updated 04:27 pm EDT, Thu August 15, 2013
Actual price of takeover estimated between $10-15 million
Apple's recent buyout of video discovery service Matcha was about getting the company's recommendation engine, which is based on a proprietary algorithm, sources indicate. Matcha is in fact said to have been picked up right after it "found the answer" -- with algorithm refinements -- to user growth and time spent in-app. User acquisition and engagement was allegedly the specific appeal to Apple, which found that Matcha did a better job than competing apps.
The sources note that the deal took place before Matcha's shutdown in May, and was worth far more than has been rumored. While some early claims put the pricetag at $1 to $1.5 million, Apple is said to have actually spent at least eight figures, more likely an amount between $10 and $15 million.
The Matcha app let users scan multiple services -- such as iTunes, Netflix, HBO, and Hulu -- to find appealing shows and movies. Apple's plans for the technology are unknown, but it could be used to help people sort through content on the Apple TV and/or the iTunes Store. iTunes now has a substantial video library. The issue, though, is that renters and shoppers are usually left to sort through genres, top charts, and pre-picked categories, rather than selections based on their tastes.