Google just acquired Songza, the music streaming company for an undisclosed amount. Previous reports pegged the deal at $15 million. But now there are reports of $39m sale. This is a strategic move for Google, as it continues to trail behind companies like Spotify, Apple, and Pandora when it comes to music curation.
There is an interesting reason why Google is behind in this race, Music doesn’t respond to search algorithms, Google’s key strength, the way simpler media like words or images do. It’s easy to program software so that it recognizes matching words or strings of text. Its magnitudes harder to program software that can listen to audio, code it correctly with the right attributes and then make those attributes discoverable either in a search or as a stream of similar songs as Pandora does.
Songza CEO Elias Roman told that his 40-person team will be incorporated into Mountain View-based Google Inc. Google told the Journal it may incorporate Songza’s technology into its current music app, Google Play All Access Music and the forthcoming YouTube paid streaming music service it plans to launch later this summer.
Google already has a few streaming music products like its Google Play store, Google Play Music All Access premium-subscription service and of course YouTube. But all of those offerings lack strong curation. Meanwhile, Google is also reportedly working on a Spotify-like music offering, powered by YouTube. Buying Songza could help beef up Google’s music offerings overall.
Songza only has 5.5 million monthly active listeners, while Spotify has over 40 million monthly active listeners. Those figures demonstrate that Google wants Songza for its curation rather than for its listeners.
Apple recently acquired streaming music service Beats Music in a deal worth $3 billion. When news of the deal broke, Apple executives noted that the strength of Beats Music’s curation played a role in the decision to buy the company.
Songza is relatively similar to Beats Music in that it plays music for you based on your mood, location, who you’re with and what kind of music you feel like listening to. This morning, Songza suggested playing music for ‘The rainy weather’, ‘waking up happy’ and ‘singing in the shower’.
Launched in 2007, Songza raised a total of $6.7 million in funding. Investors in Songza include Amazon.com, Metamorphic Ventures, Deep Fork Capital, William Morris Endeavor, Geoff Judge, David Hirsch, Scooter Braun and Gary Vaynerchuk. Songza has around 5.5 million active users, but it is unknown how many pay for Songza’s $0.99 weekly ad-removal subscription service.
Songza’s platform searches for the perfect songs to complement specific activities, a different approach from Pandora or iTunes Radio, which organize playlists by articles or songs. It claims 5.5 million users, a much smaller number than Pandora’s 70 million or iTunes Radio’s 40 million, according to the article.
New York-based Songza raised a total of $6.7 million since its founding and is backed by Amazon, Deep Fork Capital and Justin Bieber’s manager, Scooter Braun.