Deezer On Pace to Become Bigger Than Spotify in 2014…

passinglane6402

Deezer isn’t even in the US, but they’re already the second-largest on-demand subscription service in the world.  And, arguably, on nearly equal footing with Spotify and in the passing lane.

According to details just disclosed by Deezer CEO Axel Dauchez, the company now has five million paying subscribers.  That is more than double the number from last year: in October of last year, Deezer passed two million.

Which means that Deezer is now adding more than a million paying subscribers every 4 months, roughly double the pace of Spotify.

Deezer is also in 180 countries, all part of a ‘save America for last’ strategy that means Deezer is first in many far-flung countries.  That is a strategy fraught with complications, but it’s also giving Deezer a faster growth rate, and arguably, more momentum when they finally hit America.

Now, compare that to what’s happening at Spotify: Back in March of this year, Spotify announced its sixth millionth paying subscriber, though the pace is definitely slowing.

It only took Spotify three months to go from five to six million, but it’s taken more than seven months (at least) to reach seven million.  Deezer is accelerating; Spotify looks to be decelerating.

Part of Deezer’s growth is happening through bundling: the company now has 25 telco relationships throughout the world, with 11 most recently added (and yes, that introduces some counting questions).  But the biggest factor here could be cash: Deezer’s playing with a recently-invested $130 million, with Russian billionaire (and Warner Music Group owner) Len Blavatnik betting gigantic.

By comparison, Spotify has nearly $300 million invested, but has burned through nearly all of that.

 subscriptionnov2013

 

 

24 Responses

    • Sequenz_

      It depends on the service tier they offer. And it depends on the amount of streams that are generated in a particular period or quarter. PC only service pays roughly USD $0.0023. The PC + mobile service pays roughly USD $0.0027 per stream. The Ad funded service something between USD $0.0005 – USD $0.001 per stream. This is on the publishing side.

      Reply
      • GGG

        Right, I guess I meant if there was an avg range, like Spotify seem to be .0034-.008 depending on your label status. So these numbers are a bit lower at the moment. Thanks.

        Reply
  1. Adam

    What makes you assume Spotify are still below 7m and what would cause their growth to slow so dramatically?

    Reply
    • GGG

      I can’t speak to their numbers, but Spotify’s marketing has sucked since their invite-only, we’re super hip campaign early on. Once that went away, they did like nothing else. So there’s been nothing to counter the Spotify sucks sentiments that go viral in online music circles. They need to fire whoever’s incharge of promo/marketing and hire people who actually do work.

      Reply
      • Faza (TCM)

        I don’t think any amount of promo/marketing will change the “Spotify sucks” sentiment in the music community, for the simple reason that it sucks. Demonstrably so.

        On the other hand, I don’t think that the sentiment in the music community has much effect on the average listener – and potential Spotify subscriber – for the very simple reason that most folks aren’t part of the music community.

        Deezer’s got better growth rates at the moment because:
        a. they’re available in more countries, by an order of magnitude
        b. they’re partnering with telcos, which means subscriptions bundled with telecom plans – a wise move, since it doesn’t require the potential subscriber to decide whether they need a subscription and the cost is rolled in with a larger bill. Once you’re on such a bundle you can probably opt out if you find you don’t use the service, but it might be seen as more trouble than it’s worth.

        In short, Deezer is playing the game smart, while Spotify is playing it dumb. Apparently they got so caught up in the “Spotify is the future” hype from a couple years back that they now cannot get their heads around the fact that they’re gonna need to make some changes and fast, before someone comes and eats their lunch.

        (Aside: I have my doubts about paid streaming’s long-term future in any case. Why pay for the limited catalogue of Spotify – or Deezer – when you can play any song you want on YouTube for free? And that’s before we get into Grooveshark and other overtly pirate sites.)

        Reply
        • GGG

          I agree with pretty much all of this, though I think you underestimate the music community’s size and power in terms of spreading early adaption. Mostly because many average listeners are now “musicians.” It’s not about working in the industry, it’s just about being a creator, which is any random person nowadays. For every Spotify debate/discussion I’ve had with a band/manager that has substantial fans and actually earns money, I’ve had 5 more with some random person who has 3 songs on soundcloud and Bandcamp and can’t bring more than 7 people to a gig unless it’s at an open mic. And besides Thom Yorke, the strongest anti-Spotify sentiment I’ve seen comes from people who wouldn’t be making money even if every single fan of theirs bought an $18 CD.

          Reply
    • Paul Resnikoff
      Paul Resnikoff

      OK, maybe they’re already at 7 million, but then where’s the announcement? Quite plausible that there’s a lag in the threshold vs. the announcement of that threshold, but c’mon: are they going to wait 5, 6 mos. to make that announcement?

      Highly unlikely. Which means, Spotify is almost certainly slowing down. Deezer is speeding up.

      Reply
  2. john

    that’s wonderful but guess what? currently my band makes about 900 a month on spotify and maybe at best 100 a month from deezer on our best month from them… scale means nothing really lots of these companies love to hype up huge ass fake attraction for themselves by hyping inactive digital corpse user numbers and this may be an example of that. I’ll be real fuckin surprised if deezer is paying 900 a month a year from now.

    Reply
  3. Stu

    Hmm, this seems a bit of a flawed theory based on the assumption that because Spotify hasn’t announced new subscriber figures since 6m, it hasn’t yet passed 7m.

    Don’t you think it’s more likely the company is holding off until 10m, skipping the small milestone announcements in favour of the big one? I’ve seen this before (Rovio did a similar thing with Angry Birds in the run-up to 1bn downloads of that, for example).

    The comparison between Deezer and Spotify is fun though. Deeper added 3m subscribers in 12 months, so that’s 250k a month on average. If Spotify had kept pace with Deezer since announcing 6m in March, it would have 8.25m by the end of 2013.

    In other words, if Spotify reaches 10m subscribers by the end of 2013, it’ll have been growing much faster than Deezer. So we should wait and see.

    Reply
      • Stu

        I sense the reason companies duck out of announcing every million milestone is precisely so the likes of us can’t have more fun speculating about them 😉

        Reply
      • Calle

        When I was in Stockholm last week I heard Spotify people talking about 10 million subscribers soon.
        Let’s wait and see

        Reply
  4. vmixengineer

    I truly prefered Spotify’s selection and features, but have since joined on as a Deezer customer due to the international availability and high quality streaming at the lower price point. I wish Spotify would offer some higher quality options at their lower tier options.

    Reply
  5. TuneHunter

    Well all of this “new frontier” of streaming and iRadios does not add up to 25 millions generated by XM. It will be still under 25 millions with unlisted on this chart AllAccess and iTunesRadio.
    Considering that average subscription is at 6 to $7 range we need 500 million subscribers to generate 40 billion dollars in revenue. (..and sub prices will only go down as we enter less fortunate markets)

    With heavy promotion and brain washing it might happen by 2025. At that point iTunes and Amazon music should be gone and all other sources, including advertising will deliver at the most additional 10 billions.
    Wow! 50 billion dollar industry – not even 75% of inflation adjusted 1999.
    The only conclusion is that we are burning resources and implementing wrong political system on music industry.
    We are not in Medieval period but very close to some type of communism and it will not work well for musicians.

    There are mature resources and technology on hand to have $100 billion dollar industry by 2020.
    Lets wake up!

    Reply
  6. Jonas357

    @Paul Resnikoff – The figures announced by Deezer are NOT true, they do NOT have 5M paying or paid subscriptions. Any label receiving a reporting of its sales from Deezer can confirm this point. Please make a very simple research…………./

    Reply
  7. Jonas357

    @Paul Resnikoff
    I did of course. As a professional I know that the figures at Spotify are by far more reliable. And you like Spotify or not – their so-called business model is crap but they are clean at least with their announcements and their reportings.

    Reply

Leave a Reply

Your email address will not be published.

Verify Your Humanity *