Shazam names that tune, drawing in money and users

Name that tune
Name that tune   

After more than 15 billion "Shazams," the company that makes the popular music identification mobile application is now worth more than $1 billion.

Founded in 2002, Shazam is the app that "listens" to music playing, and—within seconds—finds both the song title and the artist for users to download immediately.

In an interview with CNBC's "On The Money," Shazam CEO Rich Riley says the company is "proud to cross that [financial] milestone." In explaining its "unicorn" valuation of more than $1 billion, Riley points to Shazam's numbers.

He says the app has been downloaded to mobile devices 500 million times, has 100 million monthly active users and is adding 10 million new users monthly.

"There's huge potential in a platform like ours ... and that's what drives these valuations."

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Going public, or staying private?

Rich Riley, chief executive officer at Shazam Entertainment Ltd., speaks during the Open Mobile Summit in San Francisco, on Wednesday, Nov. 13, 2013.
David Paul Morris | Bloomberg | Getty Images
Rich Riley, chief executive officer at Shazam Entertainment Ltd., speaks during the Open Mobile Summit in San Francisco, on Wednesday, Nov. 13, 2013.

Will Shazam go public or become a takeover target?

Riley tells CNBC that Shazam is "certainly trying to build a great standalone company, and I think Shazam could be a great public company." He adds they have a "great business model around advertising and partnering with brands around the world." Those qualities would bode well for the company to remain independent.

At the same time, he adds, "we do think there are a lot of potential acquirers, and that could make sense too. So we'll see what happens."

Riley cites Facebook, Twitter and Uber as examples, telling CNBC that "there's been enough evidence that big companies can be built very quickly."

"People realize that the world is changing fast, and mobile is a big part of that. Shazam is one of the biggest 'mobile-first' brands."

Now Shazam is expanding beyond sound to sight. The updated version of the app not only "hears" music, it can also "see" objects and images.

Users can "Shazam" visual content from partners, including Target, Time, HarperCollins and Disney.

Last week, the company launched a partnership with Disney's "Tomorrowland," which featured a Shazam icon on movie ads and posters. Those linked users to exclusive interactive content.

Riley explains, "You can wave your phone over that ad, and we take you to 'Tomorrowland' in seconds."

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Shazam can also "read" those black and white QR codes without using a separate scanning app.

Shazam says it drives more than 400 thousand digital song sales daily. They state that's about 7 percent of all downloaded music, globally.

"Our business model historically is selling a lot of music," Riley said. "We sell hundreds of thousands of tracks a day for Apple, Amazon and Google."

This week Apple announced Apple Music, a new subscription-based mobile streaming service. Riley wasn't clear on how Apple's move away from iTunes sales will impact Shazam, but was optimistic that the relationship wouldn't change much.

"Apple is our largest global partner … we do a lot with them. We're very excited about their new music offering and hope to continue to be big partners for a long, long time."

In the U.S., Shazam is currently the No.14 iPhone app and the No. 22 app on all smartphones, according to ComScore data. Mobile users frequently switch between download solutions, but Riley says Shazam's place on smartphones and tablets has been fairly consistent.

"One number that's not changing," Riley tells CNBC, "is the number of apps people use. They use less than 25 apps, and we're one of them."

"On the Money" airs on CNBC Sundays at 7:30 p.m., or check listings for air times in local markets.