All three of the major music labels – Universal, Sony and Warner are believed to have bought stakes in music recognition service Shazam, which is quickly becoming one of the most valuable sources of market trends in the industry.
According to the Wall Street Journal the three bought stakes valued at $3 million each, giving them just over 0.5 percent shares in the company according to the most recent valuation of $500 million.
The Shazam app identifies the artist and title of a song while it's playing and subsequently gives an insight into what tracks listeners are actively engaging with and trying to find out more about. It's the 'I don't know what this song is, but I like it' mentality that makes the Shazam data so valuable.
Overseas Shazam regularly uses its trends to predict break out artists and successfully picked Gotye as a one to watch for the summer of 2012. Earlier this year they tipped Melbourne's Vance Joy as one to watch, alongside the likes of Action Bronson, Sam Smith and Banks.
Even though Warner has a deal in place with the company to sign acts to a jointly-owned label, Shazam's industry prominence is not as widely recognised in the Australian market. They recently opened at office in North Sydney, however.
The three equal label stakes in the privately owned, London-based company were bought from UK-based fund Acacia Capital, Billboard reports. Shazam is understood to be preparing for an initial public offering, which could bring large windfalls for the labels' investment.
Universal's 14 percent stake in Beats By Dre headphone makers and Mog (now Beats Music) streaming service owner Beats Electronics could also prove lucrative if Apple's rumoured $3.2 billion acquisition is confirmed. As well as the hardware assets, Apple would pick up an on-demand streaming platform to compliment iTunes Radio and, crucially, music industry executive Jimmy Iovine.
