Apple confirmed an agreement to acquire Shazam Entertainment, in a move which bolsters its music streaming proposition and steps up the competition with major rivals Spotify and Google.
In a statement, Apple confirmed reports (first broken by TechCrunch) it was closing in on a deal to acquire the UK-based app maker. While Apple did not reveal financial terms of the deal the price tag is reported to be $400 million, which would make Shazam the company’s largest acquisition since it bought headphone maker Beats Electronics for $3 billion in 2014.
It also represents a sharp cut on a $1 billion valuation Shazam hit in 2015 after its last funding round.
Founded in 1999, Shazam was one of the first major applications to demonstrate the power of the iPhone, with app the able to recognise a song after hearing a snippet of sound.
The app already integrates with Siri, Apple’s voice assistant, Apple Music, Spotify and Google Music, along with social media company SnapChat. The bulk of Shazam’s revenue comes through commissions it earns via referrals.
With the acquisition Apple is, in effect, cutting out the commissions it pays to Shazam: it will likely gain exclusivity on Shazam’s patented audio recognition system.
Apple stated it was thrilled “Shazam and its talented team will be joining Apple”.
“Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS, it’s used by hundreds of millions of people around the world, across multiple platforms.”
Shazam said in 2016 it had hit 1 billion downloads in total, and by November had 175 million monthly active users globally on Android according to App Annie. But, notably, the company struggled to turn its popularity into hard cash.