Will Shazam stream ahead in a new music world?

I was curious at a posting this morning on CNBC regarding the popular app used to identify songs http://www.cnbc.com/id/101406370

Much of it was derived from a posting on All Things D last year http://allthingsd.com/20130707/carlos-slims-america-movil-pumps-40-million-investment-into-shazam/

So here’s my thoughts. You would have thought that people were using Shazam to identify quirky or really great but lesser known songs….but hold on, not so fast!. If you take a look at what Shazam publishes about their users, look at what they are searching for:

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Pharrell’s “Happy”, Katy Perry, One Republic…..these are the most mainstream hit driven songs and artists in the world. Which leads one to think: are all these people living in a bubble or are they just part of “mainstream” music users who don’t live for music but enjoy it and find the Shazam app helpful so they don’t seem ignorant in social settings. I believe the latter is the case. These are the bulk of people who consume music not as a passion but as a part of a diverse life.

So Shazam, who last year said they had plenty of cash now are in the market for another ~$20M on a valuation of $500M. Who says the music business is down and out? It just depends what part of the ecosystem you participate in.

Do you use Shazam? I don’t. But I’m not part of the mainstream. Interesting case below taken from the CNBC article out today with excerpts from All Things D as well. Seems like Shazam would like to transition to giving more people more instant information about the television shows and even more commercials they are watching. I dont think thats gonna work as interactive data engagement on smartphones and tablets while we watch includes the ability to get info about almost everything you are looking at instantly from Google searches or by just hitting the “i” button. And as digital download sales decrease with streaming engagement on the rise form Spotify, Beats Music and others apps, the cut in affiliate sales that Shazam now enjoys will likely take a sharp downturn even as the number of active users are increasing.

Seems like early investors are also getting a cut of the new money which is usually not a good sign; not always the case but troubling in this case I believe.

“While Shazam gets a cut of the $300 million in affiliate music sales its app users purchased in the last 12 months, it is focusing a lot of energy on pitching TV advertisers on its service. This is a tricky proposition, though.

The beauty of the main music-discovery feature of the app is that it allows you to get the name of a song you simply can’t identify in another way. But when you are watching television, you can most likely identify the show (or can simply click “info” for that information) and commercial you’re watching, so it’s not nearly as serendipitous of an experience. Still, Shazam is trying to make this transition by delivering additional content about both shows and TV commercials to the mobile app.

Yet it’s nearly as simple for a person to just Google an advertiser or type in a URL if they really want to act on that commercial right then and there. In that way, Shazam for TV has similar challenges to the rest of so-called second-screen apps: Twitter and, to some extent, Facebook have started to dominate the online conversation around television programs and commercials, leaving limited market space for other players.

Riley’s (Shazam’s CEO) answer to this predicament is that brands should be advertising on Shazam in addition to these services, that there’s a population that discovers on Shazam that doesn’t do so on social networks. Advertisers can customize their Shazam campaigns to deliver any type of content they want when a viewer “Shazams” a commercial.”

 

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