Shazam app gets $40 million from Mexican telecom
Shazam app: The Mexican telecom company America Movil invested $40 million in Shazam, creator of a song-identification application
The Mexican telecommunications company America Movil has invested $40 million in Shazam, a company that received global attention for its song-recognition smartphone application.
In the Monday press release, Chief Executive Carlos Slim says he sees the investment as a way to help America Movil “differentiate its services in Latin America.” As of March 2013, America Movil has approximately 263 million wireless subscribers in the Americas.
“Shazam is defining a new category of media engagement which combines the power of mobile with traditional broadcast media and advertising,” Mr. Slim says in a press release on the Shazam website.
American Movil acquired 10.8 percent of Shazam shares.
Shazam has ballooned since it the company launched its first smartphone app in 2002 in Great Britain. The company has expanded to serve more than 350 million people in over 200 countries, according to Shazam’s website. The app is one of the the Top Ten most downloaded apps on iTunes.
To use the Shazam application, users simply hold up their smartphone’s microphone to gather a 10-second sample, or acoustic fingerprint, of the song being played.
Acoustic fingerprinting, also called audio fingerprinting, uses an algorithm to take a snippet of music to create a digital summary of its attributes. It’s kind of like human fingerprinting: the lines and curves might not match up exactly, but it’s highly unlikely that two songs will have a drum solo paired up with the exact same bass line. The unique song bite can then be entered into a database to search for a matching song.
The Shazam music database boasts over 11 million songs.
The technology works with music clips from advertisements, radio broadcasts, or television shows.
Shazam now helps users find songs on other music streaming websites such as Pandora and Spotify, and includes a device to geographically map out a song’s popularity.
Shazam first used this technology in its smartphone app, but has since moved into the TV and advertising realms. In 2011, the company introduced Shazam TV, a product that picks up on what viewers are watching using the same acoustic fingerprinting technology with a click of the Shazam app button. The TV app offers trivia tidbits for viewers, keeps up with the latest tweets about the show, and offers information about the episode's soundtrack. The same app has also allowed Shazam to target advertising by adjusting ads based on feedback from the app. Shazam shows ads for companies from which it receives funding.
Though Shazam is currently not profitable, the company has generated over $300 million in profit from iTunes and Amazon sales in the past year, according to the LA Times. When a consumer finds a song via the Shazam app, Shazam gets a portion of the profit from a song purchased.
Shazam currently does not have a public offering, but is on the path to an IPO, according to a statement made by the company’s chairman, Andrew Fischer to Bloomberg.