Shazam Entertainment Ltd., a company that offers a music recognition service for mobile phone users, has signed a two year-deal with the European music division of Germany's Bertelsmann AG and is in talks with German mobile operators to launch its service.
Under the deal, Bertelsmann Music Group Europe (BMG Europe) in Güthersloh, Germany, will grant Shazam the necessary copyright licenses for the entire BMG catalog, including music from Artista Records, RCA Label Group and J Records, to use 30-second audio clips of BMG music, the London company said Monday in a statement.
In May, Shazam signed a deal with the Association of Independent Music (AIM) in London to acquire copyright licenses to use clips of music from its catalog.
Shazam has developed what is believed to be the world's first real-time song identification service, currently available in the U.K. but targeted to all major mobile markets worldwide.
"We are in talks with German operators," said Claus Nehmzow, director of international development at Shazam. "They're showing a lot of interest because they see an opportunity to generate incremental revenue without any significant investment."
The service works like this: When customers hear a song they like but can't identify, they simply dial a short code (2580 in the U.K.), hold their handsets to capture the music (for example, holding up a phone to a radio), wait 15 seconds while Shazam's patent-pending technology listens to the music and then receive a SMS (short messaging service) identifying the track and artist. Shazam refers to the identification process as "tagging."
The technology is based on a pattern recognition-software algorithm developed by Avery Wang, the company's chief scientist. The algorithm selects the salient characteristics of the song, or its "fingerprint," by paring the musical sample down to the barest information necessary to make a positive identification and speed the processing time. Then it matches that fingerprint against a database comprising over 1.5 million songs.
A new service, which requires the support of music groups like AIM and BMG, allows customers to go to their personalized Shazam Web page and listen to a 30-second clip of an identified song or send a clip to a friend's mailbox. This person, in turn, is notified via SMS of the "songmail."
All tagged songs are available on the personal Shazam Web pages of customers who can also purchase CDs directly over the site.
Although the music industry has grown tough on digital rights protection, it generally views Shazam as a means to promote its products without having to give them away for free, according to Nehmzow.
Mobile operators, too, are showing interest because a premium wireless information like Shazam's keeps users on the phone and isn't cheap: In the U.K., the service costs £0.50 (US$0.49) per identified song. Revenue is split between the operators and Shazam. Nehmzow declined to provide the percentage split.
The four major U.K. operators offer the service: O2 (UK) Ltd., Orange Personal Communications Services Ltd., T-Mobile UK Ltd. and Vodafone Ltd.
Shazam has attracted venture capital from IDG Ventures Europe in London, Lynx New Media Ventures in London and FLV Fund CVA in Ieper, Belgium.