Deezer CEO Hans-Holger Albrecht

Earlier this week, Deezer announced plans to file for an IPO in Paris. As part of the process, the company has published selected details about its business to date, which make for fascinating – if sometimes worrying – reading. Starting with an issue that’s always been hovering in the background for Deezer: how many of its subscribers aren’t actually using the service. It turns out that the answer is more than half of them.

According to Deezer’s IPO document, the company ended June 2015 with 6.34m total subscribers. Of those, 1.54m were “standalone”, paying full whack for the streaming service. Another 1.46m were monthly active bundle subscribers, getting Deezer bundled into their mobile contracts. But 3.34m are classed as “monthly inactive bundle subscribers”, who hadn’t played a single stream on Deezer in the previous month. In other words, just under 53% of Deezer’s subscribers aren’t using the service.

This does not mean they’re not making any money for Deezer: 796k of these inactive subscribers are still “revenue-generating” through its telco deals, meaning that Deezer’s total of revenue-generating subscribers is 3.79m. That’s still enough to make the company the second biggest music subscription service behind Spotify, albeit with a narrower gap to third-placed Rhapsody/Napster’s 3m subscribers than was previously thought.

Note, too, that Deezer’s flagship bundle partnership with Orange in France – which generated 24% of the company’s revenues in the first half of 2015 – stopped signing up new subscribers at the end of 2014, with Deezer now having to persuade existing subscribers from this deal to migrate to its standalone service.

The document has plenty of other facts providing an insight into how Deezer works. The three major labels, for example, account for 13% of its catalogue but 67% of the music streamed on Deezer. There are also several mentions of the potential impact of ad-blocking software on Deezer’s business: including users blocking the pop-up ads it uses to encourage signups to its premium offering. And there’s the information that France still accounts for just under 52% of Deezer’s standalone and monthly-active bundle subscribers.

Finally, of course, there are the overall figures: Deezer’s growth from €92.8m of revenues in 2013 to €141.9m in 2014, and €93.2m in the first six months of 2015. But also its losses: €22.1m in 2013, €27.2m in 2014 and €9m in the first half of 2015. While these figures will understandably be the headline for much of the coverage of Deezer’s IPO, what the document shows is that the devil for streaming music is in the details.

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