Not so long ago we were wondering which music-streaming service would jump first and put up its prices. But after a succession of such rises, now Deezer has jumped first in putting them up for a second time.
In a brief statement, Deezer said that the move was “to support continuous investment in innovation to deliver valuable support for artists and enhance fan experiences”. The rise covers premium and family subscriptions in the UK, France, Spain, Italy and the Netherlands.
This means in those countries, an individual premium subscription to Deezer will now cost €11.99 (£11.99 in the UK, although in that case it isn’t a rise) while family subscriptions are going up by €2 / £2 to €19.99 / £19.99 in these markets. For now, its comparable prices in the US remain $10.99 and $17.99.
Deezer had already increased its prices in the UK, Europe and the US in 2022, making it the first DSP to follow with a second rise – and quickly too. The move comes as the company prepares to launch its new ‘artist-centric’ payouts model with Universal Music Group (and, it hopes, other rightsholders) in France this year.
Those plans have been generating some criticism in recent weeks from the independent community, with Believe, Impala and AIM voicing their concerns about the new model being co-designed with UMG and then announced to the industry.
However, price rises are much less controversial within the music industry: a number of labels and bodies have called for them, and the idea that they should be regular increases rather than one-offs has also been gaining traction.
“We believe the market will bear further price increases in the future, and we’re expecting that they’ll arrive on a more regular cadence than in the past,” said WMG CEO Robert Kyncl in August during a company earnings call, for example.
So, two questions to ponder. First, will Deezer’s move spark a new wave of price rises from its rivals?
In one sense, its influence is limited: at the end of June it had 9.3 million subscribers, but only 5.6 million of them were paying it directly (as opposed to getting Deezer through its B2B partners like telcos and media groups).
That’s not market-shaking clout when rivals including Spotify, Amazon Music, Apple Music and YouTube are much bigger. However, as we’ve seen with the UMG announcement, Deezer can still make waves, especially when those waves are carefully aligned with the desires of major labels.
The second question: how will consumers react to a second wave of subscription increases if it happens?
Kyncl has stressed in two separate earnings calls that the first wave did not lead to a barrage of cancellations. “There is no sign that they are seeing elevated churn,” he said in May, before repeating that almost word-for-word in August: “There is no evidence that the services are experiencing elevated levels of churn.”
(Let’s not forget that his company, WMG, is part of the same corporate family as Deezer. Access Industries founder Len Blavatnik controlled just over 73% of WMG’s shares at the start of 2023 according to MBW, while even after Deezer went public, Access Industries owned nearly 37% of its shares. Which, as an aside, is a fun sub-plot to Deezer’s decision to shake up streaming payouts with UMG first.)
Anyway, no evidence of churn from the first set of price rises, but with a cost-of-living crisis still biting in various parts of the world, that’s no guarantee that a second set will be similarly received by subscribers.
Most people reading this story, we suspect, would agree that even at a couple of euros/dollars/pounds/etc more, a streaming subscription is excellent value given the size of the available catalogue and the features developed by the DSPs to help listeners navigate it.
To all of us, a second wave of price rises feels like a positive thing that will be good for music companies and artists/songwriters alike. But now we’re going to find out if listeners agree with us.
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