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04.05.12 MusicWeek 13
statement about paying 50% of digital revenues of streaming to artists or whether the whole raft of artist contracts gets looked at. But our relationship is with the rights holders
and we pay them based on the contracts we’ve negotiated. We can’t really control what happens after that.
Now that 21 has done record breaking numbers, will there be a massive push from a company like Deezer to get Adele’s next album? It’s been an ongoing conversation, actually, it’s not that there was an effort and then we left it alone and came back to it later. Those conversations are ongoing and there are other artists that have been hesitant at first and, without making a big deal out of it, have at some point released their album to streaming services. It’s not a good idea to name names because
some of them have been quite high profile saying, “streaming is the devil and we’re not going to go that way” and then have changed their mind. Those conversations are ongoing and we try to
show the positives of having your music available on streaming services. Sometimes those decisions are made by the labels, although I’d say that’s practically never the case now. From what I understand, it tends to come from artists’ management companies who are not sure if this is the right thing to do. I think gradually, as people get used to streaming services and what they can bring it’ll change. Deezer is a brilliant promotional tool and it’s a
safe and easy platform to find new music. That’s got to be good news for artists. As long as they’ve got a distribution deal and we have a license with them, they can have their music on Deezer, even if they have little or no promotion behind them. The whole discovery is key. Whether you’re
publishing films, TV, magazines, or some other form of media; discovery is what digital technology allows you to do.
A lot is said about the service itself as a selling point to consumers, but how much of a selling point are certain exclusives to a streaming service and will they ever become central in the promotional battle? I suppose having exclusives for a time does give you a short term advantage from a sales and promotional point of view, but some of the labels get a little bit pent up and say, “We can’t give you an exclusive on this because it might upset another streaming service or it might upset iTunes.” We never used to have those conversations in the
High Street when you had Virgin Megastore, HMV and Our Price. They were essentially bringing the same music to people, whether they had an exclusive on a particular promotional or marketing asset was a short-term position. In my opinion, the leading streaming services
like ourselves and Spotify and the digital download services like iTunes can all happily coexist. We’re appealing to slightly different demographics: Spotify is more tech-orientated than us, we’re more editorial and iTunes is a different model altogether. So why not give us the exclusive on streams of a track and prepare the market? Then iTunes could have the exclusive on the pre-orders because we don’t do pre- orders and downloads anyway. The two models can coexist quite happily. I’m not concerned about competition. I think, to
some extent, we all have a common agenda, it’s about educating the public about legal, non-pirate music in the digital space. There’s a massive job to be done by all of us. I know the government is engaging in trying to
get that message out there. Ed Vaizey, for instance, is a massive supporter of legal digital services and a massive opponent of piracy. It’s great that he is a supporter but I think it could go further.
What kind of things would you like to see government doing? I think there needs to be a little bit more of a stick and carrot scenario where there’s more publicity about illegal services, closing down pirates and actively seeking them out, but also some sort of incentive for the consumer to go to legal services and try them. Across the industry there’s more that can be
done to educate the public. For us, the partnership we have with Orange is crucially important, not just as a commercial partnership but in getting the message out to the mass market: it’s paid for music, it’s very cool and you can get it within your tariff so there’s no risk. It’s a new way of accessing your music and it’s legitimate. That kind of relationship is superb for the industry. It gets a large number of consumers involved in the streaming process. We’re trying to get away from the ‘free’ concept -
It’s unlimited music ‘included’ in your tariff. It’s a fine distinction but I think it’s a really important one and Orange have been very responsible in their advertising saying, “This is unlimited music included in your tariff ” rather than calling it free, which is dangerous.
How important has the Orange deal in the UK been for you commercially? It’s been terrific. The relationship is very strong and having music as a product within their portfolio of services is obviously very important to them. They see it as a great way of pushing the responsible music agenda, attracting and retaining a lot of customers and rejuvenating their marketing offers and they’ve been very responsible in the way they’ve marketed it. In terms of our reach in the UK, or anywhere
where we’ve partnered with a telco, it’s provided the tremendous advantage of getting us to scale very quickly. We’ve been open in the UK since September and, about six months later, from what we understand, we’re already the number two streaming company in the UK in terms of paying subscribers. To be able to get to that level this quickly is in large part down to Orange. That’s not to say we’re not doing our standalone
marketing and growing our business, of course we are, but the two things work hand in hand.
Are you looking to partner with any other platforms in future? Not in the ISP and telco space. We have an exclusive arrangement with Everything Everywhere, which is the umbrella company for Orange and T- Mobile as well.
But what about new partnerships with games consoles, smart TVs and the likes?
In terms of distribution we’re on Sonos and Logitec, we’re already on IPTV systems with a number of manufacturers and that number’s
ABOVE Window of opportunity | Launching in new territories is made easier by the fact that Deezer is browser rather than client-based, according to Foster
growing. We’re already working with a digital car radio brand as well and you can probably work out who that is because there aren’t that many. So, in terms of distribution partners, absolutely,
we’re already coupled with or bundled with a number of partners in different sectors and we will continue to pursue other avenues of distribution without jeopardising our current relationships.
You mentioned in-car radio; it seems like an obvious environment for streaming services to go to next. Is there a race to get there first? I don’t know if there’s a race. Certainly it’s something that we identified early on as a huge potential market. Satelite radio in the States is huge as you probably know and that’s down to two brands that work very closely with car manufacturers so when you buy your car you’ve already got your satellite radio built in and that’s where we’re going in terms of that sector of the market in Europe. Satelite radio is more challenging in Europe
because it’s much more fragmented as a region: you’ve got lots of different countries, legal entities and licensing bodies to deal with rather than the homogenous US market. But an in-car app for Deezer wouldn’t be challenging at all. As long as we have the rights to that music across Europe we can bundle the app with a manufacturer and off we go.
So once the rights are sorted it’s ready to go? Yes.
How long do you think it will be before we start seeing Deezer in cars? Imminently. In France we did something that was a marketing thing rather than in-car radio with a limited range Nissan Deezer. Because it’s such a big brand in France, Nissan came in and did a limited Deezer range of one of their little cars.
Do you think it is a two-horse race over here as far as streaming is concerned? No, not necessarily. I think a number of different models and a number of different players can coexist quite happily. I think people at the moment are thinking ‘Deezer, Spotify’ but MOG is coming over and Rdio is targeting some key European markets. I think there’ll be four or five key players in the
digital space, all with slightly different models, all with different partners in terms of distribution and promotion and I think there’s plenty of room for them to coexist.
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