Can Shazam become music for retailers' ears?

Shazam
Simon Dawson | Bloomberg | Getty Images

Music app Shazam has made it possible to identify songs when you're out by simply having your smartphone "listen" to a song. Now, as the company expands its music discovery technology, it's also considering delving deeper into the world of e-commerce and retail.

"Shazam in retail could help you keep track of the products you care about, compare prices," said Shazam chief product officer Daniel Danker. "There's a million ideas around it. They all build on the magic of Shazam, which is that dead-simple experience of tapping a button and connecting with the world around you."

Danker explained that Shazam, which was valued at over $1 billion after its last funding round in January, is widening the breadth of what it can do, like developing visual recognition to pair with its audio technology. In the future, that could mean branching out past music to movies and shopping malls.

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"Experimenting in these areas is natural for a product that has fundamentally been about connecting with the world around you," he said.

But image recognition is a tough technology to master, with giants like Google and Amazon still struggling with it, say some analysts.

That may be one reason why privately-held Shazam is also still investing in its bread-and-butter music algorithm. Shazam announced on Monday a new program for artist-led music discovery. Verified musicians—including Pitbull (44.87 million Shazam followers), Calvin Harris (42.0 million followers) and Maroon 5 (30.2 million followers)—can now post songs they are finding through the platform, allowing fans to see what they are listening to.

"It is really interesting to think of these artists not just as celebrities, but as people who are experts in music," Danker said. "If you like an artist, wouldn't you want to listen to things they want to listen to? For us, this is turning a moment of individual discovery and turning those into moments of shared discovery."

Danker said the goal is to deliver a more engaging experience for users. It also provides an effective marketing platform for artists to connect with Shazam's more than 100 million users each month through music. Danker said no monetary deals were made to get anyone on board.

"The better experience (users) get, the more time they spend in the app, the more money Shazam makes," he explained. "It's one of those circles that for us to succeed we have to deliver a really brilliant experience to our users."

In the past, Shazam has facilitated e-commerce. Several TV shows including "American Idol" partnered with the app so consumers could easily purchase the tracks played on the program through a partner service like Apple. In 2011, it partnered with USA Network to allow consumers to purchase through on its app.

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But image recognition technology is in demand, especially as more brands aim to drive consumers towards that quicker, impulsive online purchase, Gene Alvarez, managing vice president of customer relationship management and e-commerce research at Gartner said. Amazon and Google have incorporated image searches into their functionalities.

Companies that might not have traditional retail backgrounds are becoming increasingly interested, especially those that have large audiences. Conde Nast announced in October it would be developing an e-commerce division to aid consumer purchases of the products it writes about. With upward of 20 million Shazam recognition requests a day, the platform has the reach that many marketers desire.

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"Recognition software might move the consumer forward in the process to make that purchase," Alvarez said. "We are seeing a large amount of organizations outside the retail space jumping into e-commerce."

Sucharita Mulpuru-Kodali, a principal analyst for Forrester Research, was a little more skeptical. Even Google and Amazon have only developed limited versions of the technology because of the difficulties with image recognition. Part of the problem is the amount of images of available products out there. She pointed out eBay has 800 million listings.

"I applaud them for the effort but think this is going to be a tough problem for them to solve," she said.

And, one image could contain many products. For example, if a musician is watching a music video, they may be interested in finding out everything about what kind of instruments an artist is using to the clothing they are wearing, Alvarez said.

"An image has 1,000 words, but it also can have 1,000 products," he said. "How do you parse that apart to make everything shoppable?"

Mulpuru-Kodali pointed out that image recognition isn't a simple process, and Shazam hasn't been in that space for that long.

"The idea though, of telling a consumer 'we did audio recognition, now we can do image recognition' is a very easily understandable idea, great for marketing, but really hard to execute well," she said.