Shazam’s Matching Algorithm Can’t Identify Any Money

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Shazam’s just-filed annual summary (source: UK Companies House)

Despite a monstrous 120 million app installs, 20 million requests daily, a leading position in music recognition, and approximately $150 million in investor financing, Shazam Entertainment is still hemorrhaging cash.

According to paperwork just filed with the UK Companies House, Shazam counted $55.5 million (£36 million) in revenue for the most recent fiscal year, but $22.8 million (£14.9 million) in annual losses.

Shazam remains the biggest app for instantly identifying songs playing practically anywhere: bars, clubs, restaurants, parties, wherever.  It’s fantastic technology and an ever-improving algorithm, which would explain a massive, and continued, expansion in users.

But while user stats are exploding, the financial situation seems to be imploding.  Shazam recently switched its fiscal year calendar, though the last full-year filing featured losses of $3.08 million (£2 million) on revenues of $47.8 million (£31 million).  See the problem here?  A huge part of the financial deterioration may be tied to plummeting iTunes download numbers, with Shazam traditionally earning handsomely from affiliate fees.

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It was the perfectly-lucrative hand-off: right after a successful song match, Shazam was sitting on the most targeted potential buyer possible.  In a presentation given by Shazam in May of 2013, the company claimed responsibility for generating $300 million in annual download sales.  That worked out to approximately 1 out of every 14 paid downloads across iTunes and Amazon, a figure that has undoubtedly plunged in the past two years as streaming has surged.

In an effort to better pay the bills, Shazam has expanded that capability into other forms of media, like television.

6 Responses

  1. Remi Swierczek

    There is much bigger Shazam called GOOGLE!
    This one advertising drunk and unless we enlighten it, to obvious to an imbecile, bigger money in music Shazam and music industry will be screwed!

    We can have $100B discovery moment based industry before 2020 if we force legally with new fair use act all 30 music and lyric ID boys to sanity. Google is today the biggest roadblock but at the same time the best executor and the biggest beneficiary of new music future. In 2025 Google can draw more revenues from $200B global music industry than from more and more competitive every day digital advertising. Era of Facebook advertising giant is already here so there is a chance for Google’s legal cement to change the terms of engagement with internet and MUSIC. It is overdue.

  2. Me2

    Another digital media business model operating at a loss. Hint: If it loses money, quarter after quarter, year after year, then at what point does the realization dawn that it just doesn’t work?

    Maybe next year huh? Just give it some time.
    So we’re going on 10 years now of blowing bubbles.

    The best thing for the music distro future sounds like one big POP!

  3. maugarza

    Haha Welcome to Slim Telmex / Telcel modus operandi. Simple, report losses to avoid payment.

  4. A feature, not a company.

    As Paul Said, it’s fantastic technology, but is it a real company with long-term potential? Google has a very similar service which is basically just as good, Shazam’s ideal scenario is to be absorbed by a larger company but at this rate of fundraising they are essentially pricing themselves out of an acquisition which can only end badly.

  5. Willis

    Settle down, everyone. Give this company/service time. It’s only been around since 1999.