Deezer Extends into Latin America
Music subscription service Deezer has expanded to 35 Latin American countries. Based in France, the service is now available in Mexico, Argentina, Colombia, Puerto Rico, Ecuador, Jamaica, Guetamala and other countries in Central and South America and the Caribbean.
Deezer believes its success in Latin America will depend on partnerships, although the company has not yet announced a partnership with a local mobile operator, for example, or an Internet service provider. The service costs either $3.49 or $4.25 (depending on the country) for PC streaming and either $6.99 or $8.49 for PC and mobile access. In Mexico, Deezer will be priced in pesos at $69.5 for PC access and $139 for PC and mobile.
Unlike Spotify, Mog and Rdio, Deezer does not offer free on-demand listening (other than a free 15-day trial). However, Deezer does offer free listening to non-interactive radio channels.
So how did Deezer grow to 1.5 million subscribers and 23 million users in 51 countries? It has navigated around the top two music markets in the world -- the U.S. and Japan -- and targeted all other regions. Mark Foster, managing director of Deezer U.K. told Billboard.biz last year a number of factors stand in the way of a U.S. launch. "The timing of when and whether Deezer goes into the States will depend on a number of factors -- economic factors, potential profitability and being able to negotiate correct deals with the labels, so it's too early to say."
In bypassing the U.S., Deezer avoids direct competition with a handful of established (to varying degrees) subscription services while missing out on a market that has become well educated on the subscription model's value proposition. It also misses the world's biggest music market. But it avoids the high cost of acquiring licenses in the U.S. If the cost of licensing music for on-demand services is ever to come down -- as many people would like to happen -- companies like Deezer could speed the process by avoiding the market altogether. ( Deezer press release)
Details on iTunes Match Royalty Payments Emerge, Lower than Spotify
It seems like iTunes Match has been left out of all the talk about streaming royalties while people focus on what Spotify is or isn't paying. Fortunately, David Harrell of the band the Layaways has posted some details from his band's CD Baby royalty statement that show iTunes Match paid out 0.012767 cents per stream in November, 0.12083 cents per stream in December, 0.20231 cents per stream in January and 0.25946 cents per stream in February (all numbers are before CD Baby's 9% distribution fee). iTunes Match basically pools money and pays out to rights owners. A rising per-stream payout suggests people may be listening less often over time.
"As for the Spotify comparison," Harrell writes, "keep in mind that Spotify rates also vary, based on the subscriber's plan (free or one of two premium options), prices for different regions, and exchange rates. Last year, I posted that we had received per-play payouts ranging from a low of .02056 cents to a high of 1.1456 cents, with an average of .2865 cents. Since then, our average Spotify payment has increased to .41792 cents per play, so the current trend will have to continue for iTunes Match payouts to approach the average Spotify rate."
Given those rates, iTunes Match is coming in below traditional on-demand streaming services like Spotify. But, as Harrell points out, iTunes Match is akin to found money. There is no concern that iTunes Match will cannibalize purchases, which is a concern some people have of subscription services. iTunes Match users already have downloads and are paying Apple an annual fee to access their collection from connected devices.
In any case, it would be wrong to get hung up on per-stream payouts. What's missing from this discussion is the amount of money received from iTunes Match relative to amounts received from other streaming services. Per-stream payouts are one part of the equation. The other part is the number of people using a service. ( Digital Audio Insider)
Physical Most Reliable, Online Is Most Preferred Method of Purchasing
Physical retail just can't be beat for safety and reliability but buying on a PC is consumers' favorite purchase experience and mobile simply lags, according to Nielsen. While 69% of U.S. consumers believe in-store purchases are the most reliable, only 28% say the same for online PC purchases and just 11% believe purchases made on mobile devices are the most reliable. A similar breakdown is seen for the safety of purchases: 77% for in-store, 22% for online PC and 7% for mobile.
But online PC purchases rank best in easiest (68%) and most convenient (68%) categories while physical retail fails in both categories (20% for easiest and 13% for most convenient). Overall, online PC is the preferred method of purchasing for 59% of U.S. consumers, followed by 31% for physical retail and 13% for mobile. ( NielsenWire)