Shazam Business Model



What is business model

'The way Shazam started off its business model was that after five SMS 'tags' you had to pay for it,' said Marovac. 'Then it moved into lead-generation for MP3s, then it became an affiliate for. Shazam’s operating loss narrowed in 2018, down to £13.81 million from £17.82 million in the prior year. Thanks to a £157 million bump from the disposal of assets, Shazam turned a net profit in 2018 of £123.95 million, up from a £17.74 million net loss in 2017. Music Business Worldwide. If Shazam had launched in the US, we literally would have had no way to generate revenues. In Europe, we could charge users using Premium SMS for the music recognition service that we were planning.

My relationship with Shazam began way back in the year 2000. I was at party with some friends and a great song came on the stereo. No one knew what the song was so I pulled out my super stylin’ Motorola Rzr, called the Shazam number, and held my phone up to the speaker. After a few moments of listening, a voice on the other end of the line told me the name and artist of the song; it was Creed’s Arms Wide Open. Ya, I was that cool.

This technology, though seemingly pre-historic today, laid the foundation for what has become a billion dollar brand with no ceiling in sight.

Shazam Business Model Canvas

Fast-forward to 2015 and we realize that this app has become a household name for smartphone users. Just like Google, Twitter and Snapchat, Shazam has become a verb. “I’m Shazaming it,” is a statement that most people today have either said or heard and based on the future plans of the London-based company; it’s a statement most people are going to be saying and hearing a lot more.

Shazam the world

With the goal of making the whole world Shazamable the company is in the process of extending its authority beyond the music space and into the ‘everything else’, space – ultimately making Shazam the most relevant discovery app to date and no, they’re not doing it by implementing a QR code revival strategy. Let’s say you’re interested in purchasing a pair of shoes you’re looking at in-store but want more information. Just point your camera and Shazam them to find out if there is other style options or lower prices somewhere else. The same goes for electronics, books and pretty much every other kind of object you can think of purchasing.

To achieve this bold feat of discovery, Shazam is planning on partnering with an array of businesses from publishers to CPG brands in order to bolster its product database. The company also plans to partner with Gimbal, one of the top Geofencing platforms, to add a geo-location feature.

The concept of marrying the physical and digital environments through mobile discovery is not a new one. Apps like Firefly, a mobile object-discovering platform for Amazon’s Fire Phone, and Google’s, Goggles App have been doing just about the same thing for a while.

Model

So, how can Shazam compete with mega-brands like Amazon and Google with a product that is similar to what is already in the market? One answer is usership. What Shazam lacks in differentiation, it makes up for in mobile usage with 100 million active monthly users.

Business Model Example

Additionally, if you look closely at the Shazam product development progression, the model is a perfect example of effective disruptive innovation. At its core, Shazam was founded on a simple vision: Music Discovery. Had it let that mission drive its business model with attempts to make headway in the music industry, it would be competing with giants like Spotify, Itunes and Pandora. Now, Shazam is removing the music label and focusing entirely on Discovery. This may not have been the most obvious move from a consumer perspective, but it is undoubtedly the bigger opportunity.