Deezer is a music streaming service with a unique business model that aims to change the way we listen to music. TB&I spoke to Deezer UK’s managing director, Mark Foster.
How does Deezer’s business model work?
We’re a subscription-based music streaming service. You pay a monthly subscription, and get access 20 million tracks, unlimited.
There are different pricing models. The Premium+ subscription gives you web and mobile access, the Premium subscription gives you web access only, and if you haven’t quite decided yet whether you’d like to pay, you can have free unlimited access for up to a year, on an ad-supported platform.
Alternatively if you’re an Orange or EE (mobile networks) customer, you can pay for Deezer in your monthly phone bill.
You can make recommendations and playlists with your Deezer account, and share them— legally—with your friends, because everything is licensed with the copyright owners.
What sets Deezer apart from other music streaming services?
Principally, we’re very editorial-based, unlike some services that are very algorithm-based. So if you listen to a lot of rock music on an algorithm-based service, it will just recommend you rock music.
Deezer has editorial teams of people in all of our major markets, who make weekly recommendations for our users. They’re big music fans who go to about 300 gigs a year and listen to music constantly. Their musical knowledge is very deep and very broad. We make recommendations every week across 12 genres, at five recommendations per week per genre.
Is there any IP protecting Deezer’s business model?
There are a number of copyrights involved in the way we design the site, the mobile apps and the functionality within those apps.
Were there any difficulties in licensing when you started the company?
Licensing music is a very complex matter as there are a lot of record companies, big and small. Internationally there are three major labels, and then thousands of independents of all shapes and sizes. Many of those are distributed by companies that we call aggregators, which act as a distribution hub for many independent labels.
In order for us to provide a comprehensive catalogue for our users we have to have licences from all our repertoire owners.
“OUR MISSION AS AN INDUSTRY, BUT SPECIFICALLY AS A STREAMING SERVICE, IS TO ENCOURAGE PEOPLE BACK FROM PIRACY.”
For every sound recording there are two copyrights. One is the rights to the recording, which are owned by the record company, and the other is the rights to the composition, which are owned by the publishing company.
Deezer is a French company—we originally went around all of these rights owners to negotiate rights for distribution of that music in France only. When we decided to open our brand internationally, we went round all those companies again, to renegotiate those rights. It’s a pretty hefty task. We’re now in 182 markets around the world.
What measures does Deezer have in place to prevent copyright infringement (of the music) by its users?
You can access the music only if you’re registered. You have to set up an identity, so we then have your IP address. You can’t download and keep tracks, but you can temporarily download tracks to your own device.
We’re principally a streaming service, not a download service. However we do have an offline mode, which allows you to listen to your favourite music when you don’t have a signal. You can cache tracks to your device, which are then locked to your device, so you can’t transfer them to anybody else. We will stream music only to a particular device, or IP address. It’s destination-specific.
How does Deezer promote and protect its brand?
We have registered our brand with a trademark, and advertise both online and offline, sometimes through social media. We recently launched a Facebook campaign to drive traffic to the free service.
We have partnerships with Orange and EE, which advertise Deezer as part of their portfolios, which is a key way of building our brand. We also have media partners including radio stations, magazines, and websites specific to different genres of music. They will create a radio channel on Deezer, which is branded and curated by the partner. The partnerships are mutually beneficial, as we promote them as well.
What challenges does Deezer face when promoting its brand online?
The first challenge is piracy. Over the last 10 years, lots of pirate sites have sprung up, particularly in digital music. They’re illegal, they’re not licensed, and they don’t pay the rights owners or the artists. Our mission as an industry, but specifically as a streaming service, is to encourage people back from piracy.
We’ll do this by creating a product or service that offers them a better experience, richer content, and a more comprehensive catalogue—and it’s all legal, so the artists and the rights holders get paid.
Second, we need to educate the general public about streaming. In the digital world there are two models for consuming media: one is by downloads, and the other is streaming. The streaming model is developing very fast and is how people increasingly want to listen to their music, as they care more about access to their music than ownership.
This article was first published on 01 March 2013 in World IP Review
Deezer, branding, marketing, music streaming, business model