“Who is she?”
My friend turned around and continued to walk backward in the supermarket as he tried to answer his own question. It was a late December night in 2009. The two of us were killing time before catching an improv show at the UCB theatre across the street.
“I wish I could just Shazam a person’s face” he continued.
A seemingly ridiculous idea in 2009, I went on to make fun of my friend and the inevitably more awkward social interaction something like that would create. At that point Shazaming in public still required you to locate a speaker and then ask everyone within a 50-foot radius to politely “Shut it!”
Shazam was a far from perfect, but using the app’s core functionality felt something like performing a magic trick.
Yesterday, Apple announced they were in the final stages of purchasing the UK based music recognition startup. News of the acquisition left most people underwhelmed and a very only a very select few asking, “Okay, but like why?”
The obvious answer: Apple Music and iTunes.
Shazam has carved out a market for itself by only being a discovery app. Their name has become synonymous with vibing with a song and wanting to keep it for repeat enjoyment. Shazam’s sole purpose is to figure out what song is on and then point you somewhere else, be it Apple Music, Spotify, or Amazon. With the announcement of Apple’s purchase, the odds are in your favor if you were to bet the latter two will be cut off from the discovery service.
But music discovery and iTunes revenues can’t possibly be Apple’s only motivating factor. After all, Shazam has been a built-in feature of Siri’s since 2014.
While Shazam has struggled to find a long-term business model that would adequately satisfy investors, they started branching out. In 2015, they announced Shazam Visual. It was supposed to be a whole new frontier for the company. Users were now able to scan any image or video with a Shazam logo and identify what they were seeing. A move that was so clearly directed at advertisers that an app was not need to see the intent of that pivot.
Then early in 2017, Shazam announced their move into augmented reality. Fast forward three months, to Apple’s WWDC, and you’ll hear a very similar push for AR from the tech giant.
But even there, in AR, is not where the answer to our question lies. Apple doesn’t need the reported $400 million bill to push their agenda; they have enough behind them to bend realities on their own.
To truly understand Apple’s motives behind an otherwise apparent acquisition we have to look at the landscape. Gauge their competitors. And for that, we turn to Alphabet and Facebook.
In 2017, those two alone accounted for 25% of global advertising revenue. In a nearly $550 billion industry, one-quarter of that is being shared by two companies. It’s no surprise that others are now looking at that number trying to figure out how to get their share.
Which, for Apple, is easier said than done. In the summer of 2010, they announced an iOS advertising platform aptly named, iAds. Results were mixed, but never produced anything substantial enough for the tech behemoth to actually profit. Leaving Apple to shut down iAds six years later.
But year over year the number of advertising dollars keeps growing. And simultaneously the number of dollars shifting from traditional print mediums to digital doesn’t make it easy for anyone, let alone Apple, to sit back and just take the L.
For the past few years, Apple has implemented Shazam-like discovery features into their products, starting with their integration with Siri. Discovery has always been a key factor for making Siri successful. To that end, I was watching a movie the other night and found myself asking my Apple TV “Who’s that actor?” I quickly realized, that level of image recognition was not yet possible. My Apple TV would not be able to guess which actor was just on the screen. But with the announcement of yesterday’s news, it’s only a matter of time.
If we step back and look at how Apple is position themselves right now, in than this deal with Shazam is pretty much a no-brainer. That $400 million price tag will more than make-up for itself with the music traffic alone.
Where the real revenue stream and growth is at is in the extended advertising they’ll be able to offer. No longer confined to just one screen, or browser syncing, Apple will be able to provide brands with a truly immersive experience for their advertising. Gone are the days when cookies will follow you around from device to device. You’ll be able to show an ad on Apple TV and have it trigger an AR execution on a person’s iPhone or iPad. Advertisers will be “hacking” these devices and not needing to resort to crafty tactics. They’ll let you take a picture of a famous landmark only to only to then be automatically served branded content. Or even more subvertly, target you with ad placements in your normal browsing circles.
Hear me out; I’m not trying to spell out the decline of civilization or prophesy a dystopian, Minority Report future. But to think that Apple’s sole reasoning for purchasing Shazam was for its music recognition abilities is a gross underestimation of both companies.
And while neither company has explicitly listed out the reason behind the acquisition, with features like Face ID already implemented what we do know- is it’s only a matter of time until we’re able to Shazam people’s faces.