Deezer to File for IPO, Spotify Doesn’t Care

Do you use Deezer? The music streaming has its fans, six million of them paying subscribers. But it’s also French, so it might go on strike at any moment and ruin your vacation, leaving you stranded in Ibiza forever.

With any luck, however, those strikes will be averted if all goes according to plan with Deezer announcing an IPO on the Paris Stock Exchange. Though Deezer is doing moderately well, it can only fight so hard with limited capital against juggernauts like Spotify and Apple Music, both of which boast many times more subscribers (though it remains to be seen how Apple music’s numbers level out after free trial periods end). It’d be nice if Google actually threw something behind Google Play Music to make it a fierce competitor in the space, but that’s another article.

Deezer officials say the company intends to use funds raised from the IPO to improve distribution and the product itself. Officials are also hoping to sell off pieces of the company, which is valued at roughly $1 billion.

Unlike Spotify, which focuses on ad revenue, Deezer is largely funded by partnership agreements with mobile carriers and other firms. For example, Deezer purchased Muve Music, which opened up access to all Cricket subscribers. Deezer also struck hardware deals with Bose and Sonos.

For audiophiles, one big area where Deezer differentiates itself from Spotify is in top-tier audio quality for those willing to pay for it. Spotify Premium subscribers can listen to audio at 320 kbps, whereas Deezer’s highest tier listeners can listen to FLAC-level lossless tracks. If Neil Young’s Pono Player were to get in the mix, we’d have a stew, baby.

Because going in on a brawl with Sweden’s Spotify would not just be bad for international relations, but is a dubious business choice, Deezer intends to focus on different markets than Spotify at first, expanding market share where there is a vacuum rather than struggling to carve out one’s own space. As a reader of TalkAndroid, your very own preferred mobile OS has done basically the same thing while Apple played the exclusivity card.

IPOs can be a great way to raise money, but once finicky shareholders are in the mix, it becomes more difficult to take risks. Deezer will need to find reliable revenue streams to keep investors appeased. It will be interesting to see how everything stacks up as time goes on.

Alright, I’ve basically slammed the French, the Swedish, Cupertino, and Mountain View in one article. Did we miss anyone? Ah.

TIDAL!

Via: Engadget
Source: Wall Street Journal

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