Apple acquires Shazam

I first met with Chris Barton and Philippe Ingelbrecht in Berkeley in around 2000 when the idea of Shazam was just beginning to form. The idea that Avery had created such a smart algorithm that it could read a recording from the noisiest of ambient sound contexts was amazing. Today we would call it AI, but then we just thought it was super cool and that everyone would soon be holding up their mobile phones and figuring out what was playing in that pub, bar, cafe, etc. Of course the mobile phones were pretty clunky then and they were much clunkier in the US than they were in Europe. And folk in the UK were using their mobiles much more adventurously and frequently than anyone in the US. Europe was ahead and that was why Phillipe and Chris decided to come to London to set up Shazam. In early 2002, post 9-11, London seemed like a safer place to start a business too maybe. I spent a few months advising them at that time on how to move things forward, who to talk to and where to set up in London.

 There was an interesting IP conundrum that never got fully resolved and that was where ownership resided in a database created from the fingerprints of audio recordings.  I remember wondering how long it would take before the major labels would demand a piece of the action,  even though the database that Shazam created was based on a hash of the audio, not the audio itself. It remains a potentially grey area as to whether this database which is derived from the “fingerprinting” of individual songs is an associated work or not. The case has never come into a court because the majors took some equity instead, which seemed reasonable enough at the time, I guess.

The thing that really made Shazam remarkable was that the company name became a verb and changed consumer behaviour. It took ten years and the invention of the iPhone before that could happen. Who would think that you could get a startup to change the way that people behave when they hear a piece of music they have never heard or want to know the name of or buy. When people say that apps can change behaviour overnight they might be right, but it can also still take decades.

It will be interesting to see how quickly Apple can integrate Shazam and turn it to its competitive advantage, but simply directing all queries to a subscription for Apple Music or a purchase of the download from iTunes will drive revenues. The data that Shazam possesses on the geography, time of day and frequency of searches for music will be of enormous added value to Apple too.

Of course, Chris and Philippe are long gone, but Avery and Dirajh stayed the course. From startup to a $1bn valuation and then an acquisition by Apple – that’s quality!