Apple buys Shazam at a discount

The American corporation Apple has bought the service of recognition of songs, television shows and clips Shazam. This is reported by The Verge with reference to the company’s message.

Shazam in the last round of investments, according to Techcrunch, was estimated at $ 1 billion. In total, since 2002, the service has attracted $ 143.5 million of investments from such entities as Kleiner Perkins, DN Capital, IVP, Sony Music, Universal Music and Access Industries, which belongs to Warner Music. For music service, the reasons for the lowering of costs are the difficulties with monetization and a weak business model.

“We are delighted that the talented Shazam team will join Apple, Apple Music and Shazam are the perfect combination that will allow our users to realize their musical passion,” the company said.

According to the interlocutors of the publication, Apple negotiated the purchase of the service for five months, and began negotiations by the time when Shazam was already in the negotiation stage with Snapchat and Spotify.

Why does Shazam need an Apple that already has a Music service? First of all, the Cupertins are interested in the sound recognition technologies used in Shazam. In addition, the company will save on the commission that Shazam pays for the application sending users to the iTunes Store to purchase content.

According to the Wall Street Journal, these payments accounted for most of Shazam’s revenue in 2016. However, despite the contract with Apple, Shazam earned in 2016 only $ 54 million.

Shazam has similar agreements with other streaming platforms, such as Spotify and Google Play Music, which compete with iTunes. These services get thanks to Shazam more than 1 million clicks a day, writes the Wall Street Journal. In general, this practice increases sales of digital content by 10%.

Also, Shazam signed an agreement with the social network Snapchat. Having bought a service, Apple will have the opportunity to influence these agreements. It is noteworthy that Snapchat also made Shazam an offer to buy.

The deal will also allow Apple to compete more successfully with the Spotify portal, making it easier to find songs and add them to the lists. Currently, Spotify has 60 million subscribers, and Apple Music – only 27 million.

Also, Apple may be interested in the augmented reality technologies created in Shazam, believes The Verge. This year, the service launched augmented reality platform, the main one on image recognition.

The platform allows the user to scan a magazine, book, poster, advertisement or other product, after which the service can lose three-dimensional animation, product visualization or 360-degree video. Starting from this technology, Apple will be able to create a competitor to Google Lens, according to the publication.