June 5, 2015:Deezer: ‘We can’t throw out freemium until we have a viable replacement’

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Deezer’s newly appointed CEO Hans-Holger Albrecht isn’t worried about Apple’s imminent arrival into the streaming market, and killing freemium isn’t on his agenda, at least not yet.

There’s no point doing away with “something that’s working” Albrecht explained during an interview at Midem in Cannes today, while admitting there’s “no doubt” that streaming is cannibalising downloads.

“We are converting free to paid on all sides. Yes, we have to optimise freemium, but before we stop something that’s working, let’s wait until we have something to replace it with. Let’s not kill and draw conclusions too early, the business is starting to grow, we’re achieving global penetration.”

It’s that global penetration that Albrecht hopes will grow the streaming pie for everyone, as well as additional features that are tempting enough to convert unpaid users into subscribers.

“Our main business at Deezer is subscription, we try everything to get subscribers to [convert to] paid. It’s not that I’m concerned [about the freemium debate], but when we have those debates, if you talk about freemium, let’s talk about all the free music, and how can we reduce the free offering to customers in order to accelerate subscription [across the board],” he explained.

“But I think there will always be a portion of free, you’ll always have an element people that don’t want to pay, but I would not say get rid of this completely. I’m more than happy to debate how you define free and what we should not do is make free so attractive that nobody pays.”

According to Albrecht, there are currently one billion smartphone users worldwide, and that number will double in three-four years time thanks to mobile growth in emerging markets. Focusing on local curated content in those markets, as well as non-music features, will mean Deezer stands its ground amongst strong competition from Spotify and what is soon to be another big player, Apple.

Apple entering the streaming market is good news for everyone because it’s proven streaming “is the model for the future”, he said. “In some ways, Apple will help us a lot to educate. With Apple coming in and penetration going up to higher levels, the tide hits everyone, it will increase the opportunity for Tidal and Spotify too. [We’ll all] find [our] place and market segments. I’m not concerned, it’s a positive thing.

Thanks to a wealth of features that downloads don’t offer like playlists, lyrics and personalised radio channels, Albrecht is convinced streaming will be the consumers first choice for music consumption going forward. “[Streaming overtaking downloads] is the reason I joined this industry,” he added. Streaming is way more superior to the download business.”

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Rhian Jones
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