French music streamer Deezer reaped the benefits of its price hikes, as first-quarter revenue rose 15.0% to 132.5 million euros ($143.5 million at average exchange rates for the period). Average revenue per user (ARPU) also improved for direct and business-to-business subscribers from partners such as Brazilian mobile operator TIM and French retailer Fnac Darty.
Deezer has increased subscription prices in France, its biggest market, in January 2022 and in other markets later in the year. After Apple, Amazon, YouTube and Spotify followed with their own increases, Deezer increased its prices again in September 2023.
In the first quarter, ARPU for direct subscribers rose 6.4% to 5.1 euros ($5.50) as the latest price increase applied to more than 75% of them, while ARPU from partnerships improved 5.5 % to 2.9 euros ($3.1). Both ARPU figures have grown significantly over the past two years. Since the first quarter, direct ARPU has increased 13.3% from 4.5 euros ($4.9) and partnership ARPU has improved 20.8% from 2.4 euros ($2.6).
Partnerships produced most of Deezer's revenue growth in the quarter. While direct revenue from paid subscriptions rose 5.2% to 86 million euros ($93.1 million), revenue from partnerships rose 40.3% to 43.3 million euros ($46.9 million). Deezer provides its streaming platform for its partners' branded products. The company attributed the growth in partnerships to a recent deal with Mercado Libre in Latin America, RTL in Europe and Sonos. The company also renewed deals with TIM and Fnac Darty in the quarter.
The first-quarter improvement “highlights clear momentum and demonstrates that our strategy is on track,” the interim CEO said In Bergen in a statement. “Delivering unique experiences to music lovers around the world, Deezer delivers value and innovation to all our stakeholders. We continue to be a catalyst for positive change, challenging the status quo when it comes to pay and value, while maintaining our unwavering support for artists and songwriters.”
France accounted for the majority of Deezer's revenue (57.4%), although revenue in the country rose just 8.5% to 76.1 million euros ($82.4 million) over the year-ago period. Revenue in the rest of the world rose 25.2% to 56.4 million euros ($61.1 million) and accounted for 42.6% of revenue, up from 39.1% of revenue in the first quarter of 2023.
Although a relatively small player on the global music streaming scene, Deezer has been influential in the music industry's efforts to make streaming a more viable endeavor for musicians. In 2023, Universal Music Group partnered with Deezer for an artist-centric rights program that aims to provide better rights to professional musicians. Independent rights group Merlin followed in March.
Part of giving professional artists better pay is removing non-musical tracks (also called functional music) from the platform, and Deezer's earnings release confirmed that the company has removed more than 26 million tracks (non-artist content, noise and duplicates). from October 2023. The company also “enforce[es] a stricter provider policy to ensure great quality content and upgrade the user experience,” according to the release.
Looking ahead, Deezer maintained its previous guidance given in February: Adjusted EBITDA is expected to be better than -15 million euros ($-16.2 million) — about half of the -29 million euros (-31 million dollars) in 2023 — and revenue growth is expected at 10%, which would be an improvement from the 7.4% revenue growth it saw in 2023.
from our partners at https://www.billboard.com/business/streaming/deezer-earnings-revenue-up-subscription-price-increases-1235668933/
