Market Watch

Shazam Offers Spotify Playback


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UK-based music identifying service has updated its apps for Android and iOS (iPhone, iPad, iPod Touch) devices to support track playback via Spotify (the PC and mobile on-demand music service).

To access the feature, iOS and Android Spotify users will have to pay for premium Spotify access (currently £9.99 per month), which provides ad-free access to more than 10m tracks via mobile and PC.

Shazam launched its mobile music indentifying service in 2000 and now counts more than 100m users (Shazam counts users as people who have tried its service rather than active users). Its free iPhone app allows users to 'tag' (identify) five songs per month. Unlimited access is available for £2.99 for one year or £3.49 for lifetime access.

Shazam has expanded its service beyond the music industry. In 2010, it launched SARA (Shazam Audio Recognition Software), a service that enables brands to use Shazam to target consumers who tag adverts in order to receive promotions and discounts.

Analysis
Shazam's free iOS and Android apps limit users to tagging five tracks per month. Adding Spotify support may drive usage and encourage its customers to upgrade to its premium apps. This move, however, is unlikely to have a substantial impact on Shazam's user base, which is many times larger than Spotify's 750,000 paying subscribers announced in December 2010.

For Spotify's existing user base, Shazam integration will make its premium service proposition slightly more attractive. But this won't be a massive game changer. Spotify's ability to use the Shazam service as a platform to promote its premium offering is interesting. A large part of Shazam's user base is located in the US where Spotify is currently unavailable and has no brand awareness. With Spotify expected to launch in the US at some point later this year, this deal could have a much more important role to play later on.

Shazam's app is among the most successful applications in the music category of Apple's App Store. At the time of writing, its apps featured in the top 5 grossing music applications in both the US and UK App Stores.

Its free Android app has achieved more than 250,000 downloads, the paid Android version Shazam Encore is listed on Google's Android Market as having been downloaded between 50,000 - 250,000 times.

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