Via @TheMusicVoid, posted by Decibel Music Systems
Music streaming platforms currently dominate the global conversation on the future of music, with debates touching upon streaming ethics, application survival, and monetisation methods. The usual suspects included in the discourse include Spotify, Deezer, Rdio, and Pandora. But in terms of on-demand streaming, Spotify leads the English-language media discussion. While Spotify holds 4 million paid users, its French competitor Deezer holds 2 million. Sure, only half the amount, as many journalists are keen to point out—but this will not remain a constant ratio in user growth.
The media attention around Spotify is no doubt a product of its presence and accessibility in English markets, particularly the UK and US. Deezer’s later entry in to the UK market and lack of presence in the US has made the French company seem less significant, seemingly following in Spotify’s wake and mimicking their overall strategy. While drawing immediate comparisons to Deezer seems logical, an evaluation of data aggregated from research, articles, and interviews carve out key differences in the applications, including business strategy and position, market dominance, user experience, and artist interaction.
Deezer focuses on specific, emerging markets with rising music consumption patterns, low customer acquisition costs, and high growth opportunities.1 They use telecommunications partnerships, like their initial collaboration with Orange in France, to compound their exposure in mobile as they release their product in key developing countries. Deezer hopes to secure these customers early in their mobile and digital music consumption habits.
Spotify continues to move in mature markets like the UK and US, gaining traction in the major global music centres. Their current challenge seems to be to secure US market by marketing their free service and securing a large user base to convert into paid-users with stiff competition from iTunes, Pandora, and Rdio. Note: Deezer currently does not have a free service and only has a trial offering.
Deezer operates in emerging and fast growing markets, including 35 Latin American countries, Asia, and soon Africa. This will no doubt influence the future artist partnerships and availability on the site. There will be closer attention to the greater access to internet, mobile payment systems, and smartphone accessibility in emerging markets.
Spotify will fight with major players in the developed and mature US, UK, and EU markets, while still pursuing other markets
Deezer is a browser based platform that considers its speciality in music discovery and recommendation service Nevertheless, as a browser-based application, it has its limitations: Multimedia keys do not work for control.
Spotify operates as a desktop application and can easily import local library music and playlists with easy navigation (as opposed to Deezer’s often noted clumsy online sync).
Deezer recently launched Deezer for Artists, allowing labels and artists to connect to fans on Deezer through social media aggregation and content curation.
Spotify’s app studio currently acts as a vehicle for fans to interact with artists. Artist apps, like those of One Direction, David Guetta, and Blur, are unofficial means for connection, but Spotify is expected to announce more features for artists.
While some might argue that these are merely semantic differentials and that the product offerings are identical, these factors still dictate how each company will proceed in their global business development and market acquisition patterns. The future of these two companies and their interaction will be something to watch, as Len Blavatnik’s (Warner Music) stake in Deezer may a major strategic future advantage for the company. It is also important to note that Deezer is reported to be a profitable company while the Spotify continues to publically struggle with its financial model.
Check out the table below which details music catalogue sizes territories launched in and core strategies moving forward for each service.