Apple Acquiring Shazam and Says 'Exciting Plans' Are Ahead

Discussion in ' News Discussion' started by MacRumors, Dec 11, 2017.

  1. gijoeinla macrumors 6502a

    Sep 19, 2011
    Los Angeles, CA
    I see this move as brilliant. Well done Apple! Now on to Netflix!
  2. dan110 macrumors 6502


    Jul 13, 2013
    The first smart Apple acquisition I've seen in years.
  3. VictorTango777, Dec 11, 2017
    Last edited: Dec 11, 2017

    VictorTango777 macrumors 6502

    Oct 28, 2017
    Since many people here are so eager for Apple to hurt and eliminate the competition, why doesn't Apple just buy out that database company so nobody else can use it?
  4. KingslayerG5 Suspended


    Oct 16, 2017

    As long as Apple doesn't make Shazam an iOS-exclusive and doesn't affect Android users, I'm ok with it. Run independent like Waze. If not, then Google should remove the apps they make for iOS and make them exclusive only for Android.

    I'll go back using SoundHound or a voice assistant. It's only fair since Google shares Google Assistant and many useful apps to iOS users. I don't want divisive moves. Shazam is cool and was amazing back in 2008 but SH and voice assistants can now do the same thing.

    Shazam being used all the time is insane. It would have been Al Bundy's favorite app over 25 years ago to figure out the song was "Anna"... ~Go with him~
  5. matjamca macrumors 6502

    Jan 2, 2013
    St Helens, Merseyside, England
  6. Michael Goff macrumors G5

    Michael Goff

    Jul 5, 2012

    What do you think the phrase “negative margin” means?
  7. apolloa macrumors G4

    Oct 21, 2008
    Time, because it rules EVERYTHING!
    I’m surprised this was allowed considering two of Apples direct competitors use the service. But then again Apple is used to just doing what ever the hell it likes..

    Seems like nothing more then the usual cheap Apple move to kill the competition to me.
  8. Michael Goff macrumors G5

    Michael Goff

    Jul 5, 2012
    If buying Shazam kills the competition, the competition didn’t have any real business plans.
  9. Michael Scrip, Dec 12, 2017
    Last edited: Dec 12, 2017

    Michael Scrip macrumors 603

    Mar 4, 2011
    I found this:

    "Whereas paid subs generate the lion's share of Spotify's revenue and have a 15%-20% gross margin, the company's free users generate just 10% of revenue and have negative 10%-20% gross margins."

    "The ad-based tier accounts for more than 60% of Spotify's total users, but it generates minimal revenue and loses money even before operating costs are taken into account."

    This was from an article in July of this year.

    Correct... Spotify does not make a profit overall.

    But there are plenty of articles stating that the free tier is the BIG reason for that. See above.
  10. fatboyslick macrumors regular

    Jun 23, 2010
    Congrats to Shazam !

    I remember using their service when it launched - you rang a phone number so it could hear the song playing and was only available in the was brilliant for it's time then and it's done so well.
  11. matrix07 macrumors 601


    Jun 24, 2010
    Could you elaborate more why you wished this?
  12. MH01 Suspended


    Feb 11, 2008
    You do remember Apple Music ? Yeah Apple can do UI like that
  13. Steve121178 macrumors 601


    Apr 13, 2010
    Bedfordshire, UK
    Google needs Apple more than Apple needs Google. Google make far more revenue from iOS than they do Android. And there's no way Shazam will continue their Android support in the future. You don't make an acquisition like that and allow your rivals access.

    I'd imagine Apple will use Shazam to bolster Apple Music & Siri and perhaps even do away with the Shazam app altogether and bake it into Apple Music/iOS.
  14. Smeaton1724 macrumors 6502a


    Sep 14, 2011
    Leeds, UK
    Can't Apple buy Goodreader and call it ''Files Pro'', that app is missing nothing.
  15. infinitejest macrumors 6502


    May 1, 2016
    Orange County, CA
    Does it make sense to buy the ad free version of Shazam? Or is Apple gonna kill that version anyway?
  16. T'hain Esh Kelch macrumors 601

    T'hain Esh Kelch

    Aug 5, 2001
    Why invent the wheel twice? Saves time, saves money, gives them a completely working product from day 1, and takes it away from competitors. This makes sense on so many levels. Why you think this shows anything about Siri is quite beyond me.
  17. apolloa macrumors G4

    Oct 21, 2008
    Time, because it rules EVERYTHING!
    Hahaha you are obsessed with the ideology that Spotify have no business plan aren’t you? Despite the fact they are still in business and growing.
    If they go bust then you can shout from the rooftops how right you were, unless it doesn’t happen for several years yet..
  18. ventricle macrumors regular


    Nov 28, 2016
  19. Rigby macrumors 601

    Aug 5, 2008
    San Jose, CA
    It depends what they included in the operating cost. The fact is that the ad revenue covers Spotify's licensing cost, since the rate is calculated as a share of actual revenue.
    Even if the numbers you quoted above were true, the same article says that Spotify generates 90% of its revenue from paid subscribers, suggesting that the free users only make up 10%. Applying a negative margin of 10-20% of that would mean that the free users cause a loss of 1-2% of overall revenue. Hardly "the BIG reason".
  20. sofila macrumors 6502a


    Jan 19, 2006
    Ramtop Mountains
    Android users should not be worried as Google search widget works definitively better than Shazam, slower but more difficult to fool
  21. KingslayerG5 Suspended


    Oct 16, 2017
    Buying Shazam is better than watching Kazaam. Shaq as a genie? Seriously?

    My history with Shazam & SoundHound

    2008 - Shazam
    2011 - SoundHound

    Shazam was one of the popular apps in the early App Store days along with Pandora. I didn't use SH until I got an Android.

    Back in 2012, SoundHound was superior to Shazam. I tested them both thoroughly enough and SH was faster and recognized more songs. Shazam was just more popular. I decided to keep them both.

    Then something happened the last couple years. Shazam got better to surpass SoundHound. Both apps are like ShareIt. With ShareIt, it noticeably gets worse after a certain amount of transfers that I would have to uninstall and reinstall again.

    Currently at the Play Store, there is 100M downloads for Shazam with 4.4 rating and only 50M for SH with 4.3 rating. But back then, SH was obviously superior. I believe Shazam will run independently with no Apple requirements the way Microsoft's Skype and Google's Waze run independently.

    If so where Apple divides users again with compromise for the benefit of their sandbox, back to SoundHound or whatever voice assistant I have.
  22. amegicfox macrumors 6502


    Apr 19, 2016
  23. Michael Goff macrumors G5

    Michael Goff

    Jul 5, 2012
    I don’t want to be right. I just see a company that is only in business because it keeps being given cash from the outside and I don’t see a viable business. But that wasn’t even about the idea of their viability.

    If buying Shazam were to kill any company, they were not long for the world. Take Spotify out of the equation. How is Shazam keeping competition going?
  24. DeepIn2U macrumors 603


    May 30, 2002
    Toronto, Ontario, Canada
    Yeah ... great. Apple's version of the defunct Sony TrackID ... coming to Apple Music soon.
  25. Michael Scrip macrumors 603

    Mar 4, 2011
    I've read a multitude of articles that say the free tier loses money.

    On the other hand... I've read ZERO articles that say the free tier makes money or at least breaks even.

    And let's not forget that Spotify has more free users than paid users. 80 million free vs 60 million paid.

    I've also heard that the ads in the "ad-supported free tier" don't even come close to providing enough money per free user.

    So if Spotify has to pay for the music that a free person listens to... but the free-user ads don't make nearly enough money to cover the costs of that music... how are they not losing money on the free tier?

    The article even says: "[the free tier] is an unprofitable and small ad-based service."

    And: "[the free tier] generates minimal revenue and loses money even before operating costs are taken into account."

    Those two statements CLEARLY say that the free tier is unprofitable and loses money.

    I've also read this: "we've heard several times from industry folks that Spotify ads are extremely cheap and bring in little money, and are mostly there to annoy people into buying a subscription." ¯\_(ツ)_/¯

    Anyway... here are some actual numbers from 2016 about their business as a whole:

    $3,300,000,000 in revenue

    Then they spent $2,805,000000 on royalty and distribution costs (85% of their revenue)

    That only leaves $495,000,000

    But they had $900,000,000 in salaries, marketing, product development and other costs.

    That's a -$405,000,000 loss for the year.

    This is no surprise... we already know that they make a loss. Spotify obviously spends more than they make.

    But here's the problem: it's not getting any better. Even as they add more users... (both free and paid)... their losses have increased each year!

    It's an unwinnable war! :p

Share This Page