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Apple Acquiring Shazam and Says 'Exciting Plans' Are Ahead

vladi said:
They obviously didn't buy Shazam (whatever spelling) for it's capability to ID the audio samples. All of the audio recognition software connect to the same data base in San Francisco to ID the song so they all have to follow the same protocol. Maybe it was something they were working on regarding audio processing but from what I know since the beginning of audio recognition service back in feature phone days they all claimed how you can id the song even in crowded places such as clubs. Who knows.

For example Mixed In Key actually looks for harmonics and it's able to identify the key of the song. However it's very debatable how they do it, they also send the pieces to online data base for comparison.
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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?
 
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https://www.cnbc.com/2017/12/11/why-did-apple-buy-shazam.html

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~
 
Rigby said:
They are not losing money on free users, since they pay a share of the revenue per user that they actually receive (in case of the free users from the ad revenue). They are not making a profit overall because their marketing and development costs are higher than the income they generate. I'm obviously not privy to their internal strategies, but I believe reaching a critical mass of subscribers is currently more important to them than short-term profits. Their investors apparently believe in their strategy, since they keep giving them money.
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http://variety.com/2017/voices/columns/spotify-streaming-fees-1202506347/

What do you think the phrase “negative margin” means?
 
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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.
 
apolloa said:
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.
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If buying Shazam kills the competition, the competition didn’t have any real business plans.
 
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Rigby said:
They are not losing money on free users, since they pay a share of the revenue per user that they actually receive (in case of the free users from the ad revenue).
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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.

Rigby said:
They are not making a profit overall because their marketing and development costs are higher than the income they generate.
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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.
 
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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 UK.....it was brilliant for it's time then and it's done so well.
 
KingslayerG5 said:
https://www.cnbc.com/2017/12/11/why-did-apple-buy-shazam.html

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~
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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.
 
Does it make sense to buy the ad free version of Shazam? Or is Apple gonna kill that version anyway?
 
sualpine said:
This is bad, because it's proof that Apple simply can't improve Siri without acquisitions.
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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.
 
Michael Goff said:
If buying Shazam kills the competition, the competition didn’t have any real business plans.
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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..
 
Michael Scrip said:
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."
Click to expand...
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.
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.
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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".
 
Android users should not be worried as Google search widget works definitively better than Shazam, slower but more difficult to fool
 
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.
 
apolloa said:
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..
Click to expand...

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?
 
Rigby said:
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".
Click to expand...

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
 
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