Shazam, the mobile music discovery service, has struck a major chord with wireless operators in their search for profit from consumer data services.
London-based Shazam has been around since 2002, but its usage has shot up 500 per cent and it has expanded from 12 to 60 countries in just the past 12 months.
Andrew Fisher, chief executive, told me on a visit to San Francisco that Shazam’s sudden spurt was down to it being in perfect harmony with the current state of the industry.
“It’s a convergence of a number of things taking place,” he said.
“Mobile music has really come of age – it’s a way that carriers are differentiating themselves and nine out of 10 handsets by the end of this year will have a music player integrated in them.
“The other main driver is ease of use – Java, Symbian, Brew, and the iPhone and Android operating systems allow people to build more compelling services.”
That includes Shazam. When it began, users, who wanted to identify music they were listening to in a store or club for example, would dial a number and hold their phone up towards the music for a few seconds. Shazam would use its patented “fingerprinting” technology to identify the song and then send a text message back to the phone with the details.
Compare that to Shazam’s latest iPhone app, which was downloaded 1.5m times and identified 20m songs in its first ten weeks. Here, there is a more attractive interface ,where music is “tagged”, album art and more information on the artist is available, the song can be bought on iTunes and related videos can be seen on YouTube.
This is changing Shazam’s business model – it is now pushing a $4 a month subscription plan to the service, in a revenue-share with operators, rather than relying on income from charges for individual phone calls. Mr Fisher said it was offering a more complete service with social elements – the iPhone app allows you to take photos and link them to your music, tagged tunes can be shared with friends on Facebook pages, music reviews are available.
Shazam also takes a cut on music sales and is benefiting from consumers being more willing to make instant purchases on their phones, now that they are the same price and as accessible as doing this on a PC.
Shazam has been used by 20m people and frequency is rising,with regular users accessing it 20 times a month on average. The US became its biggest market around 18 months ago and its service is offered by 75 carriers worldwide.
Shazam claims more than 90 per cent of the worldwide market for music recognition, which sounds plausible to me as Midomi, a service you can hum to and have it identify the song, and Starbucks’ in-store song IDs for the iPhone are the only comparable services that come to mind. Last.fm and Pandora, the best known music discovery services, work very differently (but have also received a major boost from their iPhone apps).
“Our goal by the end of 2009 is to be on 250m handsets – one in four new handsets – and our performance and results support that,” concluded Mr Fisher.
