Apple confirms takeover of British music app Shazam

Apple has bought the British song-recognition app Shazam, in what is believed to be one of the iPhone giant’s biggest deals.

However, the roughly $400m (£300m) Apple is believed to have paid is a significant markdown on the billion-dollar valuation Shazam received two years ago.

Shazam’s audio-recognition technology allows users to identify songs they hear on the radio or in public. Apple said it would be a “natural fit” with the company’s own streaming service, Apple Music.

“Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS. Today, it’s used by hundreds of millions of people around the world, across multiple platforms,” a spokesman said.

“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

Shazam was founded in 1999 and its big break came with the release of the iPhone App Store in 2008. It took a cut of song download fees from sending users to download stores like iTunes but the rise of music streaming services like Spotify saw this revenue stream dwindle.

It attempted to re-establish itself as an advertising company, by directing viewers to relevant websites when it recognised television adverts, but the idea struggled to take off. In 2016 Shazam posted revenues of £40.3m and a £4m loss, struggling to justify its $1bn valuation.

It is unclear how Apple plans to use Shazam but the company is attempting to gain the upper hand on Spotify, having launched Apple Music several years after its Swedish rival. It could be a valuable source of data on what users are listening to, or be used to mimic a song-recognition feature on Google’s Pixel smartphones.

“We are excited to announce that Shazam has entered into an agreement to become part of Apple,” Shazam said.

“Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users and we can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”