Warner Music Group's announcement that it has entered into a strategic collaboration
with Shazam is the latest example of traditional music labels embracing social data
to reinvent the way they do business. The deal lets Warner access Shazam's proprietary
music data, which includes information for each time its 420 million users trigger its
app to identify a song. That could include the time of day, the song being identified and,
if users enable location tracking, the place where the song was tagged.Warner would
use the data to help find promising, unsigned artists. With intense competition to find
the next Lady Gaga or Katy Perry, labels look anywhere they can to find an edge. Today,
data has become the latest tool for artist discovery, and companies like Shazam, The
Echo Nest, Gracenote and Next Big Sound are finding themselves in a position to
deliver that information. Lyor Cohen's 300 Entertainment, for example, recently signed
a deal to access Twitter data for a similar purpose.
What's unusual about Warner's arrangement is that it is also developing a Shazam
branded label. The deal calls for Shazam and Warner to split the revenue from music
released by artists discovered through Shazam and signed to the label. The terms of
the split were not disclosed.
Shazam, which was founded as a mobile app that can identify songs quickly developed
into a data and research company that has expanded its technical capabilities to also
recognize television shows and movies. Its app is used to identify about 500 million
pieces of content a month, or roughly 16 million a day. The British technology company
has a reference database of more than 35 million songs and is adding about 1 million
new tracks a month. In addition, Shazam has employed a team of several dozen people
who scour music venues throughout the world to capture new and local music in an effort
to make its database as comprehensive as possible.
Warner and Shazam have already worked together in the past to use the app as a
promotion and marketing tool, for example, in getting the word out about Chromeo's
"Come Alive" video, which premiered Jan. 30.