There have been conflicting theories about why Apple spent a rumored $400M on acquiring Shazam. Some suggested it was nothing more than protecting Siri’s Shazam-powered music recognition. Others wondered whether it was to expose Shazam’s customer base to Apple Music. Yet others theorized it was for the data.

Now one early investor in Shazam has suggested that the combination of the latter two elements could significantly boost Apple Music subscriptions …

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Business Insider reports the comments made by DN Capital analyst Mark Mulligan.

Shazam has 150 million active users a month, and about 300 million to 400 million uniques per year. If you convert 1% to 5% of those users to Apple Music, the investment will pay for itself in spades.

That alone would add between 1.5M and 7.5M subscribers to Apple’s streaming music service. But Mulligan also strongly supports the data theory.

“The Shazam dataset will be an important asset” […] When you open the Shazam app and identify a song, you can then stream that song via Apple Music or rivals like Amazon Music and Spotify. That’s valuable insight into how people are using other services.

“It’s a window into billions of data points about Shazam’s Spotify, Amazon, and Deezer users, there’s some value in that,” said Mulligan. “It really comes down — how short was the iTunes dataset coming up? If iTunes’ data on a decade of user preferences wasn’t good enough, then maybe Shazam was necessary.”

This approach – analyzing who is listening to what – was successfully used by Spotify to drive its popular Discover Weekly playlists.

The sheer range of DN Capital’s estimates reeks of ‘finger in the air’ guesswork, but the data theory seems to be gaining ground. I wrote before that whether or not Apple shuttered the Android Shazam app would give a big clue as to its motives; right now, the app is still alive and well.

Image: @FlareZephyr


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