The French music streaming platform had a difficult start on the stock market and lost some 200,000 subscribers worldwide.
The music streaming market may be booming, but Deezer is not yet reaping the benefits. Created in 2007 in Paris, the platform has never made any money. With the exception of a handful of positive quarters, its rival Spotify neither. But it continued to rack up subscribers by the millions while at the same time Deezer was losing some. The service totaled 9.4 million at the end of 2022, or 200,000 less than in 2021. The cessation of activity in Russia, where Deezer had attracted 100,000 subscribers before the war in Ukraine, and marketing divestment in certain countries explain the decline.
Proof that 2022 will definitely have been a very eventful year, Spotify’s competing service has lost nearly 57% since its listing on the Paris Stock Exchange on July 5. A day earlier, Deezer was considered a unicorn. Now valued at 319 million euros, it may have trouble getting back to it. The challenge is great.
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Not enough to undermine the optimism of leaders, who prefer to see the glass half full. Last year, they point out, the group posted a turnover up 13%, to 451 million euros, thanks in particular to increases in subscription prices. Deezer also reduced its operating losses to 56 million euros, against 65 million a year earlier. Encouraging signs that encourage them, despite the tense economic context, to stay the course. “We are aiming for profitability in 2025”, said Stéphane Rougeot, deputy general manager of Deezer. And a turnover of 1 billion euros “in 2025 or a little later”.
Work on differentiation
To pull out of the game, the company, which forecasts an annual increase in sales of more than 10% until then, wants to work on its differentiation. It will thus continue to develop partnerships, such as the one recently announced with the speaker manufacturer Sonos in the United States, or previously with the RTL+ platform in Germany, and DAZN in Italy. “Other discussions are underway”, assures Stéphane Rougeot, who targets key markets such as the United States, Canada, Spain, the United Kingdom and Italy. The range of possibilities remains wide since the partnerships can concern telecom operators as well as media groups, car manufacturers, etc.
The other axis of development for Deezer, which today weighs 2% of the world market but nearly 30% of the French market, is to develop monetization opportunities beyond the catalog of 90 million titles. This involves the broadcasting of concerts in live streaming, the development of ticketing or merchandising of artists, but also the creation of musical quizzes, the translation of lyrics or the identification of a title by humming the melody. So many features that aim to better monetize Deezer’s audience.