The company may pay as much as $400 million to buy the music recognition service.
(CCM) — Apple is planning to make a swoop for music recognition app Shazam to try to help it close the gap between its Apple Music streaming service and market leader Spotify, according to a BBC report. Apple will reportedly pay about $400 million for the eighteen-year-old company, significantly less than the $1 billion it was valued at in 2015 during its last funding round.
UK-based Shazam is used by more than 100 million people every month and makes most of its money from commissions paid by Apple every time the app refers users to Apple's iTunes store to buy songs that the app has identified. The app also refers users to rivals Spotify and Google Play Music.
If Apple does acquire Shazam it may stop referring users to rival music services, and it will also no longer have to pay commissions for referrals to Apple Music.
The deal would also help the Apple Music service gain ground on Spotify by making it easier for users to find songs and add them to playlists, the BBC report says.
It adds that Spotify has about 60 million users worldwide, while Apple has signed up just 27 million users to its Apple Music service.
Image: © Shazam.