On-demand subscription service Deezer is finally be headed to the world's biggest music market. The France-based service is expected to launch in the United States in 2014, according to a major label source.
While a report at Digital Music News claims Deezer will launch in January, the source believes it would come later because of Deezer's need to launch with a telecommunications partner in tow.
In a statement to Billboard, a Deezer spokesperson said the company has been "prioritizing growing markets" with relatively low acquisition costs. A resource-intensive launch in a large country such as the United States, with high acquisition costs and an immature subscription market, would be aided by a strategic partnership. To that end, the spokesperson added "it’s no secret that we’ve been in discussions about possible strategic partnerships to speed up our launch in the U.S.”
Deezer's arrival would give the United States the world's two largest on-demand music subscription services. Backed by a $130 million investment from Access Industries, Deezer has more than five million global subscribers, up from two million a year earlier. The quality of that number was brought into question, however. A recent Financial Times article claimed Deezer's figure includes subscribers through telecom bundles and about half of the five million subscriptions were inactive. Spotify, available in the United States for more than two years, claims more than six million global subscribers, although the figure is nearly a year old and undoubtedly outdated.
A late arrival means Deezer will face numerous competitors from a standing start. Muve Music has 1.9 million subscribers. Rhapsody is thought to have about 1 million subscribers, most within the United States. Google Play Music All Access, Rdio, Sony Music Unlimited and Slacker's on-demand tier of service are also available here. Additional subscription services are on the way from YouTube and Beats Music.
A partnership with a mobile carrier would help Deezer quickly gain momentum in the United States. The company has employed the strategy in many other countries to help enter markets and acquire subscribers in a relatively affordable manner. For example, it has partnered with T-Mobile in Austria, Millicom in Latin America (under the Tigo brand) and Orange in Poland, Mauritius and Ivory Coast.
Finding a partner has been on the company's mind, CEO Axel Dauchez said in June. "We are considering the U.S. and are looking for the right strategic partner to go with," Dauchez told Billboard. "Perhaps it’ll be an established, existing big company in the U.S. which will make us significantly the biggest in the country. We don’t want to go by ourselves, invest millions of marketing and be perceived as (a medium ranked service)."