Shazam: From Music Identification to Media Engagement
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Case Code: BSTR478 Case Length: 17 Pages Period: 2001-2015 Pub Date: 2017 Teaching Note: Available |
Price: Rs.500 Organization: Shazam Entertainment Limited Industry: Mobile Application Industry Countries: US, UK, India Themes: New Product Development, Innovation |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Early Days of Shazam
In the UK, Shazam went to the market in 2002 with a direct-to-consumer offering. Users had to dial "2580" on their phones and then hold the phone up to the source of the music. After some time, Shazam analyzed the tune and then sent users a text message with the name of the song and artist. The text message also contained offers for the user to purchase the ringtone of the song. Speaking on the issue, Andrew Fisher (Fisher), Chairman of Shazam, later said, "There wasn't significant interest in investing in music specifically as a mobile service, so the company was really forced to launch directly to consumers … and start educating people about Shazam."...
Growth in the Smartphone Era
Analysts believed that the launch of the iPhone and its complementary online music store, iTunes, in 2007, played a major role in transforming Shazam from a gimmicky service into a popular app. Several factors came into play, which created an environment in which the Shazam music app found a healthy market. The iPhone and other smartphones which offered good features to listen to music, pushed mobile phone users to employ their phones as a music player...
Continuous Enhancements
Over the years, Shazam brought in new features and enhancements to the app to maintain its appeal and differentiate it in a market getting rapidly cluttered. The company also released the Shazam app for tablets –iPad as well as Android tablets. Shazam improved the music identification technology in such a way that the app could even identify music that had been slowed down or sped up. Users were also provided with the option of checking out the music video of a tagged song on YouTube...
Partnerships and Collaborations
Shazam also strove to strengthen its offering, build its musical database, and develop new applications for its service by tying up with other major brands. One of the most common reasons for Shazam failing to identify a song was that particular song not being in its database. For this reason the company was always on the lookout for partnerships to bolster its musical database. In February 2013, Shazam announced an exclusive partnership with online music retailer Beatport through which it gained access to Beatport's entire music catalog. The deal bolstered Shazam's electronic music database of 25 million tracks with the addition of 1.5 million new tracks....
Moving into a New Area - Television Advertising
Shazam did not limit its music identification technology to mobile applications. The company actively sought out areas where it could apply its technology and make various types of content taggable. From 2009 onward, it initiated a strategy to turn itself into a media engagement company that enabled brands to connect with target audiences better. One of the first steps in its endeavor was the launch of the 'Shazam Audio Recognition Advertising' (SARA) program in the UK in 2010 for brands and broadcasters. The company later extended the SARA program to the North American market through a partnership with Augme Technologies, Inc. ...
Working with Television Networks
Apart from advertisers, broadcasters were expected to use SARA for special promotions and for displaying hidden content (exclusive videos and cast interviews). In 2012, before the Olympics, Shazam entered into a partnership with NBC Universal, Inc. As part of the deal, an on-air prompt with the Shazam logo was featured on several NBC stations, including NBC, MSNBC, NBCSN, Bravo, and CNBC, to urge viewers to use the app for various purposes. Users could tag coverage and commercials to get additional information 28 on their phone screen, referred to as a 'second screen'....
The Rise of Shazam
In popular parlance, the word 'Shazam' became a verb and referred to the action of detecting content (song, TV show or ad) using the app. Moreover, the company began to use the term 'Shazamable' to refer to content that could be identified using its technology. As of 2014, Shazam had a music database of 30 million songs. It had over 420 million users in more than 200 countries or territories, with almost 15 million new users being added each month. Shazam was used to identify about 500 million pieces of content a month. Its users performed 17 million tags per day, out of which 10-15% resulted in a purchase. Shazam claimed that almost 10% of global digital music sales originated from its app....
Outlook
Shazam was under threat from other social TV apps and online music streaming services that were eating into the revenues of traditional online music stores (Shazam earned a cut in the sales made through its service). Moreover, the company had competition from several new entrants – established and startups – into the music identification space, each with their own unique offering. The new entrants were aiming to capitalize on the large scale usage of smartphones and the rise of m-commerce. Shazam's main sources of revenue were the small percentage of commission it charged on the digital sales and TV advertising. Rich Riley (Riley), CEO of Shazam, claimed that Shazam brought in revenues of "tens of millions" of dollars and added, "Advertising is the biggest [revenue driver] and then our music business."...
Exhibits
Exhibit I: Information on Online Music Stores
Exhibit II: Shazam's Key Events
Exhibit III: Shazam's Product Offerings
Exhibit IV: Technology behind Shazam's Music Identification Service
Exhibit V: Information on Venture Capital Firms
Exhibit VI: Information on Venture Capital Firms
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