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Apple Acquires Music Discovery App Shazam, And Will Phase Out Ads

Apple acquiring Shazam gives Apple Music a new dimension and a potential boost in the battle to beat Spotify in terms of paying subscribers.

Vishal Mathur | News18.com@vishalmathur85

Updated:September 24, 2018, 10:52 PM IST
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Apple Acquires Music Discovery App Shazam, And Will Phase Out Ads
Apple acquiring Shazam gives Apple Music a new dimension and a potential boost in the battle to beat Spotify in terms of paying subscribers.
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Apple has finally completed the acquisition of the music recognition and discovery app, Shazam. And the very first change that Apple will make to the app is to phase out the in-app advertising, making it completely free to use. According to the latest numbers, Shazam has been downloaded over 1 billion times, and is available on iOS as well as Android. This acquisition gives Apple another app on the Android platform. Apple Music is currently one of the few apps that Apple has for the Android platform.

It is reported that Apple paid nearly $400 million for Shazam, though the company hasn’t confirmed the amount.

“Apple and Shazam have a long history together. Shazam was one of the first apps available when we launched the App Store and has become a favorite app for music fans everywhere. With a shared love of music and innovation, we are thrilled to bring our teams together to provide users even more great ways to discover, experience and enjoy music,” said Oliver Schusser, Apple’s vice president of Apple Music, in an official statement.

Shazam lets users identify songs simply by listening to the music playing around them—this can be done via the microphones in the phone running the app. Apple says that users identify songs using the Shazam app over 20 million times each day, globally.

At present, it is not entirely clear how, and if at all, Apple will make any changes to how Shazam works to tweak its core operability. It is quite possible that Apple may leave it as a standalone product, though it is hard to see how they will monetize it if it remains ad-free. The other option is to integrate it into Apple Music, which will make discovery and access to new music much simpler.

This is just another example of Apple’s focus on the services. At the time of writing this, Apple is valued at $1.05 trillion. As per the numbers for the June quarter, the big revenue jump comes from the Apple services, which includes Apple Music, iCloud, and App Store. These services combined for a 31 percent increase in year-on-year revenue, clocked at $9.55 billion. Apple is trying to further accelerate its services business, and further expanding the scope of the Apple Music streaming app is one of the ways. Perhaps we could even see a subscription option, bundled with Apple Music, to monetize Shazam individually.

Apple Music is facing significant competition from streaming apps such as Spotify, and Google’s recently revamped YouTube Music, which has replaced the Play Music app in some parts of the world. As of the quarter ending June, Spotify had clocked 170 million users, out of which 75 million are paid subscribers, according to official numbers. Apple Music currently has 50 million subscribers, and apart from those in the free trial stage, all are paid subscribers since Apple Music does not have an ad-supported free subscription tier. Incidentally, it was reported that Spotify also wanted to acquire Shazam.

The last big music acquisition which Apple made was in 2014, when they acquired Beats for $3 billion.

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