Yesterday (September 20), MBW predicted that new value rises on this planet of music streaming can be with us by the tip of 2023. It took lower than 24 hours for that forecast to return true.
Deezer, the Paris-headquartered rival to the likes of Spotify and Apple Music, has at this time (September 21) quietly introduced that its costs are rising but once more.
In a brief assertion posted on its web site, Deezer wrote: “From September twenty first, 2023, costs are adjusted for all new premium and/or household subscriptions in France, UK, Spain, Italy and the Netherlands. For our present premium and household subscribers in these nations, the adjustments in pricing will turn into efficient on the earliest on the primary billing interval after October twenty fourth, 2023.”
MBW has confirmed what which means in actuality:
- Within the EU territories talked about – France, Spain, Italy, and the Netherlands – Deezer’s particular person Premium value is rising from EUR €10.99 to €11.99 per 30 days from at this time. Deezer’s particular person Premium value will stay unchanged within the UK, the place it’s already GBP £11.99 per 30 days;
- In all territories talked about – together with the UK, plus the choose European markets– the value of Deezer’s Household Plan can be rising, as much as €19.99/£19.99 per 30 days. That represents a €2/£2 leap in month-to-month value for customers.
To melt the blow of those value rises, Deezer is providing a two-month-long free trial interval (for each particular person and household tariffs) to new subscribers in these markets.
(Deezer’s pricing within the US stays unchanged at USD $10.99 per 30 days for a person account, and $17.99 per 30 days for a Household Plan account.)
That is the second time up to now 12 months that Deezer has upped its costs in key territories:
- Deezer elevated its customary month-to-month subscription value within the United States from $9.99 to $10.99 in September/October final yr.;
- That got here after a value rise throughout varied European territories in early 2022, with the month-to-month value of a person plan rising from €9.99 to €10.99 in markets like France and Germany;
- Deezer truly took the plunge on a extra aggressive value rise within the UK way back to October 2021, when it raised its Premium value from GBP £9.99 per 30 days to £11.99 per 30 days.
Information of the newest value hike at Deezer at this time comes one month after the corporate’s CEO, Jeronimo Folgueira, hinted that additional value rises have been on the way in which from the corporate.
“Deezer was the primary participant to boost costs… since then, all different international platforms have adopted our transfer, which supplies us the chance to evaluate pricing once more within the close to future.”
Jeronimo Folgueira, Deezer, talking in August 2023
“Deezer was the primary participant to boost costs in early 2022, with just about no affect on churn, which has clearly demonstrated that music is very undervalued and that platforms like us have extra pricing energy than initially anticipated,” Folgueira instructed buyers in August.
“Since then, all different international platforms have adopted our transfer, which supplies us the chance to evaluate pricing once more within the close to future.”
That ‘close to future’ is now right here, and can increase questions of whether or not different key streamers – together with Spotify, Apple Music, and Amazon Music – will quickly comply with go well with and lift their very own costs once more.
Apple Music hiked its particular person Premium tier value by 10% to $10.99 within the US final October; Amazon Music adopted go well with in January this yr; Spotify then did the identical in July, transferring its US value up by 10% whereas additionally mountaineering its costs in 52 different markets.
Following that July value rise, Spotify CFO, Paul Vogel, stated at a Goldman Sachs occasion in September: “[We] truly raised costs in numerous markets that pre-dates anybody else elevating costs; we had raised costs like 50 instances [if counting territories individually] even earlier than that [July announcement].”
“When we have now raised costs up to now, we see little or no affect on gross consumption and little or no adjustments in churn. We really feel assured that as we do increase costs [again], and we’ve performed it lately, we’ll proceed to have comparable varieties of dynamics at play.”
Paul Vogel, Spotify, talking earlier this month
Vogel added: “When we have now raised costs up to now, we see little or no affect on gross consumption and little or no adjustments in churn.
“So we really feel assured that as we do increase costs, and we’ve performed it lately, we’ll proceed to have comparable varieties of dynamics at play [i.e. little change in churn] within the markets the place costs have elevated.”
The music business, then, seems to have began following the forecast of Invoice Ackman’s Pershing Sq. Holdings, which predicted in March this yr that – having lastly breached the $9.99 month-to-month value barrier – extra, extra common value rises from music streaming providers at the moment are pretty much as good as inevitable.
“We consider that breaking the $10 barrier is a watershed second, as different platforms will doubtless comply with go well with, and common value will increase will turn into the norm within the audio streaming business as they’re within the video streaming business.”
Pershing Sq. Holdings, March 2023
Pershing Sq. instructed its buyers: “We consider that breaking the $10 barrier is a watershed second, as different platforms will doubtless comply with go well with, and common value will increase will turn into the norm within the audio streaming business as they’re within the video streaming business.”
Different influential voices within the music biz agree with Ackman’s message.
Robert Kyncl, Warner Music Group CEO, stated on an earnings name with buyers final month: “We see these preliminary [music streaming] value will increase as an encouraging begin. There isn’t any proof that the providers are experiencing elevated ranges of churn.
“We consider the market will bear additional value will increase sooner or later, and we’re anticipating that they’ll arrive on a extra common cadence than up to now.”
Deezer’s newest value rise comes at a time when the French streaming service appears keener than ever to lock arms with giant music rightsholders to enhance their fortunes on its platform.
Earlier this month, Deezer co-announced a brand new fee mannequin on its service – ‘artist-centric’ royalties – in tandem with Common Music Group.
‘Artist-centric’ will, amongst different issues, see artists with greater than 1,000 month-to-month listens on Deezer – from over 500 month-to-month listeners – given a ‘double increase’ to their royalty weighting on the service. The mannequin launches for UMG artists in France subsequent month (October).
Common Music Group is known to be a minority shareholder in Deezer (through a ‘PIPE’ funding made final yr), and licenses the biggest recorded music catalog (by worth) to the platform of anybody firm.
The most important particular person shareholder in Deezer is Entry Industries – majority-parent of Warner Music Group. Entry continues to personal a ~37% stake within the music streaming platform, regardless of Deezer’s SPAC IPO final yr.
Warner Music Group – through WEA Worldwide Inc – owns an additional 3% stake in Deezer.
Regardless of its latest headline-grabbing business bulletins (at this time’s included), it’s price placing into context Deezer’s comparatively minuscule market energy.
In keeping with the agency’s H1 2023 outcomes, Deezer – now a premium-only service, albeit with a free trial supply – counted 9.3 million paying subscribers globally on the shut of June this yr.
That determine was down by 100,000 subscribers versus the equal determine from the identical date in 2022 (9.4m).
Deezer’s 9.3 million subscriber base on the shut of June 2023 was round a twenty fourth of the scale of Spotify’s paying buyer base on the similar date (220 million).
Spotify’s whole international month-to-month energetic viewers on the finish of June this yr (together with ‘ad-supported’ customers) was 551 million individuals – about 59 instances greater than Deezer’s whole viewers.
Within the first six months of 2022, Deezer posted EUR €233.2 million in revenues – up 6.5% YoY. at fixed forex.
Nonetheless, the corporate additionally posted a EUR €13.1 million adjusted EBITDA loss for the interval.
Deezer’s strongest territory by some margin is France, the place it counted 3.6 million ‘direct’ subscribers on the finish of H1 2023 this yr.
That 3.6 million determine made up over half of Deezer’s whole ‘direct’ subscribers globally (the place ‘direct’ refers to those that have signed as much as Deezer instantly, relatively than through a third-party accomplice).Music Enterprise Worldwide