Shazam Goes Back To All-Free On iOS

Music identification service Shazam is reintroducing unlimited tagging to its original free app, as it fends off growing competition and seeks balance between free and paid.

The Android version of the free app reintroduced unlimited tagging in April courtesy of an eBay (NSDQ: EBAY) sponsorship. Shazam’s other platforms are expected to follow.

The reintroduction is funded by a big ad buy by Capital One. “All of this is possible due to the increasing maturity of mobile advertising and the strength of Apple’s iOS ecosystem,” CEO Andrew Fisher says. “Because of these essential improvements, we can make this fundamental change to unlimited usage in our free app.”

It also makes it more likely Shazam can earn bigger bucks from affiliate music sales. Currently, users tag four million tracks a day – eight to 10 percent of which convert in to actual track purchases, made by clicking directly from the app to affiliate partners like iTunes Store.

Shazam says its users purchase digital music worth $100 million a year in this way, from a billion tags per year.

Shazam, which started as a dial-in service in 1999 but which began to rocket only with the arrival of apps, introduced a freemium strategy in November 2009. It added a $4.99/£2.99 annual subscription app called Encore and limited the number of “tags” makeable by users of the free app, which remained in place.

Despite the free throttle, Shazam Encore had proved popular. At one point, it was riding as high in app charts as the free Shazam itself. Now Encore’s second annual renewal phase is imminent. Encore’s ranking in iOS’ Top Paid Apps and Top Grossing Apps lists has plummeted this month as Shazam soft-launched the revised free version, according to AppData.

Encore will remain available despite today’s change; it carries song lyrics in its premium subscription.

Shazam is basically trying to build multiple revenue streams, and is finding the balance between each. It will shortly bring to the UK TV tagging, which it has been offering to U.S. broadcasters and advertisers as a way for viewers to engage with their brands by pointing their mobile at the TV.