30 August 2005
Shazam focuses on mobile music market and sells certain technology assets to Broadcast Monitoring Inc
Under the agreement Shazam will receive a perpetual worldwide exclusive license for provision of music recognition and associated services for the consumer mobile telecommunications sector. The deal also provides Shazam with working capital to fund accelerated product development and international expansion, enabling the company to provide its customers with increasingly sophisticated services and solutions.
Following a strategic business review carried out by Shazam, the decision was taken to concentrate on consumer services based on the identification and purchasing of music-related products and services. The size of addressable markets and anticipated growth rates of music over mobile, combined with Shazam’s expertise, presented a clear opportunity to drive innovation and create additional revenue streams.
The deal follows BMI’s successful trial implementation of Shazam’s audio recognition technology in May 2004.
BMI has formed a wholly owned subsidiary, Landmark Digital Services, LLC(SM), to own, deploy and exploit the technology that it has acquired from Shazam. Offered under the name of BlueArrow(SM), the technology will form the core of a new system that will, among other things, greatly expand the organisation’s ability to measure the use of music on the radio, television and the Internet, for which it collects licensing fees on behalf of 300,000 songwriters, composers and publishers.
Ajay Chowdhury, Chairman of Shazam said: “Over the last three years Shazam has built a global market leading position in consumer music recognition and sale of follow on products over cellphones. This strategic arrangement with the world’s leading performing rights organisation will provide an excellent platform for the future growth of Shazam.”
Andrew Fisher, Chief Executive Officer at Shazam commented: “This transaction will deliver significant value to our customers and shareholders. We can realise our investment, whilst retaining the right to exploit key mobile markets by enabling people to identify and purchase music-related products and services on impulse. BMI is best placed to ensure that audio recognition technology fulfils its potential in the music and entertainment industry.”
Del Bryant, President and CEO of BMI added: “Pattern recognition technology is the single most promising way to identify music performed on media platforms. Our decision to invest in Shazam’s technology was based on several years of intensive research into competitive technologies. We feel Shazam has developed a superior solution in this field: one which offers incredible accuracy, speed and scalability.”
Shazam will now be expanding its mobile service offering with sophisticated solutions for connecting buyers and sellers of music related products and services. Shazam’s music recognition services enable people to identify any track by simply dialling a shortcode and holding their mobile handset to the music source. Once the track is ‘tagged’, the music clip is matched against the unique ‘fingerprint’ contained within Shazam’s vast database of 2.7 million tracks. The system then sends an SMS with the name of the artist and the track, enabling operators to cross-sell content relating to the identified artist or song.
About Shazam EntertainmentShazam Entertainment boasts a world’s first in music recognition technology. The company’s core strength is audio recognition, based on a technology invented and developed exclusively by Shazam.
Since the company’s UK launch in August 2002, the service allows music fans to use their mobile phone to identify any track using just their handset. More than 3 million people have used the Shazam service to date. Shazam has established a global footprint and has achieved multiple deals with mobile operators and media companies in over twenty countries throughout the US, Europe and Asia.
Shazam’s successes have been recognised through several awards, including: Top 100 Red Herring Award 2005, Best Use of Mobile award at the Imperatives, Best New Mobile Service at the Mobile Choice Awards, Best Innovation at the BT Openworld Interactive Music Awards, Web Innovation of the Year at the Future UK Internet Awards, Best start-up at the Revolution Awards, an Ericsson Mobile Application Award, and the Media Week Response Campaign of the year.
Investors in the company include IDG Ventures Europe (which operates a $100m investment fund within Europe and is part of IDG – the world’s largest IT media company), DN Capital (a leading pan-European venture capital firm with a focus on software and IT companies in the United Kingdom, France, the Nordics and Germany), Lynx New Media (a Virgin & Bear Stearns company), Sir Colin Southgate (former CEO and Chairman of EMI Group), Phil Wiser (CTO Sony Music), and John Preston (former Chairman of BMG UK and BPI).
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