As rumors swirl of yet more consolidation in the digital music market, a longtime player out of Europe already live in 180 countries is finally making a full entry into the U.S. in a play for more scale. Deezer, an on-demand streaming service that ...
As rumors swirl of yet moreÂ consolidationÂ in the digitalÂ music market, a longtime player out of Europe already live in 180 countries is finally making a full entry into the U.S. in a play for more scale. Deezer, an on-demand streaming service that competes against the likes of Spotify and notably pulled out of an IPO last year, has today taken the wraps off a website and iOS, Android and Windows phone apps that will let all U.S. consumers stream music from its platform, which features 40 million songs and 40,000 podcasts.
But the launch comes at a price, quite literally. Although Deezer offers both free and paid tiers in other countriesÂ like the UK and France, it is bucking the trend of giving users an option of long-term, ad-supported free usage in its newest market.
Instead, after a 30-day trial, consumers must payÂ $9.99 per month to listen to music on demand, as well as get access to services like â€˜Flow,â€™ which builds personalised radio stations for users based on their listening habits, music lyrics (which notably have been removed from Spotify for now at least) and more.
Itâ€™s not the only bold move from the company originally founded in Paris in 2007, with some 6.3 million users at last count. Deezerâ€™s launching in the U.S. without any executive on the ground. Tyler Goldman, who had been the companyâ€™s U.S. CEO (and still indicates as much on his quirky LinkedIn profile), and led onÂ a number of other growth initiatives in North America, quietlyÂ departed the company â€œa few months agoâ€ according to Gerrit Schumann, Deezerâ€™s chief international officer based in London.
Shumann has been leading on the rollout. He added that a new U.S. head is due to start in a few months, butÂ because Deezer had already planned this rollout for this summer, it decided to proceed regardless.
â€œItâ€™sÂ not a one size fits all model for every market,â€ he said. â€œWe were ramping up on the B2C model in the U.S. There were other opportunities to do this, but we didâ€™t feel like the timingÂ was right. Now, in terms of licensing and markets and theÂ demand and our recent funding round,â€ â€” the company raised $109 million earlier this year â€” â€œeverything isÂ coming together.â€
The company is launching relatively late and amidst a lot of other services already live in the U.S. They include Spotify, which first came to the U.S. in 2011 and now has over 30 million paying users globally Â (and many more free ones); and Apple Music, which has 15 million paying users and the advantage of being preinstalled on new iPhones and upgrades of iOS on older models.
But Deezer if nothing if not consistent. Back in 2012, under a different CEO (itâ€™s now Hans-Holger Albrecht), Deezer also speculated that when it launched in the U.S. it would avoid a free tier.
â€œIâ€™m not 100 percent sure we have to use a free service as a recruitment channel in the U.S.,â€ then-CEO Axel Dauchez said in 2012, noting that this can be a very unprofitable route to building revenues especially as a company scales up because of music royalty payments.Â â€œIn some countries there is a difference between doing the most efficient thing and matching the competition.â€
To be clear, todayÂ is not Deezerâ€™s first move to offer services in the U.S. The company has taken a series of small and controlled steps to expand here over the last couple of years, all of them also banked on the belief that itâ€™s better to catch a smaller number of paying users than to pick up scale with an ad-supported free offer.
Deezerâ€™s moves haveÂ included acquiring Muve, Cricketâ€™s (free!) music service, from AT&T, for under $100 million and attempting to migrate those customers to Deezerâ€™s $9.99 paid tier. Schumann declined to say how many eventually made the leap.
â€œTechnically it worked very well,â€ he said (emphasising â€˜technically). â€œWe had a good portion of the people try it out but itâ€™sÂ a different business model and you canâ€™t really compare. There is a conversion to paid â€”Â not all of them but a good conversion.â€ Itâ€™s not clear in real terms what all this means, but he added that there was 200% growth on that service this year.
Deezerâ€™s also partnered with companies like Sonos to expand its service in the U.S., in that caseÂ taking the high road by offering a paid, high-definition service to Sonosâ€™ audiophile users for $19.99. Again, no word from Deezer on how well that offer has gone.
There have also other twists and turnsÂ in Deezerâ€™s U.S. story. The company acquired a podcasting platform, Stitcher, and added its content to the Deezer platform with big plans to carve out a place for itself in the crowded on-demand music market as the place where you can also go for a wide variety ofÂ spoken word content. Stitcher was sold on to Scripps earlier this year in what was described as an acquihire. Indeed, Schumann said Deezer is actually still using content and tech from StitcherÂ in its service.
â€œStitcher was a very vital acquisition for us on the tech and contentÂ side,â€ he said. â€œThe podcasts are still available on Deezer. It was our entry point and we are adding more to the content in terms of talk. Weâ€™ve launched soccer streamsÂ in two markets and will continue to invest in content types.â€
Perhaps most notable of all was Deezerâ€™s attempt to IPO in 2015, which it had to postpone indefinitely after reportedly failing to generate enough investor interest during a roadshow. Instead, the company raised $109 million, and itâ€™s part of this funding that is being used to make this leap into the U.S.
â€œThe funding from existing investors demonstrates that they are really committed and weâ€™ll look at IPO plans in the future,â€ Schumann told me.Â
One thing that the funding will not go towards â€” despite other moves of M&A in the industry right now around Pandora and reportedly Tidal going toÂ Apple Music â€” is another acquisition to build up its audience.
â€œRight now weâ€™re well set up to grow on our own,â€ he said. â€œIn our past we made smaller acquisitions here and there but itâ€™s about growing organically now. There will be further consolidationÂ for sure, and there will be only a handful of global players. There wonâ€™t be 20-30 services five years from now, thatâ€™s for sure, and weâ€™re set up to be a leader.â€
usps usps tracking us bank usaa usa today usajobs us map us weekly usa map uscis