Analysis

Deezer update: 5m paying subscribers and new ‘Hear This’ discovery feature


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Streaming music service Deezer held an event in London this morning to unveil “two major platform developments and updates on Deezer’s performance”. The event was streamed live – you can watch an archived copy here – but we tuned in to cover the news and views of CEO Axel Dauchez as it happened.

The key news: Deezer has doubled its number of paying subscribers in the last year to more than 5m people, while the company now says it has 12m monthly active users overall. That’s an increase on the 10m active users it has been claiming for most of 2013.

More stats: Deezer now has 25 partnerships with telcos around the world, having added 11 in the last year, while its catalogue of music now spans 30m tracks. And the two new features were Hear This, providing daily music recommendations using a mixture of algorithms and human curators, and a Deezer desktop app for Mac computers.

On with the as-live notes…

“To reach the point we are here, it has been a lot of work, a lot of sweat, a bit of luck,” said Dauchez, kicking off the presentation. In the past year Deezer has grown from 80 staff to more than 300. “This adventure is only beginning.”

A year ago, Deezer raised $130m in a funding round, while telling journalists that it had grand ambitions to expand globally and improve its music discovery features. “Now we stand with first of all we are truly global, we are in more than 180 countries, which is almost everywhere,” said Dauchez, pointing out that Deezer isn’t just present in those countries: it has paying subscribers in them.

So, 30m tracks in Deezer’s catalogue, with a strong emphasis in the last year in adding local music from the countries it’s present in. “To make sure we get and gather the music catalogues from every music genre in the world,” he said, claiming that Deezer’s catalogue isn’t just the biggest of the various streaming services: “It’s also the most diverse: the one that fits exactly to what you need.”

Onto the 5m paying subscribers figure. “We multiplied our subscriber base by 2.5 in one year. Nobody else can do this. And we did it outside the US, so it’s a very strong footprint,” said Dauchez, citing the growing number of partnerships with telcos, which have risen from 14 a year ago to 25 now.

“We need to speed up, because the CD business is not so strong, even the download business is not so strong, so we need to speed up to make the global music market grow,” added Dauchez. “And we made the decision to lead the charge for innovation, not for the sake of innovation, but for music lovers.”

Onto the two new features, starting with Hear This. “Discovery is a critical factor which makes the link between the music creation and the listeners,” he said. “And more than that, discovery is critical for the people themselves. If you always listen to the same tracks, it maybe gives you short-term satisfaction, but it does not build your musical identity more.” So Deezer is very focused on getting people to listen to new tracks, albums and artists.

“Currently, the category is pretty poor about that. When you look at what is in the market today, of course there is recommendations and so on… Sometimes there is a reason to try, very rarely is there a reason to love… We need to build a step-change in our abilities to push the people to try and to discover new things.”

Dauchez said Deezer has significantly upgraded its network of editorial staff, up from 30 people a year ago to 50 now. Second, it’s been working on its algorithms, to understand what people are listening to, so it can recommend them more music: “not only based on what they listen [to] but how they listen… the type of listener they are.”

And third: Deezer is combining the two areas: editorial and algorithms. “We make the DNA with the people, we mix the engine with the people,” he said. That’s Hear This: “That will definitely drive the discovery to a step-change,” said Dauchez.

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Hear This will be part of a new Deezer homepage to launch in the coming days – two main options: Hear This and Explore. Hear This will be a feed of music recommendations, with new things every day based on the frequency of each user’s visits.

Dauchez showed the feed in action: the screenshot above shows a recommendation of the new M.I.A. album based on a pick by one of Deezer’s editorial staff, Sam. Lower down, another editor, Paola, recommended a ‘Happy Birthday, Jack White’ playlist based on the White Stripes – a playlist shown because this particular user had been listening to the band.

The Hear This feed also features purely-algorithmic recommendations. It’s a very similar idea to Spotify’s Discover feed, which launched earlier in the year with a similar mix of songs, artists and playlist picks.

“In the past service, we were recommending things, but we realised when as a user you try one, two, three, four times a track, and are one, two, three, four times disappointed, finally you reduce significantly your wish to discover,” said Dauchez.

The second option on the new Deezer homepage is Explore, which will offer recommendations by genre, region, label and timing (release date), as a way for people to explicitly look for new picks from Deezer’s editorial team.

“Today, 75% of the streams are done on mobile. I presented it to you on the web because it’s maybe easier, but the most important thing is this small tool,” said Dauchez, waving his smartphone. Hear This will work in Deezer’s Android and iOS apps in the coming weeks, in other words: Dauchez showed a quick demo of how the feed will look on phones.

He also showed that Deezer’s mobile apps will integrate the third-party apps developed for its platform – something Spotify has yet to launch in its apps, although it’s thought to be working on such integration.

The event moved on to a demonstration of Deezer’s new Mac app, which synchronises people’s iTunes music libraries with Deezer. “It’s just a beta version,” he said. “Maybe there will be some bugs. It will be a restricted beta, so not everybody will have it. But I could not resist to share it with you. I do believe it is a big change… The PC version will come afterwards.”

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Dauchez stressed that the app isn’t “heavy”, suggesting it’ll provide pure access to music, and focused recommendations: it looks like more of a desktop widget than a full-screen app. “It’s the essentials of Deezer in a very simple, quick and light application on your Desktop. And secondly, this is becoming the Dropbox of music,” he said.

Once people install the app, it’ll create a Deezer folder on the desktop containing all their albums and playlists – the tracks appear as .dz files, interestingly – “you can have 30m tracks practically on your laptop, but it can be accessible from anywhere: on your mobile, on your iPad, on anything”.

There are cloud features too: “It could be a remix that is not in the catalogue, so it is automatically recognised and put in ‘My MP3s’ and is accessed in the Deezer environment,” said Dauchez. “We believe this will help a lot of people make the step [from not streaming to streaming], and we mean a lot of people: maybe 60% of mobile users.”

He finished off with a rousing call to arms – we’ve transcribed it straight, but bear in mind Dauchez’ English (by his own admission) can result in unusual turns of phrase: “Today, the level of quality of the music streaming services needs to radically improve. We are at the beginning of the story. But just know it’s really a work-in-progress. And I will not rest until anyone has realised that you don’t any more have to waste your time in plugging wires and get your music somewhere,” said Dauchez.

“I won’t rest until anyone has realised that you don’t any more have to waste your music… But more than anything else, I will not rest until anyone has realised that you don’t need to waste your money. You know you can have access with Deezer to 30m tracks for the cost of a CD. To 30m tracks for less than the cost of a download of an album. Less than a gig ticket.”

Oh, but Dauchez also announced a pair of new hires for Deezer. Christopher Coonen has joined the company as group chief operating officer, charged with managing Deezer’s business operations. He was formerly boss of PayPal in France and continental Europe. Meanwhile, Gerrit Schumann, co-founder of rival streaming service Simfy, is Deezer’s new VP of Europe outside France.

The event finished off with a Q&A session. Dauchez was asked about trends with downloads versus streaming. “I think that the ownership of a file pretending to be the same as the ownership of a CD was the wrong statement. It meant something to own vinyl, to own a CD. It doesn’t mean anything to own a file,” he said.

“Because of some very smart ecosystems like Apple, there is a download market which today is much much larger than streaming… But for me the download is a transition technology. The transition for where a while, you took the physical world and replicated it in a digital product. But nobody feels that the ownership of a file means something. For me, the download will decrease. It will remain important because of the ecosystem… but we are moving towards a streaming world.”

Will the focus on discovery be good for artists, including those sceptical about streaming? “Discovery is definitely the most important thing for artists, again if you always listen to what you knew before, you won’t discover artists… Will it be enough to convince the artists to move towards streaming? I don’t know if it will be enough,” he admitted.

“The long-term success of streaming will be the ability to help an artist we like at this level, and move to this level [motioning low then high]… We need to act on music, if we don’t act on music, we are a jukebox… Discovery is a key asset to convince the artists to move to streaming.”

Stuart Dredge

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