(TIML TECH) Apple has now confirmed the purchase (though not the price).
Apple is reportedly acquiring Shazam in a fire-sale deal, according to details emerging. According to TechCrunch, the acquisition is happening for roughly $400 million, a severely distressed price point.
Shazam is a popular music recognition app. The app allows anyone to recognize a song playing, typically in public places. More recently, the company started expanding its recognition capabilities to include formats like TV commercials, a move designed to increase branding revenues.
But that expansion has only been partially successful, with broader monetization a challenge.
The latter, penniless group may include employees, according to TechCrunch. Other investors may also have to wait in line. In total, Shazam has raised close to $145 million from the likes of Kleiner Perkins, DN Capital, and IVP.
The company has also received strategic investments from all three major labels, with Warner Music Group parent Access Industries the most high-profile.
Accordingly, the Apple sale could complicate things for the strategic investor group. The reason is that Shazam’s recognitions offer great intel on what music fans like. As a worldwide, fairly ubiquitous app, Shazam offers unique data on what songs are grabbing the most attention and interest.
All of that makes it easier to identify bubbling artists and songs, or to validate the success (or lack thereof) of existing artists. Once under Apple’s wing, the valuable data-sharing could stop.
The presence of Shazam could help Apple develop smarter algorithms around its playlists. And, subsequently broaden its Apple Music service.
Just recently, sources noted that Apple was planning to eliminate music downloads from the iTunes Store by 2019. That would vastly simplify the iTunes Music selection, and shift more consumers to Apple Music streaming.