Global Market Data
Global News Journal
Pakistan: Now or Never?
Front Row Washington
David Cay Johnston
The Great Debate
Personal Finance Video
Life & Culture
Samsung's new Android smartphone
Samsung unveils the Galaxy Nexus, its latest smartphone powered by Google's Android operating system called "Ice Cream Sandwich." Video
Battlefield 3 targets Call of Duty
New energy possibilities with dead wood
Dog breed saved by South Korean scientist
Green car race electifies students
Macau casino junkets thrive despite China credit squeeze
18 Oct 2011
Who’s behind the Wall St. protests?
Alabama immigration law decried, applauded as some flee state
Obama jobs roadshow seeks to tap anti-Wall St anger
Japanese airline, ANA, apologises for plane flip
Fri, Sep 30 2011
Rihanna's "inappropriate" outfit halts music video
Tue, Sep 27 2011
9-year-old designated driver in Michigan
Tue, Oct 18 2011
Music streaming site Deezer to launch in 100 countries
Analysis & Opinion
Tech wrap: Google profit expectations eat dust
When is an EMI bid not really a bid?
By Leila Abboud
Wed Oct 19, 2011 4:05am EDT
PARIS (Reuters) - French on-line music streaming service Deezer will launch in more than 100 countries in the coming weeks, and the start-up is negotiating with roughly a dozen telecom operators on partnerships in a bid to expand its global reach.
Chief Executive Axel Dauchez told Reuters on Tuesday that Deezer's approach differed from its rivals, such as U.S.-based Pandora and Sweden's Spotify, because it had decided to avoid the U.S. market because of the high costs and intense competition involved.
Instead he said Deezer will soon launch in a slew of other places overlooked by its rivals, including Germany, Italy, Spain, Turkey, Indonesia, Korea, Mexico and Brazil.
"The minute that I tell the major music labels that I am not interested in signing for rights to the U.S., the negotiations over terms become much much easier," Dauchez said in an interview.
"Instead we aim to sign global licensing deals, without the U.S. or Japan, so we can roll out in dozens of countries quickly."
It's a risky strategy given that the music business generates the lions' share of revenues and profits in the United States.
The U.S. has also been at the forefront of deep changes in the music business as giants like Universal Music and EMI try to survive despite rampant online piracy, and Apple continues to be a powerful force a decade after opening its online music store iTunes.
Today a crop of streaming websites like Pandora, Rhapsody, Spotify and Lastfm.com are also jostling to convince American users to sign up for their free and paying services.
FRANCE TELECOM PARTNERSHIP
In what Dauchez dubs an "industrial"-style expansion, Deezer has designed its site to deploy quickly in many countries now overlooked by the music industry, from Botswana to Indonesia.
"We built our site to be able to deploy in a hundred countries with the flip of a switch," he said. "The music industry earns 80 percent of its profit in seven countries so there are many under-monetized countries."
In contrast, he said Deezer's competitors had less of a global approach so far, adding that Spotify was in 8 markets, while Apple's iTunes was in less than 30.
Deezer, which is privately held and has raised some 15 million euros from investors to date, now has 20 million users signed up for its free streaming service in France.
Asked whether Deezer would need to raise additional funds to fuel its international expansion, Dauchez said that it would depend on the level of investments needed next year.
Less of a household name outside its home market, Deezer just launched in the U.K. last month and is also betting that its integration into Facebook -- a feature it shares with key rivals -- will help it grow abroad.
The site has roughly 50 million euros in revenue and Dauchez said he expected it to break-even this year. It has signed deals with about four major record companies and is now negotiating with a few others, boasting a catalog of 13 million songs.
In summer of 2010 Deezer signed a crucial partnership with France's biggest mobile operator, France Telecom's Orange, in which Deezer's ad-free premium service, which usually costs about 10 euros a month, was bundled into some smartphone and broadband offers.
The deal helped Deezer rack up some 1.4 million paying clients -- up from just 25,000 -- and was seen by the mobile operator as a way to improve customer loyalty. Under the terms of the deal, France Telecom took an 11 percent stake in Deezer.
"We hope to replicate the Orange model with other telecom operators," said Dauchez, declining to say which operators it was in talks with.
(Additional reporting By Marie Mawad and Gwenaelle Barzic; Editing by Christian Plumb)
Related Quotes and News
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Be the first to comment on reuters.com.
Add yours using the box above.
Social Stream (What's this?)
Back to top
New York Legal
Support & Contact
Advertise With Us
Connect with Reuters
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
About Thomson Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.