Apple is finalizing a deal to acquire Shazam, the app that lets you identify songs, movies, and TV shows from an audio clip or basically listening to audio from either the song or video. The deal is reportedly for $400 million USD
For Apple, the obvious benefit of acquiring Shazam is the company’s music and sound recognition technologies. It will also save some money on the commissions Apple pays Shazam for sending users to its iTunes Store to buy content, which made up the majority of Shazam’s revenue in 2016, and drove 10 percent of all digital download sales.
A side benefit is if Apple decides to shut down the app, it will hurt competing streaming services like Spotify and Google Play Music, where Shazam sends over 1 million clicks a day. Shazam also has a deal with Snapchat. It’s unclear how the acquisition will affect any of these agreements.
With over 1 billion downloads, Shazam has been popular in its nearly 19 years of independence, but the company only pulled in $54 million in revenue in 2016, while losing $5.3 million in the year was a signal it still had a long way to go. Now as a part of Apple, turning a profit won’t be an issue.
