Deezer, based in France, is an on-demand music streaming service, which offers an impressive range of tracks from a mix of major labels and independents.
It recently launched in the UK (see our review of the site), and we have been talking to UK Manager Paul Ricard to find out more…
How do you make money from the site?
The site is entirely funded by advertising, with the revenues split between the record labels, the artists through royalty collection agencies (SACEM and SESAM in France), and ourselves.
How is the site funded?
The site was initially funded by the two founders, Jonathan Benassaya andl Marhely, though we have had help from one of France’s ISPs, who let us use their offices at the start.
How many people do you have working on Deezer?
At the moment, we have 26 people working on Deezer, and have expanded this team rapidly over the past year. Last August, when we launched as Deezer, we had just 6 people, and even in January this year, 10 members of staff.
How many users?
Deezer is famous in France, where we have around 1m unique users daily since launching in August 2007. In France we were the first website to stream free, legal music. We have a total of 2m registered users and 5.5m unique visitors a month worldwide.
How many in the UK?
We launched in the UK two months ago, and have around 50,000 visitors per day so far.
What labels do you have deals with?
We have agreements with Universal and Sony BMG as well as a number of independent music labels. These agreements mean we have more than 2m songs available to listen to on demand, as often as users want to.
We are also negotiating with Warner, and hope to have some of its catalogue available soon on Deezer.
If you choose the Smart Radio option, there are even more songs available. The radio works by learning about your preferences and playing you music according to your tastes.
Tell me about the social features on Deezer
We are developing the community features on the site. Users can connect with each other, create their own playlists and even show these playlists via a widget on their blog or website, as well as Facebook and Bebo. So far, users have created around 3m playlists.
We would like Deezer to become a global music network, and are developing a player for Facebook.
Does Deezer learn from the music that users listen to on the Deezer Player, or just from the SmartRadio?
No, Deezer only learns from your tastes through the SmartRadio. Nevertheless, you can look for playlists made by users whose tastes are similar to yours, or create your own to fit your musical tastes ;-). You also have access to diverse thematic radios.
Pandora and other internet radio services have struggled recently, due to the rise in royalty rates in the US and UK – how does Deezer make a profit with these rates?
“Profit” is not the right term here. Deezer is still in a launch phase, and our challenge is composed of multiple elements: first, Deezer answers a strong increasing demand: internet users want access to a huge free catalogue (what is proved, unfortunately, by the success of illegal download).
Deezer answers this demand, by retributing the artists and right-owners, and all that, legally. Deezer also, with our editorial service, promotes many independent artists, through our homepage and our radios.
Do you think that the royalty rates you pay to the labels and royalty collection agencies are reasonable?
As I can’t answer personally in the name of the company, I will only tell you that Deezer is a strong alternative to illegal download, thus, Deezer strongly helps slow down illegal download, and helps artists and companies being retributed.
What percentage of your revenues are taken up by paying royalties?
6 to 8% of our revenues are for copyrights. 10 to 50% go to the major companies. The percentages may vary according to the way songs are listened to: Radio, SmartRadio, or Music On Demand.