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Look Out Spotify: French Start-up Deezer Raises $130 Million

The streaming music service is already in 100 countries but hasn't announced plans yet for a U.S. launch.
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Deezer, the French web-based music streaming service, confirmed Monday it has raised $130 million from Access Industries, the holdings company that also owns Warner Music Group. And it has a pretty lofty global strategy to match.

According to The Wall Street Journal Europe, Deezer plans to expand its reach into 200 countries around the world. Having launched in 100 countries including Thailand, Mauritius and all of Europe, the company is already half way toward its goal.

“This investment comes at the right moment to change the scope of ambition,” Deezer Chief Executive Axel Dauchez told the outlet. “We have proved that in some countries that have never monetized before we are currently generating revenue for the music industry.”

Relying on a freemium model, Deezer reportedly has 7 million monthly users with 1.5 million paying subscribers, which is a little less than half of Spotify’s users and subscribers in the same categories. Though Deezer isn’t currently profitable due to expansion, it achieved profitability three years after its launch in 2007 and plans to return to profit in 2014, Dauchez told The Wall Street Journal. Besides Deezer and current market leader Spotify, Rdio, Rhapsody and Mog also offer streaming music services.

The company hasn’t yet announced plans for a U.S. launch, which may turn out to be a blessing in disguise. Last year, Spotify recorded a net loss of $57 million as revenues were directed to music royalty costs, according to financial research firm Privco. Spotify did not comment on the loss. 

But Deezer may take a chance on U.S. music lovers soon enough. Clement Cezart, Deezer’s head of international business development, told Billboard.biz last month, “We will come to the U.S. one day.”

Deezer did not respond to requests for comment at press time. 

 

Last updated: Oct 9, 2012

MATTHEW WONG | Staff Writer

Matthew Wong is a digital journalist whose work has also appeared in Dow Jones VentureWire and The Wall Street Journal.




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