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The Deezer music subscription service has put a June 2012 deadline on its already-announced plan to roll out in over 200 countries – a globalisation that will take it pretty much everywhere except the U.S..
“Global is quite big. We want to be the first ever truly global music service,” CEO Axel Dauchez said on stage at Le Web.
“There is a lot of fog around the U.S. market. Ten percent of music interest is in the U.S..
“In 2012, you have 160 million smartphones in the U.S. and 900 million elsewhere. Definitely, the market is not in the U.S.. The U.S. is low-growth, high-margin, high competition.
“When you’re looking at pay-TV, for instance, spending proportionate to cost of living is much higher (elsewhere) than in the U.S.”
There is no further detail on how Deezer has secured so many global music rights, but UK MD Mark Foster told paidContent in October it expanded first to the UK from France because most music rights are brokered with labels in London.
This is a market with four opportunities…
- growing global smartphone adoption
- high piracy in some markets, especially the Far East
- riding Facebook’s platform parasitically also yields growth
- striking other carrier relationships puts services in front of potential consumers
The subscription music segment makes its money by requiring payment for mobile access. Having already grown through partnerships with Orange in France and the UK and with Belgacom in Belgium, Deezer says 10 of the 85 roll-outs it will do by January will also have a telco component.
Now that services like Deezer and Spotify look set to make a dent in western piracy, labels are turning their attention to remaining piracy problem areas, like Spain and China. If the services can crack there, they will forever be in labels’ thrall. Annual Deezer revenue has tripled to €50 ($66.88/£42.87) million, Dauchez said.
- Well-capitalised Spotify recently added the U.S., Belgium, Austria and Switzerland and is planning Germany, Australia, New Zealand, Singapore and Hong Kong.
- Rdio has launched in Brazil and is planning Germany and Australia.
- We7 is expanding from the UK to other parts of Europe.
- Netflix (NSDQ: NFLX) is expanding to the UK and Ireland.
- Guardian.co.uk and Mail Online are expanding in to the U.S.
- WSJ.com has been launching new European, German-language and Asian editions.
- Hulu is now in Japan.
Others are farther behind…
- Rhapsody is considering its globalisation through partnerships but doesn’t appear in any hurry.
- Pandora (NYSE: P), too, is mulling internationalising but sees risk after exiting the UK several years ago.
- Mog’s UK launch is running almost two years late.
- Hulu has found no chance of UK launch in three years of trying.
Spotify, in particular, looks like it developing significant brand traction, so Deezer is pushing its globalisation button quick and hard. It thinks the key is surfacing relevant local music through editorially-led discovery.