16 MusicWeek 15.11.13
BUSINESSANALYSIS SHAZAM IN Q3 EDITORIAL
Shazam rises as downloads tail off
As download’s sales curve on the graph grew ever higher year after year, Shazam’s one followed immediately after it, their fates seemingly intertwined. Well, that is certainly not the case anymore. While the sun is at least partially setting in 2013 on the one-
track digital market with year-on-year sales dropping in both the UK and US after a decade of expansion, the music identification service is showing absolutely no signs of plateauing. Against a 3% fall in UK download unit sales in Q3, Shazam’s
tag numbers over the same period shot up by an extraordinary 64% year-on-year. It was a similar story for the UK-headquartered service globally with Shazam subject to a jaw-dropping 1.7 billion tags between July and the beginning of October, nearly 690 million more than occurred over the same period in 2012. Shazam is still doing its bit to drive download sales with an
estimated 8-10% of all tracks tagged turning into digital purchases, while that activity is fuelling the UK company’s own turnover as it gets a 1% commission fee from the likes of iTunes and Amazon for every track bought in this way. But with download numbers having peaked, at least for the moment, Shazam’s continued forging ahead is happening less and less in tandem with that market.
“Against a 3% fall in UK download unit sales in Q3, Shazam’s tags over the same period shot up 64% year-on-year”
One of the service’s clear routes forward is in building closer
links with the world of streaming, illustrated by the likes of a deal it has with US-based Rdio in which it can offer full streams of a tagged track. That can only drive more revenue for Shazam as well as additional business for Rdio. For the download, its fate is very much at the whim of
consumers and how they choose to access music, but as an identification service Shazam is a lot more future proof. Consumption habits may change, but the curiosity of what you are listening to will remain, meaning fans will continue to turn to Shazam whatever platforms they are using. It is little wonder then its CEO Rich Riley was earlier this year contemplating a $1bn plus price tag for his company ahead of an expected stock market flotation in 2014. Additionally, music is now only one element of what Shazam
offers with an ability to identify the likes of TV programmes and ads as well, but it remains at the very heart of what the company does. Those strong bonds with music are emphasised by the
incredible commonality between what gets tagged on the service and what then end up as the biggest sellers. In Q3 six of the 10 most tagged tracks and top downloads in the UK were the same, including in Avicii’s Wake Me Up and Robin Thicke’s Blurred Lines an identical top two. A glance of the most popular streamed tracks reveals a similar
line-up, yet again demonstrating Shazam remains the perfect hit predicator of what music gets listened to – in whatever way. And with its numbers continuing to head skywards, that position is only likely to grow stronger in the future.
Paul Williams, Head of Business Analysis Do you have views on this column? Feel free to comment by emailing
paul.williams@intentmedia.co.uk
www.musicweek.com
AVICII STORMS SHAZAM CHART
Swedish DJ tops global tags on service in third quarter EXECUTIVE SUMMARY
DIGITAL n BY PAUL WILLIAMS
A
vicii’s rise to global superstar status was underlined in Q3 by Wake Me Up being tagged nearly 10 million times by Shazam
users globally. The track’s 9.7 million tags in total easily made
it the service’s most popular release overall across the three months, while it also led most of the leading music markets’ individual Shazam charts, including the UK, Germany, France, Italy, Canada and Australia. In the US it was only outscored by Robin
Thicke featuring TI and Pharrell Williams’ Blurred Lines - which had been the most-tagged track worldwide during the previous quarter, and retained enough demand to rank at No 2 on Q3’s global countdown - plus Lorde’s Royals. Prior to Wake Me Up, Avicii (pictured above) had been behind a handful of other big download
n Avicii’s Wake Me Up Shazam’s most popular track globally in Q3 with 9.7 million tags n Avicii most tagged track in UK as well as at Shazam’s German, French, Canadian, Italian and Australian services n Tag numbers up by 64% globally year-on-year to 1.7 billion, while increasing by similar figure in UK to 79.3 million n 51% of Shazam UK’s quarterly Top 100 by Universal artists with Sony on 20%, Warner claiming 14% and indies 15% n Calvin Harris again most tagged UK act in US, while also top in France and Canada with Naughty Boy leading in Germany, Italy and Australia
hits in the UK, mainland Europe and some other markets, but this track took him to a much higher commercial plain, including in the US delivering him his first ever Top 10 hit on the Billboard Hot 100. Shazam’s role in fuelling this rise is confirmed
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