n December last year Deezer could only claim residence in two countries, having made the short journey from France to the UK. Just over
five months later, the music streaming service can be found in as many as 49 territories with recent arrivals in Canada, Australia and New Zealand. With that in mind, and plans for further
expansion into even more territories across the rest of this year, Deezer is growing fast and commanding attention as it jostles for position with its nearest rival Spotify. We spoke to the company’s UK MD Mark
Foster for his take on the constantly raging streaming debate, where the technology will take us next and what lies in store for Deezer both in the UK and abroad...
Streaming services have carved a unique place for themselves within the music industry, but they’re actually just a branch of distribution aren’t they? For me it’s absolutely cut and dry. This is a new
ABOCVE Foster care | Deezer’s UK MD is keen to market responsibly and move the public’s perception away from ‘free’ music
distribution channel and it’s interesting that the majors have reorganised themselves so that digital distribution comes with physical distribution in their commercial divisions. So, the guy who’s head of sales has physical sales, online sales – which could be the online distribution of a physical product – he has iTunes and he has streaming services. They’re all different distribution channels, they’re just different models. That feeds into the discussion of streaming
service revenues and whether they’re too much or too little. It’s not really a debate: you have physical sales
through which you earn a certain amount for a physical unit shipped, then you have digital downloads and then streaming, which is less per unit but higher in volume, and then you have radio. Streaming is incremental to all those other
routes. We’ve had physical decline for 10 years, iTunes is still growing but at a lower rate and radio is still healthy but on a fairly flat level; then we have this new thing called streaming. The exciting thing is that the contribution that streaming revenue is making in markets like France is for the first time since Q4 of last year turning that total curve up.
It shows that streaming services are contributing
to the recovery of the industry and that model will be replicated. In the States, digital revenues are more than 50% of total revenues and you’re seeing an upswing in the UK. The future’s looking bright and it’s thanks to new models of distribution.
Does the fact that a user is paying for a streaming service directly, with a monthly subscription in Deezer’s case, impact on the artist? Obviously there are artists that have had misgivings about new forms of distribution because they’re not sure if it’s cannibalising other forms of sales, be it physical CDs or downloads. I think to a large extent that’s going away now because, certainly in recent weeks, both Sony and Universal have come out at Midem and other events with research that suggests there’s no way that streaming has cannibalised downloads or physical sales - they’re complementary, they can run in parallel. I think artists will come around to that. There’s
been a debate about how much money they’re earning from streaming services and again that’s something that will get resolved, whether it’s through Beggars coming out and making a