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Shazam sounds off on why native video is the best way to monetize its app

Posted Apr 7, 2015

It has quickly become the most reliable way to discover and remember your favorite music, but when the team at Shazam started looking for new ways to acquire users and earn more revenue, they realized that the company had to change its tune.

During a Q&A with AdColony’s Matt Barash, Shazam product manager Rory Partalis noted that the San Francisco-based company has all the hallmarks of a successful startup. This includes a massive user base (more than 100 million actives), a $1 billion valuation, and even the use of its brand name as a verb. The only thing missing, until recently, was a way to integrate advertising effectively.

“The challenge for us in trying to monetize that is that’s a very short user experience, and intentionally so,” said Partalis, who started on the agency side at JWT before moving to Pandora, and later Shazam. “We want people to be able to go in there, hit the button, recognize the song and get out of there really quickly. In order to monetize that, we had to become more of a content player.”

That’s why Shazam has been redesigning its app over the last year and a half – making it more of an entertainment destination than a simple utility. And that means things like letting users take what they’ve learned about a song and stream it in Spotify, or helping them learn more about what else is rising on the charts. Making that transition then opens up a bigger opportunity to build in advertising experiences, as people spend more time in the app, Partalis said.

Native video meets the music newsfeed

A good example of this is a newsfeed where Shazam aggregates everything it knows about a given user and gets them scrolling through details about upcoming concerts, what their friends are ‘Shazaming,’ and what new tracks have been released in their favorite genres.

“Video in general was a really nice transition for us,” Partalis said. “We were seeing all this activity where people were Shazaming stuff but we really weren’t recognizing it. What we found is that people were looking up these big TV events — people were Shazaming the Grammys, they were Shazaming the Super Bowl half-time show.”

That led the company to start making TV commercials “Shazamable,” but in conversations with advertisers, there was an ongoing demand for putting additional TV ads into the app.

Partalis noted: “We didn’t really have a great place for that, but then we realized autoplay would be a perfect fit.”

While most people have probably experienced this kind of experience on Facebook, AdColony has brought autoplay video to mainstream publishers via its Instant-Feed™ product.

“It has all those nice native elements that you would expect to see, whether it’s display or video, but with that nice autoplay capability,” Partalis said.

For more on Shazam’s move into native video, you can watch the full clip on Digiday’s Vimeo channel.

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