Watch Out Spotify and Pandora, Shazam Just Got $30 Million Invested, Worth $1 Billion
The song identifying smartphone app, Shazam has just received $30 million in funding. For Shazam Entertainment Ltd., 2014 was a great year growing from 70 million monthly users in 2013 to over 100 million by the end of 2014.
The app works by using your smartphone’s microphone to pick up the sound waves of a piece of music and send that fingerprint to computers that store more than 30 million songs for analysis and pattern recognition, returning a possible match in seconds. The app then gives you the option to purchase the song over iTunes and share what you found via social media. The app has branched out to include TV show recognition.
Shazam estimates that 1 out of every 10 digital downloads is due to its app.
Shazam gets about 20 million requests a day. With so many users, the company has been valued at $1 billion.
There is a free ad supported version of the app and a paid Shazam Encore that removes advertising and allows the user to listen to the whole track via spotify after it has been identified.
The company intends to expand this pattern recognition ability to other areas. The $30 million investment is going toward expanding what can be identified via the app. The CEO, Rich Riley, has said that the app will begin being shown in movie theaters all across the U.S. before the film starts.
Riley has said that Shazam intends to go beyond music and TV, it will also start appearing in retail stores.
Retailers will be able to display scannable Q codes that will give Shazam users access to special deals, coupons, and other things like a free song download. Riley wants to increase shopper engagement by collecting data on users shopping and listening habits.
This of course is bad news for competitors like Spotify and Pandora. Spotify claims to have about 60 million monthly users and could be worth as much as $8 billion by the end of 2015. Pandora has over 75 million monthly users, and is valued at $4.5 billion. Both companies have a substantial number of users listening for free with ads playing occasionally.