The Biggest Music Streaming Service You’ve Never Heard Of
At first, Deezer, the international song-streaming service avaiable in 182 countries, didn’t fully understand how to reach music fans in Brazil — its featured-artists homepage didn’t emphasize sertanejo country hits or forro dance anthems or even bass-heavy funk that, in turn, turned off working-class Brazilians. But since early last year, as the service made deals with local record labels and hired experienced curators, Deezer has taken off regionally and drawn 2 million monthly users. “It takes a lot of time to get the local knowledge,” says Emmanuel Zunz, chief executive of ONErpm, a Sao Paulo-based music-distribution company. “Brazil is such a massive country and every city is quite distinct. Over time, Deezer started to understand what was the right balance.”
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Founded in France seven years ago, Deezer distinguishes itself from rivals Spotify, Beats Music, Amazon, Rdio and others by methodically conquering all kinds of territories, even those with piracy problems or complex music scenes: Russia, Colombia, Thailand, Singapore, Brazil. The company has so far avoided the biggest markets, including Japan, where expensive CDs still reign, and the U.S., although the company has strongly hinted it plans to expand here later this year. “We decided not to enter the U.S. first but to develop a global footprint,” Christopher Coonen, the Paris-based service’s chief operating officer, tells Rolling Stone. “To be relevant in Turkey or Russia or Brazil, you need to make sure you cover the local aspect.”
Streaming music has grown 42 percent since last year, while iTunes-style download sales have dropped 13 percent (for tracks) and 15 percent (for albums), according to Nielsen Soundscan numbers released last week. This growth has created a highly competitive market — Spotify has 10 million worldwide paid users, Apple bought Beats Music in May, Amazon recently launched a service and YouTube is aggressively negotiating with independent record labels for its planned service later this year. Deezer has just 5 million paid users, but its model of partnering with telecommunications companies, such as Orange in parts of Europe and dtac in Thailand, gives it a foothold in many countries. The company is also big on bundling — earlier this year, Samsung announced its Galaxy S5 smartphone would include six months of free Deezer for European customers.
Spotify and others are also available outside the U.S. and Europe, and have local telecom partnerships as well, but Deezer is in more markets and, more than any other service, emphasizes global expansion to distinguish itself from rivals. “If you look at all the markets where piracy was active up until a few years ago, we think we’ve really helped,” Coonen says. “We’ve taken people who were pirating to paying.”
By this point, all the major streaming services are simple to use and provide millions of on-demand tracks, so they distinguish themselves mostly through “curation” — playlists and radio channels that help listeners decide what to hear next. Here, too, Deezer’s edge is international, relying on experts to recommend South Korean or Russian songs to listeners in other locations. Deezer supporters say this international focus helps American indie labels break bands outside the U.S., but some say they’ve yet to see the benefits. “If they have a large usage base, it’s one that isn’t listening to much of our content,” says Robb Nansel, owner of Omaha-based Saddle Creek Records, home of Bright Eyes, the Thermals and others, adding that Deezer provides “light” financial compensation so far.
But Deezer is nonetheless preparing for its long-awaited U.S. launch, recently hiring an American CEO and opening a new office in San Francisco. Deezer reps refuse to elaborate on U.S. plans, but Coonen drops a hint about the importance of expanding here, in addition to almost everywhere else in the world. “We estimate 25 million people in the world, including the U.S., are paying for streaming services, out of a total Web-connected population of 2 billion,” he says. “We’re really at the beginning of this market.”
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