When free music identifier Shazam, one of iPhone’s flagship apps, launched a paid version in November, many existing users would have been forgiven for being annoyed by a new five-uses-a-month limit on the free old counterpart.
But, one month on, the $4.99 (£2.99) Shazam Encore is #2 in iTunes paid music apps chart, the same position as was occupied by the free equivalent. It’s a freemium strategy that appears to be working. Shazam CEO Andrew Fisher won’t detail numbers but tells us: “The uptake of Encore has exceeded our expectations.”
Why did Fisher go paid? “We’re moving to this freemium model,” he says. “iPhone was the first time Shazam was made available free of charge to users. We wanted to converge on a standard pricepoint (across handsets). We’d had more than 120 reviews on the app store – when we read them, a lot of people said ‘we don’t understand why they don’t charge’ – so we saw value in that.”
What proportion of free-to-paid would Shazam like to see? “It’s too early to say,” Fisher says. The company will today announce a targeted Christmas iPhone discount, to $2.99 (£1.79), to drive subs.
Shazam is looking promising. Already profitable before 2009 began and available in over 150 countries, it ends the year having achieved its target of building an impressive 50 million users, and Fisher is sticking to the aim, detailed to us in May, of doubling that in 12 months.
“We’ve been achieving 500,000 new users every week since January,” Fisher says.
And he’s not shying from October’s talk of an IPO. “Before now, I’d have said it’s not appropriate for a company the size of Shazam. But for us now, given the size we’re at and the opportunity we see in front of us, once you exceed 100 million users, you are significant.
“We see us as having one percent penetration of overall market of five billion handsets – so there’s a huge opportunity and there’s still a lot of work to get done. We’re focused on providing to all handsets including low-end and middle-tier.”
How will Shazam get there? Fisher hints at additions to the app’s feature set and roll-outs on more new handsets in the new year. “We don’t see a property that connects up the totality of the user experience.”