Spotify is the megaton streaming service that just can’t figure out how to go public. That’s because Wall Street can’t figure out how Spotify makes money.
So, why is Deezer, a streaming service in Spotify’s shadow and a non-presence in the US, planning to go first?
Let’s see how this one goes. According to details confirmed by the globally-oriented streaming upstart, IPO plans are definitely in the works — in France, that is. “Streaming is the future of the music business and we are just at the beginning,” Deezer CEO Hans-Holger Albrech told a group of journalists.
“For now it is about accelerating our growth with the IPO.”
Deezer isn’t Spotify, but it does have 6 million subscribers across 180 countries. It also has some familiar financial issues: according to documents now disclosed, Deezer’s revenues ballooned 41% in the first half of 2015 to €93 million, or $103.6 million at current exchange rates. But the company still remained in the red, with a €9 million loss.
Then, there’s the issue of subscribers. For Spotify, deadweight non-paying subscribers are a major issue, though that seems less the case for Deezer. The company indicated that our of its 6 million ‘subscribers,’ 3.7 million brought in 92 percent of the revenues. Advertising raised just 3.7 percent of the revenue total.