Apple acquires Shazam and obtains essential data to develop its products

You may have heard…

Apple’s purchase of Shazam has had everyone talking this week – for a good reason. It’s likely a move which will help the company collect more data on people’s music interests, which will be undoubtedly useful in improving the Apple Music service.

What can Apple gain from acquiring Shazam?

Since its launch, Apple Music has used free trials to top Spotify in monthly unique users, showing its wide-reach potential. However, Spotify still dominates the music streaming market. A key factor to its success is Spotify’s sophisticated Discover feature. Offering a tailored music streaming experience, Spotify has managed to unlock highly relevant artist recommendations for users, a feature that has been instrumental in converting subscribers into super-users.

Now, with the purchase of Shazam, Apple will have a lot more data at hand to build out its understanding of user tastes, and potentially start competing with Spotify for a similar discovery feature and algorithm.

This isn’t the only way that Apple is leveraging data to grow its products…

Apple is clearly leveraging the ‘right kind’ of data to help the sophistication of its product, and there’s been another interesting development this week which shows how serious Apple is about building out its own content – the launch of a standalone Apple TV app (previously the Videos app). This app allows users to search for any programme of which Apple will provide search results of where users can watch it.

This is an interesting move which Apple has been building up to since the launch of iOS 9, with the introduction of a more useful Spotlight Search. With Spotlight Search, app owners could index their content and offer a new avenue for their content to be discovered. Search results would surface content from within an app, even without having the app on their device at the time. For example, if a user searched for “hotels in the UK”, the Airbnb app may surface in the search results – even if the user does not currently have Airbnb downloaded.

However, this capability has never expanded outside of the US, possibly because users weren’t aware it even existed or just because they didn’t feel the need to use the feature very frequently. So, Apple has made the feature more prominent with the launch of a standalone app. However, there is a strong indication of its narrowed focus on TV and programming. It’s no coincidence that this will give Apple a tonne of data on which programmes users are interested in watching, just as they’re beginning its journey into developing its own shows. This data is imperative in going up against established competitors like Netflix or Amazon.

What does this mean for other programming providers?

Well, this creates a double-edged sword for programming providers. They will undoubtedly benefit from the increased discoverability of their programming through the Apple TV app, but it will be at the cost of Apple utilising their data. This is particularly tricky as Apple could be considered a competitor to them. It will also present an interesting conversation on whether Apple should be using its power as an OS provider to collect such in-depth user data on other providers’ content.

With an opportunistic approach to edging above its competitors in the entertainment space, a question of ethics arises. Should Apple leverage its access to viewing habits as a distributor and a content creator in the same space? Acquiring Shazam has been a strong indication that Apple is not afraid to monopolise to develop the sophistication of its Apple Music service and only time will tell if the same applies with the development of its original TV shows that is exclusive to their customers.

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