Apple buys Shazam

Rosie Baker
By Rosie Baker | 12 December 2017

Apple has bought music and image recognition app Shazam, in a deal reported to be worth US$400m.

The product, which began as a song recognition app, has expanded its tools in recent years to include augmented reality and image recognition.

Shazam, which is based in London, uses a smartphone’s microphone and camera to recognise songs, TV clips, video and images, and links through to content.

Shazam has around 15 staff based in Sydney, led by APAC managing director Steve Sos.

It makes majority of its revenue from integrations with print and TV ads, which allow advertisers to give consumers access to additional content when they ‘Shazam’ the image or the ad from TV or online.

The company reported revenue of US$53 million in 2016. While it did reach profitability that year after surpassing one billion downloads, investors were questioning the company's previous billion dollar valuation.

Tech site ReCode reports the deal is worth $400 million, less than Shazam’s top valuation of closer to $1 billion.
The deal had been rumoured around tech blogs for a few days with reports also claiming Snap Inc. made an offer.

Interestingly, the main ad on the Shazam home screen today is for Apple, and links through to its e-commerce site.

Shazam is likely to integrate with Apple Music and with the iPhone operating system, but Apple is more likely to be interested in Shazam’s augmented reality platform.

In March this year it announced Shazam Codes, which is described as a way for brands to “bring marketing materials to life … in a compelling, interactive new medium”.

Locally it has worked with brands including Nestle and Kellogg  on AR activations. 

Over the past two years Shazam has worked with both Spotify and Pandora globally to integrate with the music streaming platforms and provide referrals. In recent weeks those integrations have disappeared - possibly in preparation for the Apple deal. It's not clear if those ties have been severed or if they will continue.

Shazam also integrates with Snapchat, and Samsung smart TVs among other tech platforms. It's not clear if those deals and itegrations will be affected by the deal.

Shazam and Apple have been contacted.

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