UK

Shazam CEO Rich Riley On How He Got Carlos Slim's Backing And His Own Music Tastes

30/08/2013 17:40 BST | Updated 09/10/2013 16:39 BST
Shazam

Shazam, a mobile-phone based music identifying application, quickly took off as a global music app phenomenon after its 1999 start, developed by Chris Barton, Philip Inghelbrecht, Avery Wang and Mukherjee, in London.

The app uses the phone's built-in microphone to scan music playing and recognise the track from its audio "imprint". If a match is found, further information can spring up on the artist, song title and where to buy it, with potential links to iTunes, Youtube and Spotify. Recent additions include tracking where the person heard the song and the data Shazam collects has got so extensive that it can track the popularity of a song around the world.

After September 2012, Shazam raised $32 million in funding, later attracting $40 million in July 2013 from Mexican telecoms giant Carlos Slim, who is the second richest man in the world.

Shazam's new CEO Rich Riley came on board from Yahoo with the task of guiding the entertainment firm onto the stock market in a flotation. With Shazam turning over more than £20 million in 2012 in the UK, the prospect looks like it could happen in the next few years.

HuffPost UK spoke to RIley about how he wooed Carlos Slim to back Shazam, his own musical tastes, and when the company could make its stock market flotation.

How is Shazam planning to grow over the next few years?

We continue to have a strong brand that is known, loved and associated with magic around the world. We just crossed the 350 million user mark and 70 million monthly active user mark. We're adding 10 million users per month. We have 15 million Shazams, or tags, per day - that is more than 3 and a half billion a year.

Most of those drive directly into revenue growth. We sell music and so we sell over 500,000 songs a day which was over 300 million dollars a year and that is a major revenue stream for us.

The other one is advertising where we sell ads within the apps with which the more people spend more time, the more inventory we have to sell.

We want to expand that range around music and artists and want to be a place where you'd go to Shazam anytime, even when you might not be listening to music, you'd go to Shazam to see what music people are listening to or what your friends are listening to.

We think we have clear leadership in our category and for many consumers around the world, shazam is a verb and any direct competitors are not very relevant these days.

How did you get Carlos Slim on board?

We were introduced through one of our existing investors Kleiner Perkins, as one of the leading venture firms on Sandhill Road in Silicon Valley. For us, the Slim investment in partnership was just a very natural fit from the start.

carlos slim Mexican telecoms giant Carlos Slim had been the richest man in the world since 2010 until Microsoft founder Bill Gates overtook him earlier this year

The Slims are very large players in telecoms and mobile and understand mobile entertainment and media throroughly so it was a very natural fit for them to think it was a smart investment and for us to focus on the commercial lpossibilities of Shazam in terms selling advertising in Latin America, and all the things we could do together.

I can tell you that Slim bought a combination of primary and secondary shares. Not all of Slim's $40m dollars went to Shazam, but some of them went to buy shares from existing shareholders. That is all we can disclose.

shazam

A plaque beneath a framed gold 12 inch vinyl record marking the 'One Billionth' identified piece of music in Shazam's London HQ.

How big is Shazam's music library?

More than 30 million tracks. We add more than a million per month to the catalog and we're always looking at by country how successful we are in returning the result when someone Shazammed, and so that is one of the ways we find opportunities for us to acquire more music. It really varies.

Recently we added some music from the Middle East. We're interested in a lot of music from Asia right now, and you continue to work with record label around the world to make sure that every time a new album or track is released that we get it into our catalog as quickly as possible.

We view it as a very strategic asset of ours and have teams that focus on ingesting as much music as we can around the world - so a million tracks a month. That helps us point to where there are potential gaps in our coverage or opportunities for us to acquire more music and it's a real strategic focus of the company.

With all this exposure to music, what do you enjoy listening to?

I like everything! I've been listening to Maroon 5, Snow Patrol and a lot of different things. I also listen to things like Jay-Z, from a workout angle. I grew up in Texas so I've also got a thing for country music. So if I'm hanging out on the weekend with a barbeque going, there's a decent chance that country music will be playing from the speakers.

Have you got better at recognising msuic?

I have! I have been to many record labels where when you walk in, there is a lot of pictures of artists and so you get to have some trivia in terms of do you recognise these artists and also in preparation when you walk in you've got to know what you're talking about, so it has pushed me to expand my knowledge of what's popular.

What are your plans for floating Shazam on the stock exchange?

We want to continue to grow our number of consumers and we want them spending more time with us, more engagement and of course we'd be trying to increase our growth rates.

Our ambiiton is for revenues to grow well north of 50% per year and for user growth to be even faster than that. We love the idea of floating, it is a very motivating ambition for us. It's entirely consistent with building a great business that is built for the long-term to be one of the great mobile internet companies.

We'd like to think it would happen within three years. I generally think a one to two year horizon. Just far enough out to be super specific but in the not too distant future.