2013-06-03

Co.Labs

Why Shazam Is A Force For Good In The Music Business

As old music giants rip people off, Shazam is generating tons of legitimate song sales and introducing features that blow minds.



If you’re still paying for tickets to see live shows, pat yourself on the back: You’re a supporter of yet another declining part of the music industry. Even Justin Bieber had to cancel a show in March due to empty seats!

Unfortunately, however, Ticketmaster doesn’t seem to care too much about ticket-buying music fans. Last month, the company settled a $23 million class action lawsuit in federal court for their sketchy "rewards program," which offered little to no perks and a lot of hidden costs.

Here's what they did: After buying a ticket online between September ‘04 and June ‘09, Ticketmaster customers were immediately enrolled in a rewards program that cost $9 a month—reportedly with no signup notifications. Plaintiffs in the case argued they were unaware of the fees (which were charged to the credit or debit card used for their ticket purchase). Ninety-three percent of those who enrolled in the program didn’t redeem any of the online coupons offered by the rewards program. When all was said and done, Ticketmaster’s fooled patrons paid about $85 million—or $75.89 each—for the program….taking the average person eight months to cancel the ongoing payments.

Again, Ticketmaster?

This isn’t the only time a class action lawsuit has been filed against Ticketmaster. In 2012, consumers accused the company of profiting from bogus processing fees and were entitled to a refund of $1.50 per ticket (for up to 17 ticket orders).

Customers affected by the deceiving rewards program are entitled to a refund…kind of. In the spirit of continuing to screw over musical patrons, Ticketmaster’s refund only returns up to $30 to each customer. And if too many people sign up for this refund, payout may be even further reduced because the settlement caps payout at $23 million (including $4 million in legal fees). Let’s do that math, or at least the easy part of it. The average customer is out $75 bucks and will only be returned $30. That’s less than half what they are owed. Also, since Ticketmaster made $84 million from the scandal, they're still turning a profit.

Music fans and musicians alike are tired of much-hated, rarely innovative companies like Ticketmaster exploiting and depersonalizing their love for the arts. Buyers despise the hefty service fees and surcharges while artists resent the monopolization of the market and their inability to obtain contact information for their fans. Unfortunately, the 2010 Ticketmaster/Live Nation merger leaves little alternative. Even StubHub and TicketsNow are owned by the giants—TicketsNow by Ticketmaster and Stubhub by eBay. It's an ugly, impersonal business.

Shazam, The Model Citizen

The days of robust fees, overpriced music, and hidden catches might be far from over, but new inventive music entities like Shazam seem to have the right idea. Around the same time Ticketmaster was increasing its infamy, Shazam announced that their music discovery app is responsible for one out of every 14 paid song downloads. Last week, when comparing Shazam’s yearly gross of $300 million to worldwide download stats, Digital Music News estimated the company contributed a total of 7.2% of the $4.1 billion global gross of downloaded tunes.

If you’re unfamiliar with Shazam, the app (which ranges in cost for free to $4.99 a year) uses your smartphone’s built-in microphone to record a short sample of any music being played, then compares that sample to a central database to find a match. Once your match is found, information about the artist, song title, and album appear on your screen as well as links to purchase the music.

The rate at the Shazam team is innovating is incredible. On May 23, the company released a feature called "auto-tagging" that lets your iPad listen and log every song that's playing around you, whether it's at a bar or on the TV across the room. After songs are identified, they're automatically sent to a queue in the app. The coolest part of this update is its ability to run in the background of whatever you’re doing, regardless of other open apps—it literally captures the soundtrack you're living in.

Shazam EVP David Jones says he expects Shazam's share of song purchase conversations will double every year. Make it easy for fans, give them features and experiences that truly amaze them, don't rip them off, and yes! People will actually pay for music.

Jackie Shuman (@jackieprobably) is a music supervisor and the East Coast Director of Platform Music Group. She specializes in film, television and commercial placements for independent artists.

[Image: Flickr user Jason Empey]




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