Report: Deezer Loses 300k Subscribers, While Revenue Jumps Nearly 10%

Revenues Up

FRANCE-based online music streaming platform DEEZER lost 300,000 subscribers in the first half of the year recorded a 2.9% drop in its total subscribers as of the end of JUNE to 9.4 million from 9.7 million in the year-ago period, according to a report in MUSIC BUSINESS WORLDWIDE. .

The drop came as the 10.7% increase in its subscriber base in FRANCE offset the 18.1% drop in its subscriber count in the rest of the world, according to the company’s first earnings release since its tepidly received public listing in JULY.

In its home country, DEEZER’s subscriber growth was fueled by an increase in family mix plans and the addition of new partners. Around the world, though, DEEZER's subscriber base shrank with the company's exit from RUSSIA at the end of Q1 led to a loss of 104,000 paying customers.

The company is increasingly focused on selected key markets as it seeks to direct its efforts towards large attractive markets via a partnership-first go-to-market model.

DEEZER disclosed plans to expand in GERMANY in the coming weeks by partnering with local broadcaster RTL. The company launched in BRAZIL in 2013 with TIM, GLOBO and MERCADE LIBRE there.

Despite the drop in its subscriber base outside FRANCE, DEEZER’s overall first-half sales jumped 9.9% year over year (constant currency) to €219 million in H1 2022.

DEEZER CEO JERONIMO FOLGUERA said, "This positive momentum shows the strength of DEEZER’s unique B2B/B2C strategy, as well as our capacity to capture the global growth of the music streaming industry."

DEEZER’s revenue outside his home country jumped 8.1% year over year (at constant currency) to €87 million from €76.6 million last year, faster than the 11.1% YoY increase in revenue it saw in FRANCE in the same period.

Direct B2C revenue globally edged up 10.8% YoY (constant currency) to €155 million as direct B2C ARPU (average monthly revenue per user) rose to €3.90 from €3.40.

It merged with I2PO, a Special Purpose Acquisition Company (SPAC), allowing it to raise funds from the capital market. The transaction gave DEEZER a pre-money equity valuation of €1.05 billion.

The IPO “gives us the resources to continue the successful expansion of Deezer,” FOLGUEIRA remarked.

Other major highlights during the first half include DEEZER’s expanded integration with SONOS, the launch of the company’s in-app lyrics translation, its first major in-app livestream, and a new brand positioning targeting Gen Z launched on MONDAY in FRANCE, BRAZIL and GERMANY.

Added FOLGUEIRA, “With a highly competitive product, a clear strategy, a renewed and experienced management team, supported by a strong new board of directors, I am very confident that we are now perfectly positioned to accelerate our growth, and deliver substantial value for all our stakeholders.” 

DEEZER's sights are clearly aimed at threatening SPOTIFY's dominance in the streaming marketplace. While DEEZER lost 300,000 subs in the first half of 2022, SPOTIFY added 6 million premium subs in Q2, ending the first half of the year with 188 million subs, compared with DEEZER’s 9.4 million.

DEEZER expects to generate  €455 million for the full financial year, up 14% from a year prior.

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