Shazam Will Point Users To Songs On Spotify

Here’s a no-brainer that many users will be thankful for – and which could mean another small increment of business for both sides…

Shazam is adding a “Play In Spotify” feature to its mobile music identification app, letting users click to play identified songs by automatically opening their Spotify app.

The catch — at least for now, users will need to be paying users of both Shazam’s premium Encore app and of Spotify’s premium service, which is required for mobile access. It’s in both iPhone and Android versions.

The facility also works with the pay-for (SHAZAM)RED charity app, but won’t work with the free Shazam app until “later in Q1”, the company says. Shazam users can already click to play tracks over on YouTube.

At the end of 2010, Shazam hit a big target of getting 100 million users — something that could predate a sale or IPO. Aside from pay-for apps, its business is three-fold: 1) in-app ads, 2) affiliate links out to partners like Spotify and 3) making the technology available to advertisers…

Twelve months ago, CEO Andrew Fisher said Shazam users were identifying two million songs each day and buying 13 percent of them via retail affiliates like iTunes Store and Amazon MP3 – that means Shazam was taking a slice of 260,000 purchases it was sending out each day.

The value here for subscription business Spotify is different — unlike iTunes and Amazon a la carte stores, a click from Shazam won’t result in any song sale, only the necessity to serve another track to another user. But it will hope the very availability of the feature in Shazam may drive a few more Shazamers to buy a Spotify Premium account.

Likewise, Shazam will hope that the feature will merely drive more people to buy its app.

And, of course, the whole shebang will only work in the countries where Spotify is available.


Shazam CEO Andrew Fisher tells paidContent:UK the delay to adding “Play on Spotify” to free Shazam apps is deliberate: “We wanted to give something to our premium users and recognise that they have paid.

“Shazam is certainly going to profit from this relationship because people will be incentivised to get the app. We don’t have to monetise every component part of the experience here. Just the general addition will encourage people to come back more often.”

Shazam users are now identifying three million tracks a day — a tenth of those events result in converted click-through purchases from inside Shazam to iTunes and Amazon (NSDQ: AMZN). But Fisher doesn’t think adding Spotify will cannibalise this affiliate income.

“Ninety percent of our users don’t buy the music. We have a segmented market where some consumers want to rent their music. All we’re doing is addressing that portion.”

Spotify’s business development head Faisal Galaria tells paidContent:UK the “overwhelming majority” of the service’s 750,000 paying customers do so to get mobile access: “By definition, if you’re paying for premium, it’s to get mobile access.”

But Galaria’s unconcerned by how networks’ data capping could affect this channel. “The vast majority of the mobile listening experience happens over a WiFi network as opposed to over 3G. The impact on the mobile operators network decisions is pretty minimal. Most people use their phone as if it’s their MP3 player (ie. offline). Capping bandwidth doesn’t seem to be a real issue for our users.”