Shazam Launches $4.99 iPhone App, Cripples Free Version

Shazam Entertainment has just launched a new music identifying app for the iPhone titled Shazam Encore, which is now available in the App Store for $4.99, and as a result of this, the free Shazam iPhone app has been crippled to only allow you to identify up to five songs per month.

According to The Wall Street Journal, the move to a paid version simply had to be done thanks to a slumping economy. Shazam Entertainment’s chief executive Andrew Fisher stated that the company just wasn’t making enough off of in-app advertisements and iTunes downloads to sustain its current business model.

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.

Fisher further backed up that statement by saying the company makes most of its money by selling the app to paying customers on other platforms or through deals with wireless carriers.

But Shazam Entertainment isn’t just limiting its free app to get customers to pay for Encore, they are also trying to sweeten the deal by adding features to the paid version. Shazam Encore contains all of the free version’s features, such as the ability to share tags through a variety of services and purchase music directly through iTunes, but it also features a new interface, many speed improvements, music recommendations, hot and popular music charts, the ability to search for music by artist, album, or track, a drive and tag mode that makes it easier to discover music while the device is docked, and, of course, unlimited song tagging.

What do you folks think? Are the new features, improved speed, and improved interface enough to get you to drop $4.99 on what could be considered a novelty app? Or are you just going to stick with the free version since you get five tags per month anyway?