Deezer, a music streaming service, announced revenue of 219 million euros ($218 million) in the first half of 2022, an increase of 12.1% as reported (+9.9% at constant currency) over the same time last year. This is due to a renewed concentration on a limited number of rich, established areas.
The Paris-based business brought in 132.4 million euros ($131.9 million), or 60.3% of its total sales, in France, up 11.1% from the previous year. The rest of the world’s revenue increased to 87 million euros ($86.7 million), up 13.6% from the same time last year, and represented 39.7% of total income, up from 39.1%. Brazilian sales increased by 25% at constant currency, making it the second-largest market for Deezer.
Other revenue, which includes advertising and auxiliary revenue, increased by 58.3% (or 50.3% at constant currency) to 6.8 million euros ($6.8 million), mostly as a result of one-time income from a relationship with the hardware business.
At the midpoint of 2021, Deezer’s subscriber base fell from 9.7 million to 9.4 million. It lost clients in the business-to-business and business-to-consumer industries, which was a result of its choice to concentrate on a smaller number of very lucrative, huge markets.
Due to cutting back on what it called “unprofitable investment in non-core, long-tail areas, which had an impact on the acquisition of new customers in these regions,” Deezer gained 300,000 B2B members in France but lost 500,000 worldwide.
Deezer’s B2C average income per user increased 13.2% to 4.6 euros ($4.6) thanks to pricing hikes and a focus on larger regions. A 7.2% increase in B2B ARPU to 2.5 euros ($2.5) helped offset the loss of 100,000 B2B subscribers.
Deezer set out to grow its companies with a bigger worldwide presence in the beginning, in contrast to competitors like Spotify, which first concentrated on well-established regions in Europe and North America. More than 180 markets, including several minor nations in Asia and Africa, used the service as of 2013.
Today, its efforts are concentrated on fewer, more mature areas that many music industry executives consider to be far from saturated.
“With a highly competitive product, a clear strategy, a renewed and experienced management team, supported by a strong new Board of Directors, I am very confident that we are now perfectly positioned to accelerate our growth, and deliver substantial value for all our stakeholders.” Jeronimo Folgueira, the CEO, stated in a statement.
455 million euros ($454 million) in the second-half forecast from Deezer would represent a 14% annual increase. In the second half of the year, it anticipates that the German release of the RTL+ Music app would hasten B2B growth. Deezer also started a brand campaign this week to target Generation Z customers in its three key countries, France, Germany, and Brazil.