Apple has confirmed reports that it’s buying Shazam, the ubiquitous music-recognition app. Rumors of an acquisition were first reported by TechCrunch on Friday, before being confirmed by the Financial Times.
The purchase price has not been disclosed, but it’s believed to be in the region of $400 million. That would be a significant exit for a company that’s been in the business since the 1990s, but the valuation would be far less than the $1 billion Shazam has previously raised funds at.
In a statement to Buzzfeed, Apple confirmed the news while not saying what it’s planning on doing with the company:
“We are thrilled that Shazam and its talented team will be joining Apple,” Apple spokesperson Tom Neumayr said in a statement to BuzzFeed News. “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.”
“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,” Neumayr continued. “We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”
Buying Shazam makes total logical sense for Apple: It gives the company a service and a way to convert people onto Apple Music. Song recognition is a neat trick for a digital assistant; one of the Google Pixel 2’s coolest tricks is background song recognition, which will tell you the name of a song from the lockscreen without you having to ever ask. At its simplest, acquiring Shazam could let Apple do something similar with Siri. Given Google’s advantage in data for AI, that would be reason enough to buy Shazam.
But buying the app also makes sense from a customer-acquisition perspective. Apple Music is one of a handful of big players in the music streaming business, where competition is starting to heat up. Spotify is rumored to be going for an IPO next year, while according to a report today, Google’s YouTube is planning on launching its own subscription streaming service in the near future. When users find a song on Shazam, the app prompts them where they can listen to (or buy) the song. If that links straight to Apple Music rather than a competitor, it could be a good way for Apple to boost its own service.