Apple Acquires Shazam and Its Song-Recognition App -- Update

By Tripp Mickle 

Apple Inc. said it has acquired Shazam Entertainment Ltd., giving it ownership of one of the popular song-recognition apps at a time the iPhone maker is looking to boost its music-subscription service.

Financial terms of the deal weren't disclosed.

Apple said Monday it has "exciting plans" for Shazam but declined to disclose more. Shazam said Apple would enable it to "continue innovating."

The acquisition gives Apple ownership of an app that helps users identify unfamiliar songs. Users are often directed to listen to those songs at Apple Music or Spotify, helping those services possibly reach new subscribers. Such referrals could help Apple boost the number of subscribers to its streaming-music service from its current 30 million. Spotify AB says its service has 60 million paid subscribers.

Shazam, which made its debut as an app in 2008, also gives Apple access to extensive data and insight on people's musical interests. It has been able to use its insights in the past to predict the "songs of summer," insights gleaned from user searches that could help Apple put together playlists for streaming-music subscribers.

"If you have the direct integration of Shazam as part of Apple, and people find out what a song is [by] using Apple, then they go buy it using Apple. It creates a full ecosystem," said Brian Zisk, the executive producer of the SF MusicTech Summit, an annual conference.

Apple has ceded some ground in the music business in recent years. The combination of its iTunes store, where songs were available for 99 cents, and its iPod, which revolutionized portable music, allowed Apple to take a commanding lead in the business. However, the rise of smartphones led many consumers to transition from buying music to subscribing to services that provide it.

Apple didn't launch its own streaming service until 2015, roughly four years after Spotify began offering a premium subscription service in the U.S.

The battle over music is taking on new significance with the rise of smart speakers, such as Amazon.com Inc.'s Echo and Alphabet Inc.'s Google Home. Those speakers use virtual assistants to identify songs or artists on request. They can also change the music based on verbal requests such as, "Play something more upbeat."

Apple is launching its first smart speaker, the HomePod, next year after delaying its planned December release because the device wasn't ready. It has billed the HomePod as a high-quality speaker with better sound than rivals, and touted its ability to do things like name the drummer in a particular song.

Amazon is elbowing into the music industry behind its Echo device. It's increasingly selling digital songs and albums and adding subscribers to its own streaming-music service, Prime Music.

"It's really a battle between Amazon and Apple, and they're looking for an edge," Mr. Zisk said.

Apple's virtual assistant, Siri, has been using Shazam to allow users to identify songs on request since 2014.

Write to Tripp Mickle at [e-mail]

(END) Dow Jones Newswires

December 11, 2017 14:37 ET (19:37 GMT)

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