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Deezer reaches 2m subscribers, gets $130m new funding

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Deezer, the music streaming rival to Spotify, has reached the milestone of 2 million paid subscribers worldwide, and secured $130 million (£81m) in new funding from investors including Len Blavatnik's Access Industries.

Launched in 2007, Deezer offers more than 20 million music tracks and is used by a reported 7m active monthly users, creating over 100m playlists.

Deezer


The service, initially introduced in France as Blogmusik, claims that it now has 2 million subscribers who pay to listen to an unlimited amount of music tracks without adverts.

Deezer has enjoyed strong growth despite avoiding the US market, where it feels the fierce competition has "significantly increased customer acquisition costs".

Instead, Deezer has gone after emerging markets, such as South America, as well as attracted music fans through partnerships with social network Facebook, along with local telecommunications providers such as Orange, Deutsche Telekom, Telenor, Millicom and Belgacom.

The company claims that it has been profitable "since 2010".

Such solid performance has persuaded investors to inject a further $130 million into the business. The funding round was led Blavatnik's Access Industries, which becomes a "cornerstone investor" in Deezer.

Billionaire Blavatnik has invested in various companies, but most notably agreed a deal to buy major label Warner Music Group for $3.3 billion last year.

Discussing the paid subscribers milestone and new investment, Deezer chief executive Axel Dauchez said: "One year ago, we launched Deezer worldwide. We now operate across every continent and have 2 million paid subscribers. To use a rugby analogy, we've done all the hard yards in the space of a year; with this $130M investment we are converting the try.

Deezer screenshot
"We're very pleased to receive this endorsement from an investor of Access' stature. They are knowledgeable and active in the media space and their entrepreneurial spirit is very close to who we are.

"With such a partner, our proven growth and our track record in profitability, Deezer is on the right track to becoming the leading digital music service worldwide and representing 5% of the music market by 2016."

Blavatnik, the chairman and founder of Access Industries, added: "Access Industries is delighted to have the opportunity to invest in Deezer, a state of the art music subscription service with enormous potential."

Having the owner of Warner Music Group - one of the now three remaining major labels with Universal and Sony BMG - in its corner will be a valuable asset for Deezer as it looks to compete with rivals such as Spotify, Pandora and We7.

However, Dauchez is clear that music streaming services must deliver for the entire music industry going forward if digital is to become a sustainable business.

"We don't believe in gambling on the future of music. Both the recovery and the future growth of the music business require companies like Deezer to develop profitable, long-term business models that deliver for all industry players - from authors and artists to digital distributors," he said.

"Specifically, the industry needs pure player distributors to ensure its future independence. Hence, we have always prioritised a sustainable approach within the race to take digital music global. This is a key reason why Access Industries has chosen to invest in Deezer."

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