Half of Deezer’s ‘Subscribers’ Haven’t Played a Single Song In the Last Month

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Spotify rival Deezer is now planning a major IPO in France, yet the process of going public is exposing some very unflattering details.  The biggest is that roughly half of Deezer’s ‘subscribers’ are actually bundled into mobile plans are entirely inactive, if they even know they’re subscribed.

Specifically, 3.34 million of 6.34 million total are classified as ‘monthly inactive bundle users,’ who are technically generating some revenue but aren’t really users.


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Dig deeper, and the numbers get even uglier.  Of the remaining 3 million that are actively using Deezer, just 1.54 million are paying the actual, full subscription price.  That might explain why Deezer has never produced a profit, though losses could be easing.  According to the disclosure, losses for the first-half of 2015 were €8.97 million ($10.02 million), narrower than €12.82 million ($14.36 million) at the same point last year.

The disclosures bode poorly for a streaming music sector, and could weigh heavily on Spotify’s stalled IPO on Wall Street.  Spotify has fewer bundled mobile deals, but the number of subscribers paying cut-rate or introductory rates is rumored to be high.  Deezer’s paperwork also shows monstrous payouts to major label partners, which account for 67 percent of songs played on the service.

That undoubtedly mirrors the situation at Spotify, with major label negotiations apparently delaying the company’s IPO timetable, according to sources.

Deezer’s full IPO financial disclosure is here.


Top image by Boby, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).  Middle image from Deezer’s IPO disclosure.

10 Responses

  1. re: Spotify IPO

    I can’t keep track if this site is pushing that the majors are major stakesholders and pushing for an IPO ASAP, or if they are trying to kill Spotify’s free tier (and, thus, value) via the licensing renegotiations.

    • Adam

      And are streaming payments “monstrous” as mentioned in this article or minuscule? So confusing.

        • Paul Resnikoff

          Let me answer these questions as best as I can, based on the intelligence I have.

          First, the major labels are in active re-negotiations with Spotify, and yes, they do have equity shares. But, they want to (a) maximize their licensing return, (b) minimize the damage of freemium, and (c) maximize their IPO/liquidation event returns. As you can see, it’s difficult to reconcile or balance all three.

          That said, the holdup in re-negotiations, and the high likelihood of limited, one-year renegotiations, is making it difficult for Spotify to IPO and draw substantive value.

          And the payments, yes, are monstrous from the perspective of a potential Wall Street investor, but also from the financial viewpoint of costs. Streaming services aren’t profitable for a reason.

  2. Anonymous

    And people wonder how Deezer can pay out higher rates than Spotify. Because half of the users paying for the service (directly or indirectly) are not listening to anything. Their money still gets pooled and paid out to rights holders.

    All this just proves Deezer is a joke though. Entirely propped up by their partnerships.

  3. Remi Swierczek

    All of them, including clueless Eddy Cue with his AppleMusic are practisioners of Daniel Ek’s heretic religion!

    Convert #Radio and all lost STREAMERS to discovery based music store and we will enjoy $200B music industry by 2025!

    Larry Page is the only PROPHET ON THE HORIZON!
    There actually hope in the air, he is the MOONSHOT MAN and we are witnessing big RED MOON turbulence!

  4. Jeff Robinson

    That’s because the service let’s you sign up without having the necessary, proprietary hardware in place. This service works only with the Bose or Sonos system.

  5. Rickshaw

    And a high percentage of Twitter accounts have been inactive for over a year. Ok, now what?

  6. steven corn

    I just glanced at the full financial document (278 pages). Section 6.2 (Competitive Strengths) caught my eye immediately. Every single “strength” could be applied to any of the leading streaming services (i.e., Spotify, Apple Music, Google/Youtube, etc.). In other words they are not really a competitive distinction at all. It’s merely kool-aid for the investors. So, my question is “who’s drinking it?” Any casual observer of the market would see right thru this.

    My final question would be, why would someone invest in a company that allocates only 2 pages of a 278-page document on competitive distinctions? I would think that a lot more thought and energy would need to go into this specific area to elicit long-term confidence.