Why the Apple-Shazam Deal May Be Delayed
Probe may take more than three months
Apple’s (AAPL) deal to acquire Shazam may drag on for months before closing or fall apart as EU (European Union) authorities step in to review the deal. The EU’s competition agency is expected to look into the potential competition implications of Apple acquiring Shazam.
Whereas the EU’s probe could last more than a month, if any further investigation is needed, it may take more than three months to complete. The EU could block the deal if it sees a major problem. The EU’s review of the Apple-Shazam deal was prompted by some EU member countries raising concerns over the deal’s potential impact on their music industries.
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Austria leads call to probe Apple-Shazam deal
At least seven EU member countries, led by Austria, petitioned the EU to investigate Apple’s proposal to acquire Shazam. Other countries in support of the probe include France, Italy, Sweden, and Spain. Spotify, Apple’s main rival in the online streaming music market, is headquartered in Sweden.
Shazam provides song recognition services that allow people to identify tracks and artists based on an audio sample. Users can then proceed to purchase the track or stream it from online music services such as Apple Music, Pandora (P), or Spotify. Apple has more than 30 million paying Apple Music subscribers, while Spotify boasts over 70 million paying listeners.
Apple incorporating video
Apple Music is one the service businesses whose revenue the company wants to double by 2020. Apple is incorporating videos into its music service as part of making it more attractive to drive service revenue growth. However, Apple’s video venture may see it competing with the likes of Netflix (NFLX), Amazon (AMZN), and Facebook (FB) for high-quality digital videos.