Careers at Deezer
Deezer’s mission is to bring audiences and artists together like never before, by embodying the thrill, intimacy, and delight of music discovery.
Daniel Marhely dropped out of school in France at the age of 16 to pursue his entrepreneurial interests. In 2004 he co-founded dating site Lovelee.com, which he worked on for two years. During that time he started a side project, hoping to make it simpler for people to find and listen to music. In 2006 that project was launched as Blogmusik.net, an online music streaming service.
Blogmusik.net immediately became popular among consumers. However, it was soon charged with copyright infringement by government agency SACEM for not having the rights to the music it offered. It was shut down in April 2007. In the next few months Marhely met with SACEM and reached an agreement to compensate copyright holders with money earned from ads on the site.
He also agreed to enable customers to download songs they streamed on the site from iTunes, with his company receiving a commission for each purchase. In August 2007 the service re-emerged with the new name Deezer, becoming the first legal music streaming website in France. Daniel then went about signing agreements with music labels in order to obtain rights to their artists’ songs.
Deezer appealed to customers by providing music recommendations. It had a team of music editors that suggested songs, but also utilized smart technology that used an algorithm to suggest music based on users’ listening history. Beyond advertising, it earned revenues through a premium subscription version that was ad-free and offered entertainment and sports content on-demand.
By May 2008 it had 2.75 million monthly active users, up from 773,000 in August 2007. However, the firm was not earning enough to offset the cost of music licensing fees. In February 2009 it made site registration mandatory so it could obtain more accurate user data and run more targeted ads, and also launched a three-tier service model with two different subscription services.
Despite these efforts, by January 2010 less than 15,000 of the company’s now 12 million users had signed up for its new subscription services. In August 2010 Deezer partnered with mobile operator Orange to include free access to Deezer Premium with some of its telecommunications contracts. Shortly afterwards the rate of subscription sign-ups exploded from 6,000 to 100,000 a month.
By 2011 Deezer surpassed one million subscribers and had rights to eight million songs. Later that year the company formed a partnership with Facebook enabling users to send each other music via the platform. By 2013 it had expanded its availability to Africa, Australia, Latin America, Asia, the United States, and all of Europe. In late 2015 it postponed plans to complete an IPO.
Business model of Deezer
Deezer has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at anyone who wants to stream music.
Deezer offers five primary value propositions: accessibility, convenience, customization, cost reduction, and brand/status.
The company creates accessibility by providing a wide variety of options. It is available for use on computers (PCs and Macs), mobile phones, tablets, smart watches, television sets, and in cars.
The company offers convenience by making life simpler for customers. The premium version of its platform features no ads or interruptions. Furthermore, users do not have to be connected to the Internet, as they can download songs to their devices. Deezer provides lyrics to songs on the device screen as they are played. Customers can cancel their subscriptions at any time. Lastly, it enables artists with songs on the platform to view analytics on their performance.
The company enables customization through its capabilities. It recommends music to customers based on their listening history. They can create tailored playlists of their favorite songs. It also allows artists who want to make their music available on the platform to create personalized Artist Pages.
The company reduces costs in a variety of ways. It offers new customers a free 30-day trial of its premium version so they can test it out. Afterwards, it only costs $9.99 a month.
The company has established a strong brand due to its success. It has 10 million active users in over 182 countries. It has 100 million playlists and offers 43 million music tracks, including everything from Top 40 singles to music by unsigned artists. Lastly, it has over 50 music editors who curate playlists.
Deezer’s main channels are its website and mobile app. The company promotes its offerings through its website, social media pages, and advertising.
Deezer’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides answers to frequently asked questions.
There is a co-creation element in that musical artists can upload their own music to be included in its inventory. There is also a community element in the form of a forum where customers can interact with each other.
Deezer’s business model entails maintaining and updating its platform for its users. Its platform includes its website and mobile app.
Deezer’s key partners are the media companies it signs agreements with to make its service available on their platforms (e.g., Orange and Facebook) and the technology firms it works with to make its service accessible on their devices (e.g., Samsung, Toshiba, and LG). The company also maintains the following types of partnerships:
- Unsigned Artist Distributors – The company maintains a list of firms it recommends for use by artists not signed to a label who want to put their music on its platform. These firms can oversee the licensing, distribution, and administration of the artists’ music. Specific partners include Tunecore, Record Union, CD Baby, ONErpm, Spinnup, and AWAL.
- Signed Artist Distributors – The company maintains partnerships with firms it recommends for use by artists who are signed to a label but do not yet have their music on its platform. Specific partners include Believe, Finetunes.net, The Orchard, Merlin, INgrooves, and state51 Conspiracy.
- Affiliate Partners – The company works with third parties that promote its offerings on their platforms (websites, mobile apps, etc.) in exchange for cash rewards.
Deezer’s main resource is its proprietary software platform, which serves over 10 million active users. It depends on human resources in the form of the engineers that maintain and update its platform and the music editors that curate its playlists.
Lastly, as a startup it has relied heavily on funding from outside parties, raising $217.5 million from seven investors as of January 2016.
Deezer has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are in the areas of administration and customer support/operations, both fixed costs.
Deezer has two revenue streams:
- Subscription Revenues – Revenues generated from fees charged to customers for use of its premium listening service
- Advertising Revenues – Revenues generated from fees charged to advertisers for promoting their offerings to non-premium users on its platform
info: Daniel previously served as Founder and Chief Technology Officer of dating website Lovelee.com, as a developer at Deewap (a digital development and web applications startup), and led the web team at Agrafe. He is an investor in Get.
info: Hans-Holger earned a Master of Law at the University of Freiburg and a Doctorate at the University of Bochum. He previously served as President and CEO of Millicom, as President and CEO of Modern Times Group, and as President and CEO of Viasat Broadcasting.
info: Alexander earned a Master of Economics degree at Ludwig-Maximilians Universität München. He previously served as Chief Operating Officer of the Greece region at Antenna Group and as Chief of Staff at Viasat Broadcasting.
info: Laurent earned an M.Sc. in Mechanical Engineering at San Jose State University and an MBA in Finance at MIT. He previously served as an Associate at Morgan Stanley, as a Manager at PwC, and as a Senior Auditor at Arthur Andersen.
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