-demand, ad-free, music streaming service offered by Amazon (obviously) that streams music from their vast, digital music catalog. It comes with personalized recommendations, curated playlists and curated stations. It also has Prime Member exclusive pricing of $7.99 USD per month (non-Prime members can get the service for $9.99 per month). You can also get an Alexa only version for only $3.99 a month. That last deal should be especially interesting to folks who mainly listen to music only through their Amazon Echo.

Amazon is really stretching the offerings here. They’ve given users a number of different ways to get access to their vast catalog and are offering unlimited streaming without any ads. The extra $4 bucks a month for access to ALL of their music seems to be a huge no-brainer, especially if you have an Amazon Echo in the house. You can listen to anything and everything as many times as you wish, and Alexa will serve it up – again, ad free – all at the asking. I’m not certain exactly how vast their catalog is, but it has to be pretty big, right?

With this new offering, it appears as though Amazon is doing the best it can to make the best of Prime’s position. Their audience is big, and they have a lot of other services that they’d like to sell…

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Conversely, my daughter – and a whole bunch of other folks – subscribe to Apple Music. Apple Music works on every iDevice in sight, and once you subscribe on one, the service is available on every iDevice that uses your AppleID. At $10 per month for their service, it’s a similar offering to Prime’s in that you get access to everything, without any ads. I think the best thing here, is that their trial period is three months long.

The cool thing with Apple Music is that it provides purchase links to everything you hear, interfaces with Apple Pay (at least on your device) so buying something that you hear and really like is super easy… much easier I think than any other service offering available today.

UPDATE: Potential new pricing information has come to light from Neowin while I have been writing and researching this article. It is currently rumored that Apple is seriously considering a price drop on Apple Music in order to be more competitive with Amazon’s Prime Music. The new rumored price points are said to be:

  • Regular rate: $7.99 per month, down from $9.99
  • Family package: $12.99 per month, down from $14.99
  • Student rate: $4.99, remains unchanged

The decision looks like a tough one for Apple, it’s expected that if it does slash the price of its Apple Music, it will have to directly pay the difference to the record labels. Digital Music News claims that Amazon is already forking over money to the music labels to offer its own low prices on Amazon Music.

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Google Music is much like Prime Music in that it offers a way for you to easily upload and stream all of the music you already own – up to 50,000 songs – as well as stream new music from their service. You get to stream all of YOUR music for free. With Google Play, you get a 30 day trial and after that, the service costs $10 bucks a month.

The cool thing about Google Music is that you get to stream your own music regardless of whether or not you subscribe. The software and service work on iOS, Android, and on macOS or Windows, via a web browser. You can download anything you hear, your music or the services, and listen to it either online or offline. The service has up to 35 million different tracks, too.

Unfortunately, Google Music doesn’t offer any kind of student or family plan. With Google Music, it’s one size fits all. So, you get everything for free for 30 days, and then its $10 bucks a month.

You know… I’ve been chewing on this article for about two months. I’ve talked to a lot of people about the whole streaming craze. Me…? I get it; but I don’t get it. Traditional radio is on the outs. Kids… millennials… don’t listen to it. I’m not certain why, but they’re not. Maybe it’s the mix… the music that’s being played. Maybe the kids don’t like being dependent on the DJ or the station and all of its advertising influenced playlists. Maybe they like having more control over the content that actually plays and streams; and when you subscribe you get ad free music – so no commercials or DJ’s stopping to promote this that or the other thing – and you get both curated playlists AND the ability to skip as many songs as you don’t like (depending on the service).

Here’re the issues that I have with all of this:

  1. You Gotta Pay for the Service
    Traditional radio is free. And while I get that while most smartphones can play FM broadcasts, they DON’T include an FM radio app. Most kids carry their smartphone. They don’t carry a portable radio these days, and without the ability to actually PLAY live, traditional radio, it’s clearly OUT of the picture.

    When I talked to my daughter, who is clearly a millennial, about all of this, she said the biggest reason why she subscribes to a streaming service is music discovery. She wants access to new music. The issue I have with this is that you have to pay to play; and at the end of the day, you don’t own any of it. However, you can play songs as often as you want or like. So if you want to find new music, and you want to play it where ever you are, whenever you want, its gonna cost you on the average, $10 bucks a month to find what you want and play it.

  2. You Gotta Pay for the Bandwidth
    I think this is perhaps the singular most problematic point in the whole streaming music model; and it’s the point that bothers me the most. Not only do you have to pay for the service, you have to pay for the service that gets you the bandwidth that allows you to play the music in the first place.

    This can cost you anywhere between an ADDITIONAL $10 to $50 a month per line on your account, which – at the end of the day – more than doubles the cost of your music subscription, especially if you go over your monthly bandwidth allotment.

    This over and above any and everything else is where the whole streaming model falls apart for me. I love music. I especially love listening to music while I drive to and from work. If I were to stream everything and if I had to stick to a specific bandwidth limit, I’d likely either run out of bandwidth or go over my limit and be subject to overage charges.

    This is the one thing that everyone forgets about when it comes to the streaming model: it uses cellular bandwidth, and bandwidth costs additional money.

  3. When you Leave, you Lose the Music
    You have to remember, you don’t own any of the music that you download. You can’t burn any of it to a CD. You can’t play any of it after your subscription expires or is cancelled. You only have access to any of the streaming catalog as long as you’re paying for your monthly subscription. Stop, and you no longer have the music in you.

Again, maybe I’m just an old fuddy duddy. Maybe I just don’t get it. Maybe I’m too old for music discovery and new artists. I don’t think I am, but there has to be another, perhaps better, easier, less expensive way to discover and play new music… Isn’t there? ISN’T THERE?!?

If there is a solution that I’d likely embrace, I don’t know what it is. Perhaps it’s in development now, or perhaps it’s still on the drawing board somewhere. In the meantime, I’ll rely on friends and family to turn me on to new music and new artists… and I’ll keep on playing the music I already own and I already enjoy.

What do you do for music discovery and for playing your favorites? Do you stream? Do you use traditional radio? Do you own a large music library and do you play locally or use a service to stream it like Google Play or iTunes Match? Why don’t you meet me in the discussion area below, and give me your thoughts on the whole issue?

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