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Name that tune...the rise of Shazam
Q&A: Shazam CEO, Andrew Fisher

By Natasha Lomas

Published: Thursday 12 June 2008

Q&A: Shazam CEO Andrew Fisher on...

... keeping up with the music scene
"We hire people from record labels or who are DJs or they manage bands - they are in the industry so to speak - to work on our music team. These guys know so much about music... they live for the passion.

"We have relationships with labels where they give us the content. It's all automated - it comes in digital feeds and it goes straight into the database - but we also have people that go out with satchels and will literally pick up vinyl.

"We have record decks in our office where we encode the music - so they'll come back with 20 pieces of content and it'll get encoded, digitised and put onto the database. We also have people in other territories who do that for us. So in Latin America we have Latin American specialists, in Asia we have specialists. That's one of our USPs so we work really hard at that."

... the Facebook plug-in
"Shazam's evolved from a pay-as-you-go service to a subscription model and what we're doing is we're putting more value into the proposition to encourage people to continue with their subscription on the mobile device.

"So an example of that would be [the Facebook app]… When you ID a song on the mobile, that song immediately will come up on your Facebook profile... but it will also come up on all of your friends' pages as well… First of all, that changes behaviour in the service but it also completes the whole virtual model of you finding a song you like, you buying the song or interacting with the song, and then you sharing it with your friends - and instantaneously people can start seeing your activity on Shazam via Facebook. And that builds the viral effect.

"[Facebook users] can then listen to a 30-second sound-clip of that song and they can then buy it - from iTunes if they like - so you're really dovetailing into the whole social networking environment in that respect. And that's very important. Because what we found is people are now ID-ing songs because they want the kudos of being first to ID it. And it's actually making their profile look cool and hip."

... the death of the iPod
"The mobile phone will become the portable music device… over time MP3-players will become obsolete. They will have the back channel, they will be wirelessly connected and they'll probably have some voice capability - which is exactly what Apple's done with the iPhone.

"And if you look at the phone manufacturers and their shipping volumes this year some manufacturers are forecasting between 70 and 90 per cent of all of their units going out will have a music player on the device… Low-end phones will have music players on them and… at that point you've got a billion devices going into a marker with music capabilities - and that's going to completely outstrip the MP3-player market. It will happen.... Apple have seen it. Apple is just very good at managing their product lifecycle."

... the trouble with mobile advertising
"The issue about mobile advertising is the rates are very high at the moment - around three times as high as the internet - so you can get $30 per thousand for example on mobile advertising. There's not the installed base or the reach into the market for the advertiser to design a really large mass-market campaign.

"The advertising community is really experimenting with mobile advertising at the minute and then you've got this chicken-and-egg scenario where they've not ear-marked a large proportion of their budget therefore you can't go out and really build the inventory for them and so you're having to build the inventory ahead of time and then the advertising community will come into the space once it's matured.

"But there's just not that much usage - that many page views - to monetise right now relative to something like the internet for digital advertising. So it will come through in time but it will take a while to get there."

... the promise of location-based services
"There's lot of scenarios that we imagine would be very compelling to consumers. ID-ing a song and being able to understand that there're other people who have a similar taste in music to you who have ID-ed the same song on that Friday evening and they're in the same vicinity as you in a bar around the corner - so connecting people together through music is very very compelling.

"But also connecting people's music tastes independently is also very compelling - I've tagged The Killers and there's a similar group playing in the bar up the road tonight and I'm made aware that actually there's a live performance tonight…

"Nobody's really come out and demonstrated where the innovation's really going to come on location-based services - that's going to be one thing to watch and comment on. I think there'll be some creative genius in terms of how people extend their services.

"The only caveats are… it's very disappointing when you sit with a carrier and you talk about location-based services and they say well that's ages away. And that's what they said five years ago. Yet Nokia's bought Navtek for $8m so Nokia obviously feels differently to that.

"So this mindset that this stuff's really complex and it's all at the network level… I think that's not helpful in terms of the innovation. Those are the things that will really drive data services onto the mobile device."

... the future of music in a digital age
"My personal belief is that within two years' time most music will be free. And you can see that with the deals that Nokia's done with Universal Music - on certain devices they're giving away free music. And the important thing is whether you own the music if you change phones and I think that will come.

"The whole music industry is changing - it's more about the artist as franchise… People are quite happy to pay £35 to go and see Prince at the O2 but quite frankly he probably made more money out of the Daily Mail with the deal he did to give his album away for free than he would have done if he'd put it into retail... Doing 21 days at £35 multiplied by 25,000 people is actually far more lucrative for Prince and commercially it's much more savvy for him to do that than he would have done if he'd tried to sell his CD on Amazon at £6 or £7 a go.

"Music is a $30bn market and if that becomes free of charge then that's going to have to transition to all the associated products and peripherals around music like live performance etc. So the industry's going to go through an evolution and the phone manufactures could actually drive or accelerate that evolution because they can afford to absorb the costs of driving this sea-change in the market."