Shazam Limits Free iPhone App, Adds $5 App

Shazam, which names songs by listening to a clip that’s playing on the radio or stereo, is one of the most popular cellphone applications to date — and one of the rare few to turn a profit. It’s been downloaded more than 10 million times and has sold out its inventory of advertising space, according to maker Shazam Entertainment. After listening to and identifying the song that’s playing, Shazam also links to iTunes, taking a cut from the fee people pay to download songs from Apple.

However, Shazam says it makes most of its money by selling the app to paying customers, such as on BlackBerry smart phones or through deals with carriers such as Verizon , chief executive Andrew Fisher said.

“When we started, we charged for the product,” he said, adding that the free iPhone version was a “departure.”

Shazam had hoped that mobile advertising and iTunes downloads would sustain the free app, but with the recession, that has not happened. The company is now fixing that detour by tacking on a $5 charge (like all paid app downloads from its App Store, Apple keeps 30% of the charge). Mr. Fisher says mobile advertising was one of the first victims of the recession, and he doesn’t expect ad rates to bounce to levels to sustain free apps for at least two years.

A free version of Shazam will still remain on the iPhone, but it will only name up to five songs a month. To get more, customers will have to cough up for the premium edition. Existing Shazam users, however, can keep using their free, unlimited versions.

“Historically, people have been conditioned to pay for applications,” Mr. Fisher said. He said he doesn’t know how many people will download the premium version. It adds music recommendations, top-hits charts and a search feature to look up a song by name or artist.

[via Wall Street Journal]

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Free iPhone Apps to Make Money More Easily Thanks to Apple

Apple said Thursday that it will let iPhone application developers offer their users the option to buy additional content or features within a free app on its App Store.

App developers said they received an email notice from Apple informing them that the in-app purchase feature was now available for free apps and that it would “simplify your development by creating a single version of your app that uses in App Purchase to unlock additional functionality, eliminating the need to create Lite versions of your app.” A spokeswoman for Apple confirmed the news.

The in-app purchase feature, which was first introduced in March, allows developers to offer fresh content for purchase within an app such as new levels in a game, additional books in an e-book app, or expanded capability in productivity apps. The caveat, however, was that the feature was only available for paid apps, which meant that developers had to charge at least 99 cents.

Developers say that the latest announcement helps in two ways. First, it makes it much easier for them to make a business out of free apps. Until now, developers sold ads within their free apps or tried to convert users to a paid version with more content.

[via Wall Street Journal]

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Free iPhone Apps To Help You Save And Find Hot Deals

We’ve been testing some of the many iPhone applications that aim to help you save and manage money. Banks are developing a growing number of apps for the iPhone, but we’ve focused on some free, nonbank offerings.

Here, some of our favorites:

Mint offers a version of its popular budgeting tool. We like it because, like the Mint.com site, it puts all your accounts — checking, savings, loans and investments — into one place. Users can get a real-time snapshot of their financial lives and set up alerts should accounts run low. This one is handy to consult before making purchases.

SnapTell uses the camera feature of the iPhone to snap pictures of books, CDs and videogames to comparison shop online. This application can accurately identify a book by its cover and links you to reviews and prices from Amazon, eBay and other retailers. We saved $10 on a Philip Roth book because SnapTell showed us that a cheaper used copy was available online.

Yowza!! combines a Global Positioning System with coupons, popping up coupons for nearby retailers. Good idea, but it needs some work — we found only the same Container Store offering week after week in a robust Manhattan shopping district. However, we later found some coupons for a complimentary sample-size shampoo at a nearby Kiehl’s. The application also tracks your cumulative savings.

[ via Wall Street Journal]

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