Deezer
French streaming platform Deezer reported on Tuesday it had 7 million euros ($7.6 million) in free cash flow for the fiscal year 2024, having achieved break-even status for the first time in its nearly 18-year history last fall.
Founded in August 2007, Deezer has struggled to build its brand outside of its home market in France. But in recent years, it has raised prices and expanded its subscriber-base by being the streaming platform powering German broadcaster RTL, American speaker company Sonos and Latin America’s version of Amazon, Mercado Libre.
“This is an exciting milestone, and it puts Deezer in control of its own destiny,” Deezer Chief Financial Officer Carl de Place tells Billboard on becoming cash-flow positive. “We have been able to exceed our guidance and to deliver 11.8% growth thanks to a nearly 10% increase in direct revenue from France, and the revenue from our partnerships business, which grew at 24% year over year.”
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A growing number of streaming platforms have raised prices in recent years, and Deezer was at the forefront having raised subscription prices in France, its largest market, in January 2022 and other markets later in the year. After Apple, Amazon, YouTube and Spotify all followed with their own increases, Deezer raised its prices again in September 2023.
The company reported revenue increased 12% to 542 million euros ($590.8 million), above their 10% growth target. Direct revenue in France increased 9.7% from the year ago period thanks to a 4.3% increase in subscriber revenue and greater average revenue per user (ARPU). Revenue from partners white labeling its services rose 24% year over year.
While not a profitable fiscal year, the company said it saw strong improvement. Adjusted earnings before interest tax depreciation and amortization (EBITDA) for the full year was negative 4 million euros ($4.4 million), and a 21.2% increase in its adjusted gross profit to 134 million euros ($146 million), equal to a 24.7% margin. The company had 62 million euros ($67.6 million) cash in its reserves at year end.
The company plans to double-down on its brand partnership strategy, while maintaining focus on further growing its presence in France with new features allowing users to customize their feed on the streaming platform and opportunities to more directly interact with artists, de Place says.
“Profitable growth is what you should expect going forward. We are prepared to continue to deliver positive free cash flow, to reinvest in the company and also add to our reserves,” de Place says.
Deezer, a leading French streaming service, says that roughly 10,000 fully AI-generated tracks are being delivered to the platform every day, equating to about 10% of its daily music delivery.
This finding emerged from an AI detection tool Deezer developed and filed two patent applications for in December, the company says. Now, the service is developing a tagging system for the fully AI-generated works it detects in order to remove them from its algorithmic and editorial recommendations and boost human-made music.
According to a press release, Deezer’s new tool can detect AI-made music from several popular AI music models, including Suno and Udio, with plans to further expand its capabilities. The company notes that the tool could eventually be trained to detect from “practically any other similar [AI model]” as long as Deezer can gain access to samples from those models — though the company also says it has “made significant progress in creating a system with increased generalizability, to detect AI generated content without a specific dataset to train on.” It has additional plans to develop the capability to identify deepfaked voices.
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Deezer is the first music streaming platform to announce the launch of an AI detection tool and the first to seek a concrete solution for the growing pool of AI music accumulating on streaming platforms worldwide. Given that AI-generated music can be made much more quickly than human-created works, critics have expressed concern that these AI tracks will increasingly take away money and editorial opportunities from human artists on streaming services.
Among those critics are the three major music companies — Universal Music Group, Sony Music Entertainment and Warner Music Group — which collectively sued top AI music models Suno and Udio for copyright infringement last summer. In their complaint, the three companies said Suno and Udio could generate music that would “saturate the market with machine-generated content that will directly compete with, cheapen and ultimately drown out the genuine sound recordings on which [the services were] built.”
“As artificial intelligence continues to increasingly disrupt the music ecosystem, with a growing amount of AI content flooding streaming platforms like Deezer, we are proud to have developed a cutting-edge tool that will increase transparency for creators and fans alike,” says Alexis Lanternier, CEO of Deezer. “Generative AI has the potential to positively impact music creation and consumption, but its use must be guided by responsibility and care in order to safeguard the rights and revenues of artists and songwriters. Going forward we aim to develop a tagging system for fully AI generated content, and exclude it from algorithmic and editorial recommendation.“
“We set out to create the best AI detection tool on the market, and we have made incredible progress in just one year,” says Aurelien Herault, Deezer’s chief innovation officer. “Tools that are on the market today can be highly effective as long as they are trained on data sets from a specific generative AI model, but the detection rate drastically decreases as soon as the tool is subjected to a new model or new data. We have addressed this challenge and created a tool that is significantly more robust and applicable to multiple models.”
In fall 2023, Deezer announced it was adopting an “artist-centric” royalty model with Universal Music Group (UMG) in an effort to better compensate acts with significant followings and the rightsholders who own their recordings. That move, intended to tackle fraud and reduce royalties flowing to what is essentially noise and “functional music” was intended to rebalance a streaming model that some major players believe needs reform. Other major labels followed, as did Spotify, which made different adjustments to its royalty model toward the same end.
On Wednesday (Jan. 15), Deezer and the French PRO SACEM announced a deal to compensate publishing rightsholders the same way. “We started a year and a half ago with UMG and then the other majors,” said Deezer CEO Alexis Lanternier. “And now we’re doing it on the publishing side.”
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SACEM’s interest in this idea goes back to an analysis of the potential effects of artist-centric royalty payouts that the PRO conducted last year. “The first thing I wanted was to remove noise from the revenue, especially at a time when dilution is an issue” said SACEM CEO Cécile Rap-Veber, “The second thing is that it helps prevent fraud.”
While Deezer will not remove any music from its platform as a result of this agreement, the service will either demonetize or essentially allocate less royalties to some tracks, by boosting the royalties earned by others. The change, which will take effect soon, could help labels and services better prepare for the age of AI, when music executives worry that online services will be flooded by unpopular, low-value music that cuts into their business with sheer scale. “With AI coming,” Rap-Veber says, “we’re afraid that human creation might be affected.”
Deezer’s specific plans are more ambitious than what it did on the recording side. Like other artist-centric models, artists get a royalty boost for hitting a measure of popularity — in this case, double royalties for songs that are actively searched out or those by artists with 1,000 streams a month from 500 different subscribers.
More interesting, the service will impose what it calls a “user centric cap” that will limit how much the listening choices of any individual subscriber can affect royalty payouts, which will also make fraud more difficult and less efficient. Also, Deezer will completely exclude from the royalty pool tracks that consist of noise and “functional sounds,” such as rain on a roof; instead, Deezer will recommend similar music that it owns, which will not count for payout purposes and thus not take royalties from other rightsholders. (Some of these tracks might not even be considered copyrighted works under EU law, at least on the publishing side. While recording the sound of rain on a roof might arguably involve creative choices, there is no composer in the sense of copyright law.) Deezer will also remove tracks that have not been streamed in a year.
UnitedMasters extended its existing synch agreement with the National Football League (NFL) through the end of the 2027 season. The deal will expand UnitedMasters’ existing track delivery, allowing the NFL to continue providing music to its fans at games and across NFL programming via UnitedMasters’ fully-cleared synch library. Through the deal, NFL Member Clubs will have the opportunity to explore additional licensing packages, allowing them to create “hyper-local experiences,” according to a press release.
Warner Music India made a minority investment in India-based live entertainment and ticketing platform SkillBox, which has worked on tours for Jacob Collier, Steve Vai, Ben Howard and more and established intellectual properties including Bloomverse, K-Wave, Lemonade and LiveBox. “By integrating live events and ticketing into its portfolio, Warner Music India will offer its artists the ability to reach wider audiences, while fans will benefit from streamlined, unforgettable live music experiences,” states a press release. SkillBox, which also boasts an artist management arm called LevelHouse, boasts 1.5 million users.
Music licensing company Soundstripe is partnering with Orfium, Tuned Global, Music Reports and Cyanite to build a “click-to-license” platform for the music business that will offer pre-cleared music, with a full rollout expected for spring 2025. “Through these partnerships, Soundstripe connects several elements of licensing, which have long been separate,” reads a press release. Orfium’s SyncTracker product will ensure that all licensed music has been cleared when a video posts to platforms including YouTube, while Tuned Global will manage content delivery and asset management on the recording side and Music Reports will cover the publishing side. Meanwhile, Cyanite’s AI-driven technology will allow Soundstripe to tag and search music at scale.
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Audacy launched its first FM broadcast station with Super Hi-Fi, a leader in AI-powered radio services for broadcast and digital media companies. From Oct. 31 onward, Denver’s Front Range Country 103.1 will be powered by Super Hi-Fi’s AI-powered platform and toolset, including its program director radio operating system, which manages music curation content, ads, scheduling, voice tracking and station playout tasks.
Streaming service Deezer signed DAX, an advertising exchange from Global, as its exclusive ad sales partner in the U.S. for audio advertising. DAX previously pacted with Deezer in the U.K.
Leading Asian music company Kanjian struck a deal with AI rights management company Musical.AI to provide AI companies with access to its fully licensed music catalog for AI training. According to a press release, Kanjian’s catalog is entirely pre-authorized for AI applications.
Levellr, which helps artists use messaging tools including Discord and Telegram to reach fans, raised $1.75 million in funding from a group of gaming and media industry leaders including Dylan Collins (SuperAwesome, Jolt, Demonware), Mitch Lasky (former Benchmark and Discord board member) and Owen Mahoney (former Nexon CEO), along with senior execs from companies like Krafton, Riot Games and Amazon. The company also announced that Collins will join the company as chairman.
Redeye Worldwide, a leading independent digital and phsyical distribution and music services company (and part of the Exceleration Music family), signed a strategic agreement with Lasgo Worldwide Media to provide physical fulfillmemnt services in the U.K. and Ireland. Additionally, Redeye will consolidate its European Union physical operations through an expanded one-stop agreement with Netherlands-based pan-European provider Bertus, allowing Redeye clients to broaden their sales and marketing reach across Europe. Redeye’s Swedish subsidiary, Border Music, will continue servicing the Nordic markets.
Alt-rock pioneers the Pixies and Tickets For Good, which provides free and heavily discounted tickets to live events, announced a new partnership through which the band will donate tickets to Tickets For Good across the platform’s global network for every date on their upcoming 20-date tour in Europe and North America next year. The partnership includes tour dates that are sold out, giving registered Tickets For Good members an opportunity to gain special access via a dedicated ballot.
Indie music company Anthem Entertainment and Wax Records struck a creative partnership that will focus on “enhancing the relationship between publishing and creative, facilitating a seamless channel for songwriters and artists to produce viable projects,” according to a press release.
AI-powered music and audio technology company Mus.ic.AI is integrating its AI tools into digital asset management and monetization platform SourceAudio. Under the deal, 567,000 active SourceAudio users will be provided with AI-powered stem separation.
Virgin Music Group announced a strategic agreement with Tokyo-based Bushiroad Music, a division of games and anime producer Bushiroad Inc. Through the deal, Virgin will support the expansion of Bushiroad Music’s overseas business through digital music distribution, including theme songs for Bushiroad’s games, anime series and films.
Deezer has appointed Pedro Kurtz as director of operations for the Americas, Billboard can exclusively announce today (Nov. 7). Kurtz—who joined the company in 2020 as head of music in Brazil and served as director of content for LATAM—will be based at Deezer’s Brazil headquarters in São Paulo and report directly to the global team […]
French music streaming company Deezer’s revenue increased 11.0% (13.0% at constant currency) to 134.0 million euros ($147.3 million) in the third quarter, the company announced Wednesday.
That was slightly slower than the 15% growth rate in the second quarter and first quarter but ahead of the 7.4% revenue growth the company posted in calendar 2023.
Partnerships accounted for most of the quarter’s improvement by growing 21% to 41.5 million euros ($45.6 million). Deezer powers music streaming services for such companies as Germany’s RTL and Argentinian e-commerce company Mercado Libre. Through partnerships, Deezer offers its branded service to the likes of DAZN, a sports streaming platform, and Mexican mobile carrier WIM, whose customers get a 20% discount on Deezer Premium.
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Subscriber growth was helped by the conversion of “the first cohort of MeLi+ subscribers from trial accounts to premium accounts with higher margins,” said CEO Alexis Lanternier during Thursday’s earnings call. Also, Lanternier added, the Mercado Libre partnership, which provides 12-month trials, has produced results “higher than our initial expectations.”
Revenue from France was 78.5 million ($86.3 million) and 58.6% of total revenue, down from 59.4% in the prior-year period. The rest of the world generated revenue of 55.5 million euros ($61 million). The “other” category was 6.7 million euros ($7.4 million), up 63.8%, in part due to new verticals such as its wellness app, Zen.
The growth in France and contraction in the rest of the world is part of the plan, said CFO Carl de Place. “The strategy has been to improve the profitability and moving to positive profitability for Deezer, which has made us be more selective in the way we invest, in terms of marketing and making sure we invest in markets where we can see that the return on the investment is positive for for this. So that’s the reason why we are growing in France and over the rest of the world has been declining.”
Direct subscribers represent the majority of Deezer’s business but grew at a slower 4% to 85.8 million euros ($94.3 million). The number of direct subscribers rose 4.1% to 9.9 million; 5.2 million of them came from Deezer’s home market of France while the rest of the world produced 1.8 million subscribers, down from 2.0 million in the prior-year period. Deezer’s subscriber base took a hit because the company removed 400,000 “inactive family accounts,” but the company explained that the move had no impact on revenue and benefitted gross margin.
Despite the positive momentum in the quarter, the company chose to maintain its guidance from the previous quarter. Deezer forecasts 10% revenue growth in 2024 and expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to improve to a loss of 10 million euros ($10.9 million) and plans to have positive free cash flow.
Deezer was among the first music streaming platforms to raise prices in 2022 and did so again in 2023. There will be “potential for price increases” as Deezer continues to “upgrade the experience to add value to the user,” said de Place.
Following the release of third-quarter earnings after the market’s close on Wednesday, Deezer’s share price was practically unchanged, falling just 0.4% to 1.345 euros ($1.46) on Thursday. Year to date, Deezer’s stock price has fallen 36% from 2.095 euros ($2.27) per share.
Deezer’s third quarter financial metrics:
Revenue: up 11% to 134 million euros ($147.3 million)
Total subscribers: up 4.1% to 9.9 million
Direct subscribers: down 1.4% to 5.2 million
Partnership subscribers: up 11% to 4.7 million
Direct subscriber average revenue per user (ARPU): up 5.8% to 5.40 euros ($5.90)
Partnership subscriber ARPU: down 4.7% to 2.80 euros ($3.10)
French music streamer Deezer reported a nearly 15% increase in revenue for the first half of 2024 and raised a key financial target for the year, according to earnings results filed on Tuesday (July 30).
The Paris-based company generated 268 million euros ($287 million) for the six months ending June 30 — up $35 million from the year-ago period — as average revenue per user (ARPU) improved for both direct subscribers and business-to-business subscribers by 6% and 3.5%, respectively.
Deezer executives called it a strong financial performance and said the company is on track to become profitable, as it was free-cash-flow positive in the first half of the year, with around 65 million euros ($70.4 million) at the end of June.
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“These positive results are [due to] strong performance throughout Deezer,” Stu Bergen, interim CEO of Deezer, said in a statement. “Deezer occupies a distinctive position within the music ecosystem,supporting artists, songwriters and rightsholders alike through initiatives focused on transparency, fairness, and innovation.”
Available in more than 180 markets, Deezer’s roughly 10.5 million subscribers was flat from the prior quarter.
The company raised its target for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to a 10 million euro deficit, compared to Deezer’s previous expected deficit of 15 million euros for 2024, and reiterated its target to grow revenue by 10% for the year. Deezer generated 485 million euros ($525 million) of revenue in 2023, a 7.4% increase from 2022.
Last week, Deezer announced that ex-Walmart executive and consumer goods company founder Alexis Lanternier would become the streaming company’s next CEO, taking over from Bergen, who served as interim CEO after the previous CEO, Jeronimo Folgueira, left the company in February following a nearly three-year run in the role.
Lanternier co-founded and developed Branded, a digital-first consumer goods company, and was previously an executive vp at Walmart Canada.
Alexis Lanternier was named CEO of French music streamer Deezer, replacing interim CEO Stu Berger, the company announced Thursday (July 25). Lanternier, who will be based at Deezer’s Paris headquarters, most recently co-founded and developed Branded, a digital-first consumer goods company. Prior to that, Lanternier was an executive vp of Walmart Canada e-commerce and also […]
French music streamer Deezer reaped the benefits of its price increases as its first-quarter revenues grew 15.0% to 132.5 million euros ($143.5 million at the average exchange rate for the period). Average revenue per user (ARPU) also improved for direct subscribers and business-to-business subscribers from partners including Brazilian mobile carrier TIM and French retailer Fnac Darty.
Deezer raised subscription prices in France, its largest market, in January 2022 and other markets later in the year. After Apple, Amazon, YouTube and Spotify all followed with their own increases, Deezer raised its prices again in September 2023.
In the first quarter, ARPU for direct subscribers grew 6.4% to 5.1 euros ($5.50) as the latest price increase was implemented for over 75% of them, while ARPU from partnerships improved 5.5% to 2.9 euros ($3.1). Both ARPU figures have grown considerably in the last two years. Since the first quarter, direct ARPU has grown 13.3% from 4.5 euros ($4.9) and partnership ARPU has improved 20.8% from 2.4 euros ($2.6).
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Partnerships produced most of Deezer’s revenue growth in the quarter. While direct revenue from paid subscriptions grew 5.2% to 86 million euros ($93.1 million), partnerships revenue grew 40.3% to 43.3 million euros ($46.9 million); Deezer provides its streaming platform for its partners’ branded products. The company attributed partnerships growth to a recent deal with Mercado Libre in Latin America, RTL in Europe and Sonos. The company also renewed deals with TIM and Fnac Darty in the quarter.
The first quarter improvement “highlights clear momentum and evidence that our strategy is on point,” said interim CEO Stu Bergen in a statement. “By delivering unique experiences to music fans worldwide, Deezer delivers value and innovation to all our stakeholders. We continue to be a catalyst for positive change, challenging the status quo in remuneration and pricing, while maintaining our unwavering support for artists and songwriters.”
France accounted for the majority of Deezer’s revenue (57.4%), though revenue in the country grew just 8.5% to 76.1 million euros ($82.4 million) from the prior-year period. Revenue in the rest of the world jumped 25.2% to 56.4 million euros ($61.1 million) and accounted for 42.6% of revenue, up from 39.1% of revenue in the first quarter of 2023.
Although a relatively minor player on the global music streaming stage, Deezer has been influential in the music industry’s efforts to make streaming a more sustainable endeavor for musicians. In 2023, Universal Music Group partnered with Deezer for an artist-centric royalty scheme that aims to provide better royalties for professional musicians. Independent rights group Merlin followed in March.
Part of providing better remuneration to professional artists is removing non-music tracks (also called functional music) from the platform and Deezer’s earnings release confirmed the company has removed over 26 million tracks (non-artist content, noise and duplicates) since October 2023. The company also “enforc[es] a stricter provider policy to ensure exceptional quality content and elevate the user experience,” according to the release.
Looking ahead, Deezer maintained its previous guidance given in February: Adjusted EBITDA is expected to be better than -15 million euros (-$16.2 million) — about half of the -29 million euros (-$31 million) in 2023 — and revenue growth is expected at 10%, which would be an improvement from the 7.4% revenue growth it saw in 2023.
Merlin and Deezer announced a new partnership through which Deezer’s artist-centric royalty model will be integrated across Merlin’s membership of independent record labels, distributors and other rights holders. The model, which is currently being rolled out in France, is designed to reward artists and tracks that are viewed as playing a part in attracting and retaining subscribers to the platform while excluding white noise and other types of “functional” audio from the royalty pool.
“We have worked with Deezer to ensure their new model works for the benefit of our members, representing a path forward in ensuring that high-quality music, and the artists who create it, are recognized and rewarded in the manner they deserve,” said Merlin CEO Jeremy Sirota in a statement.
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Added Deezer CEO Jeronimo Foglueira: I’m very happy to see that Merlin and its members are embracing Deezer’s artist centric model and joins us in redefining artist remuneration in the streaming era, to make sure artists are paid more fairly for their music.”
Warner Music India made a strategic investment in Global Music Junction (GMJ), the music and entertainment subsidiary of digital entertainment and technology company JetSynthesys. The move gives Warner Music India a seat on the board of GMJ and expands its partnership with the company, with which it previously struck a distribution deal in 2021. GMJ — which provides services including content creation, events management, innovative distribution, marketing solutions, technical analytics, and legal expertise — is a leader in the music markets for the Bhojpuri, Kannada, Gujarati, Haryanvi and Oriya languages. “This is a significant milestone in the expansion of our presence across India,” Alfonso Perez Soto, president of emerging markets at Warner Music, said in a statement. “Working with the amazing team at GMJ last year not only strengthened our partnership, but enabled us to better support artists from the central regions of India, bringing them the best artistic support that any company can provide, and helping them connect with fans across the country and around the world.”
AEG Presents and LIV Golf announced an exclusive multi-year partnership that will see AEG and its subsidiary, Concerts West, booking musical acts and producing concerts for LIV Golf events globally. Since launching the LIV Golf Invitational Series in 2022, followed by the official kickoff of the LIV Golf League last year, artists including Zac Brown Band, Tiësto, Nelly, Sebastián Yatra and Alesso have performed at LIV Golf events. Starting this spring, AEG Presents and its Concerts West subsidiary will book musical acts and produce concerts for LIV Golf tournaments worldwide, handling talent booking, artist management, show/venue planning, creative development and technical production.
The City of McKinney, Tex., which is a major hub in the Dallas-Fort Worth area, chose Notes Live to build what will be the company’s largest venue yet: the 20,000-capacity, $220 million open-air Sunset Amphitheater. The effort to bring the venue to McKinney was a joint effort between the city, the McKinney Economic Development Corporation and the McKinney Community Development Corporation. Construction on the Sunset is slated to begin late this year, with the aim of opening it in time for the concert touring season in 2026. The project is expected to support more than 1,300 direct and indirect jobs and create $3 billion in regional and local economic activity in its first 10 years of operation.
Audio entertainment platform Pocket FM raised $103 million in Series D funding led by Lightspeed with participation from Stepstone Group. The latest round brings Pocket FM’s total funding to date to $196.5 million. The money will support the company’s push into the U.S. market while also supporting its expansion into Europe as well as Latin American markets in 2024. Pocket FM will also continue to strengthen its exclusive content library and build AI-powered personalized recommendations to enhance the user experience. The company claims to have surpassed $150 million in annual recurring revenue and says the platform racked up more than 75 billion minutes of streaming worldwide last year.
Warner Music South East Europe acquired a minority stake in Slovenian independent label NIKA. The label boasts a repertoire of more than 11,000 songs, including tracks from Big Foot Mama, Koala Voice, Luka Basi, Nipke and Siddharta. The label’s releases are currently distributed through Warner’s indie distribution and label services arm ADA. The deal will allow Warner Music to upstream NIKA’s roster to its international network. NIKA has been Warner Music’s licensee in Slovenia since 1995.
Melissa Etheridge partnered with Gritty In Pink, which powers the INPINK marketplace — a platform, described as being similar to Upwork, where female freelancers in music can find jobs. Through the partnership, female videographers can submit an INPINK listing to showcase their work to be considered for a job capturing and editing content at Etheridge’s upcoming shows in Santa Clarita, Calif., and Thousand Oaks, Calif. Those interested can submit their listings between Mar. 20 and Mar. 28. Etheridge will also serve as a “strategic advisor” for the INPINK marketplace. Prior to the partnership, the singer-songwriter hired an INPINK videographer to shoot her tour last year and ran a photography campaign with INPINK to find a female photographer to take press photos.
ASM Global signed a strategic partnership with King Abdullah Financial District Development and Management Company (KAFD DMC) to lead the operation and management of the King Abdullah Financial District (KAFD) Conference Center in Riyadh, Saudi Arabia. The conference center includes a 1,215 square-meter banquet hall, a 600-seat auditorium and multiple outdoor plazas.
NightEvolution — which owns Ibiza dance music clubs Amnesia and Cova Santa and Amnesia’s in-house night Pyramid — joined forces with Dubai developer Sekoya Management, which owns Dubai venue Soho Garden and its electronic music sub-brands/venues Code, Playroom and Hive. Under the agreement, NightEvolution and Sekoya will present a new events series called Horizon in Ibiza, Dubai and elsewhere.
AI-powered beat and track generator SOUNDRAW drew $3 million in new funding led by Carbide Ventures, along with other investors including mint VC, Ceres, iSGS, SMBC Venture Capital, Deepcore, Kazuomi Kaneto and Paul Rosenberg, CEO of Goliath Artists and president of Shady Records.