The normal route is for a TV show to build an audience and then launch an app as they’ve been told it extends their “engagement”. Shazam, the music recognition app, could have just flipped that thinking to become the first app to be made into a TV show.
Beat Shazam has been picked up by Fox in the US where it will be produced by British executive Mark Brunett, and is basically a modern spin on Name That Tune, where contestants play against the music identification app to try and identify a song first. It has been a long and curious journey for Shazam but, unlike many of its peers, it is still going after 15 years, which is several lifetimes in digital music.
Back in 2001, the only real use for your Nokia 3310, beyond calling and texting people, was playing Snake. That January, I got a demo of an early version of Shazam at Midem, the annual music industry conference in Cannes, where the developers held up their handset in a crowded bar as music played over the PA and, five seconds later, an SMS arrived telling us what the song was and who was singing it. It worked on proprietary acoustic fingerprinting technology and remains the most jaw-dropping deployment of nascent software I have ever experienced. It felt like magic.
When it fully launched in 2002 in the UK initially, Shazam had to rely on the 2580 short code to work (deliberately picked as the numbers made up the middle row of a handset’s keypad and therefore would be easy to remember); but then you’d have to go to an actual shop and buy the CD as iTunes did not exist then. Some experimentation with mobile operators’ portals followed, where you could download tracks straight to your phone but that was the first real white elephant of digital music retail as “mobile content” then was ostensibly polyphonic ringtones and few handsets could handle MP3s.
Shazam’s spotlight moment, however, arrived in 2008 with the debut of the Apple app store and it featured as one of the early apps in Apple’s marketing around both the store and the iPhone. Just as bands having a track used in iPod ads a few years earlier found, being associated with an Apple product could catapult you from the margins and into the mainstream. By the end of 2014, Shazam had reached 120 million monthly users and was dealing with 20 million tags a day.
There have been multiple competitors that came in its wake – notably SoundHound and Sony’s own TrackID – but they have been overshadowed by Shazam’s enormous user base (it has more than 100 million monthly users).
The post-iPhone business model then was relatively straightforward. The app was free to use but users could link through to buy identified tracks from iTunes – and later other retailers as it developed apps for every major mobile operating system – with Shazam taking an affiliate cut of every download. At its peak, the company was reporting that around 10% of tagged tracks resulted in a purchase. (There was also a paid version of the app that allowed unlimited tagging and extra functionality, but the company soon realised it had to be free at the point of initial use to get on to as many smartphones as possible – 500 million and counting.)
That was to prove a short-lived gold rush as the download market started to decline, first in the US in 2013, and now Shazam, in a telling indication of the changing of the guard, links through to streaming services like Apple Music, Deezer and Napster.
It remains an important marketing platform for the record industry, where acts and labels promote tracks in-app and ensure that as soon as pre-release tracks go to DJs, Shazam has it in its database in advance. I was once told, off the record, how one major label was sent into a flap after scoring a sync on a major ad campaign but had forgotten to send the track to Shazam and had to panic-mail the file over so that Shazam could ingest it and ensure there were no more failed tags. Shazam, at that point, was seen by labels as a second wind in marketing a track after it was used in an advert.
Fifteen years is a long time in technology and Shazam has had to evolve beyond music identification, developing trending charts and also working with TV/film companies, brands and advertisers (where posters are “Shazamable”) to extend it beyond just music. It has been involved with the Super Bowl ad break as well as American Idol, plus it has evolved its technology to let users “tag” TV shows. It has been a part of the background of shows, but Fox is hoping its brand is known and powerful enough to be parlayed into a show in its own right.
Shazam is also proof that, even with scale, it does not follow that digital companies become profitable. The company may have raised $30m of new investment at the start of 2015 to give it a market valuation of $1bn, but it is still losing money. For example, in 2014, it ran up losses of £14.8m ($19.3m) according to its filings at Companies House in the UK. It is not alone in this regard, with both Pandora and Spotify currently grappling with this exact scale/profitability conundrum.
In many ways, the Beat Shazam TV show sees it returning to its music roots. Like Hoover and Google, Shazam is that rare instance where a proper noun becomes a verb – but that can only carry you so far in terms of building a viable business. Contestants on the show stand to win “big money prizes” and Shazam itself is no doubt crossing its fingers for a similar windfall.
- This article was amended on 12 August to clarify that Chris Barton is the founder of Shazam and not it’s current CEO, that position is held by Rich Riley.