Spotify appears to have leapfrogged Deezer to become the No.1 source of streaming music subscriptions in France.
This is big news in the region: since launching in 2007 and striking a long-standing partnership with telco Orange, Deezer has remained the market leader in the country.
Yet according to Electron Libre, citing industry sources, Spotify pulled ahead of Deezer as No.1 in France last month in terms of its local subscriber base. (Quick bit of context: at the close of 2018, Deezer had 7 million paying subscribers worldwide, with a total active user base of 14 million; at last count, at end of September 2019, Spotify had 248m active users worldwide and 113m paying customers.)
However, these subs numbers don’t quite tell the full story.
According to data revealed in local trade body’s SNEP’s half-year report, Deezer paid out 37.5% of all money generated by streaming in France for the three major record labels in the first six months of 2019. (Total streaming revenues for the record industry in this period stood at €138.1m.)
“We’ve seen the news that Spotify has more subscribers than Deezer in France. We continue to be the leader in the French music market both in terms of total revenues and our contribution to the French music industry.”
Hans-Holger Albrecht, Deezer (pictured)
Spotify was significantly behind Deezer in this regard (see below), claiming 25.2% of streaming revenue payouts in France, with Apple Music on 13.4% and YouTube (including its online video platform) on 8.8%.
The figures represented market growth, in a sense, for Deezer, because in the prior year its share was 37.2%.
Such statistics speak to the controversial topic of declining Premium ARPU at Spotify – i.e. the average amount each of its subscribers pay vs. its competition.
Speaking to MBW in response to the news that Spotify now overtaken Deezer’s subscriber count in France, Deezer CEO Hans-Holger said: “We’ve seen the news that Spotify has more subscribers than Deezer in France. We continue to be the leader in the French music market both in terms of total revenues and our contribution to the French music industry.
“Not bad for a challenger company with a team that’s a fraction of Spotify’s, all in all.”
Deezer, which is majority-owned by Len Blavatnik’s Access Industries, raised a $185m funding round in August last year, after which is launched in the Middle Ease and North Africa.
In the Middle East, the firm has an exclusive arrangement with Rotana Group’s music catalog in place.
Speaking of Access Industries’ majority-ownership of Deezer… MBW has been digging around in the filings of Warner Music Group – the world’s third largest music rights company.
As a result of Warner’s 100% ownership by Access, WMG reports the amount of revenue, each year, it receives from Deezer for the 12 months to end of September (WMG’s fiscal year).
In FY2019, that figure was approximately $49 million, up on the $39m paid by Deezer to WMG in FY2018 and the $36m paid in FY2017.
Furthermore, Warner revealed in its latest annual filing: “In connection with these arrangements, (i) [WMG] was issued, and currently holds, warrants to purchase shares of Deezer S.A. and (ii) [WMG has] purchased a small number of shares of Deezer S.A., which collectively represent a small minority interest in Deezer S.A.”Music Business Worldwide