Apple’s $400 million acquisition of Shazam could finally unlock the music-tech company’s ‘hidden’ value. The outfit’s music-recognition technology has always impressed but its owners have struggled to develop a strong business model. “It doubled down on providing tools for TV advertisers but never got enough traction for that to be a true pivot,” says Music Industry Blog. “Shazam’s problem has always been that it was a feature rather than a product.”
But Music Industry Blog’s Mark Mulligan reckons Shazam’s use case is stronger than ever now that people are listening to a wider array of music than before. What Apple has done is recognise the value of the company’s tech and the deal has given it an answer to Spotify’s Echo Nest.
“Apple’s active user penetration is far behind Spotify’s, indicating that Apple needs to do a better job of engaging its users,” says Mulligan. “Better playlists, recommendations and algorithm driven curation all help Spotify stay ahead of the curve. Now, Apple will be hoping that Shazam will provide it with the tools to start playing catch up.”