Carlos Slim’s America Movil Pumps $40 Million Investment Into Shazam
Shazam, the maker of the popular mobile app that uses an audio technology to help users identify songs and TV shows, has received a $40 million investment from Latin American wireless giant America Movil. As part of the deal, Carlos Slim’s Mexico City-based company will work to pre-load Shazam onto mobile phones in the regions in which it operates, said Shazam CEO Rich Riley, the Yahoo veteran who was hired as CEO in April.
The investment consists of a “substantial secondary element,” though Riley refused to disclose how much of the investment happened through a secondary sale. It is believed that early employees and investors — who had shares in the 11-year-old company prior to its first venture investment — were the sellers in the secondary offering. Shazam has now raised $104 million in venture funding, with contributions from Kleiner Perkins, Institutional Venture Partners and DN Capital.
Riley said the company has substantial funds in the bank and will use the new infusion to make its app more of a destination for music fans, expand its TV partnerships and look at possible acquisitions.
While Shazam gets a cut of the $300 million in affiliate music sales its app users purchased in the last 12 months, it is focusing a lot of energy on pitching TV advertisers on its service. This is a tricky proposition, though.
The beauty of the main music-discovery feature of the app is that it allows you to get the name of a song you simply can’t identify in another way. But when you are watching television, you can most likely identify the show (or can simply click “info” for that information) and commercial you’re watching, so it’s not nearly as serendipitous of an experience. Still, Shazam is trying to make this transition by delivering additional content about both shows and TV commercials to the mobile app.
Yet it’s nearly as simple for a person to just Google an advertiser or type in a URL if they really want to act on that commercial right then and there. In that way, Shazam for TV has similar challenges to the rest of so-called second-screen apps: Twitter and, to some extent, Facebook have started to dominate the online conversation around television programs and commercials, leaving limited market space for other players.
Riley’s answer to this predicament is that brands should be advertising on Shazam in addition to these services, that there’s a population that discovers on Shazam that doesn’t do so on social networks. Advertisers can customize their Shazam campaigns to deliver any type of content they want when a viewer “Shazams” a commercial.
Shazam has 70 million active monthly users globally and 17 million in the U.S. It’s not clear what percentage of that total are actually using it while watching TV.