The question is whether streaming services are adding enough paying customers quickly enough, at a financial rate that makes sense. Enter Deezer, which is second only to Spotify in worldwide paying subscribers, and just announced its four millionth paying subscriber.
Which sound absolutely great, except that it took far longer for Deezer reach its four millionth, than it did its third. This is what the company’s million milestones now look like.
Increasingly, Spotify is looking like the lead horse in the crowded streaming subscription race. In December of last year, Spotify announced its five millionth subscriber, only to careen past six million by SXSW in March. Of that, more than one million are Americans, second only to Muve Music.
But Deezer hasn’t even launched in America, despite recent investments of more than $130 million. Instead, the company is purposely avoiding the United States, based on the idea that America is too expensive, and too hyper-competitive to make sense right now.
That often translates into lots of little launches in lots of little countries, an approach whose ultimate success remains speculative. But despite stronger gains, Spotify’s model is just as sketchy: according to calculations shared by industry researcher Mark Mulligan, more than 70 percent of registered users – for both Spotify and Deezer – are inactive zombies that never return.
Of that, just a tiny sliver convert to longer-term, paying relationships, even with hundreds of millions in investment to attract and drive those conversions.