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We reported yesterday on Deezer’s confirmation that it is listing publicly via a SPAC merger with I2PO, including its announcement that it ended 2021 with 9.6 million subscribers and €400m of annual revenues. Now the full announcement has been published, with many more numbers showing how Deezer’s business has been growing.

The blunt summary: it’s not been growing very fast. Deezer breaks down its subscribers and revenues into two categories: ‘Direct – B2C’ which is people who signed up for a Deezer subscription directly, and ‘Indirect – B2B’ which is people who get the service through a partner (telcos, for example).

Deezer’s direct subscribers grew from 4.6 million at the end of 2019 to 5.5 million at the end of 2020, but then just 5.6 million at the end of 2021. Its B2B subscribers fell from 4.2 million in 2019 to 3.9 million in 2020, then stayed flat in 2021. Combine the two, and Deezer only added 0.2 million net new subscribers in 2021. The obvious comparison, Spotify, added 25 million net new subscribers that year to reach 180 million.

As for revenues, Deezer’s grew from €381m in 2019 to €379.2m in 2020 and then €400m in 2021 – year-on-year growth of 5.5% in the latter. By the same comparison, Spotify saw its revenues grow by 22.7% in 2021 to €9.67bn, making it 24 times larger than Deezer by revenues, and nearly 19 times larger by subscribers.

None of this is to pour scorn on Deezer, but rather to illustrate the challenge that it (and its fellow ‘challenger’ global DSPs like Tidal and Napster) faces in an environment where Spotify, Apple Music, Amazon Music and YouTube Music are the 900lb gorillas.

More context for Deezer’s scale comes in its breakdown of its revenues geographically: 60.7% of them came from France in 2021, up from 54.8% in 2019 and 59.5% in 2020. Contrary to what you might expect, the company’s business has been getting more dependent on its homeland in recent years rather than less – although it did note €28.1m of 2021 revenues from Brazil, a market where Deezer estimates it has a 20% market share of subscribers.

CEO Jeronimo Folgueira, who was appointed in May 2021 and recently talked to Music Ally about his ambitions for the company, will be hoping Brazil shows Deezer’s potential for growth elsewhere in the world.

The SPAC announcement outlines the company’s four ‘strategic pillars: focusing on selected ‘large’ markets including the US, UK, Canada, Italy and Spain; a ‘partnership-first’ approach making more of the B2B side of Deezer’s business; plans to pitch itself as the ‘Home of Music’ (a jab at Spotify’s growing emphasis on non-music content as well as the multi-pronged businesses of Big Tech rivals); and ‘operational excellence’ around pricing, marketing and new verticals.

And profitability? That’s another challenge Deezer will be working on, having seen its operating losses grow from €82.7m in 2019 to €88.3m in 2020 and then €120.6m in 2021. Once it’s a listed company, we’ll get quarterly insights into its progress on that front, as well as more comparisons with fellow public firm Spotify.

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