Germany’s ProSiebenSat.1 Takes Stake in Music Streaming Service Deezer

ProSieben will merge its own music streaming company Ampya with French-based Deezer, which will have access to editorial content from the German media giant.

German media giant ProSiebenSat.1 continues its Internet shopping spree, taking a strategic stake in fast-growing, Paris-based music streaming service Deezer.

Deezer, which already operates in more than 180 countries, will take over the operations of ProSieben's music streaming subsidiary Ampya. Ampya boss Michael Krause has been named the new managing director of Deezer for German-speaking Europe.

Financial details of the deal, announced Tuesday, were not disclosed, but German newspaper Die Welt, has reported ProSieben's stake as just under 50 percent of Deezer. The French group raised close to $150 million in its most recent investment round, including some $130 million from Access Industries.

For Deezer, the deal will give it instant scale in the German-speaking market, where ProSiebenSat.1 is a major player as the region's largest commercial television group. Deezer will take over Ampya's deal to provide music and music content to mobile carrier Vodafone. Deezer will also have access to ProSiebenSat.1's content library, including music news and videos from ProSieben's online MyVideo platform. In addition to streaming music and radio stations, Ampya has hosted some major music events in Germany, including the world premiere release of Lady Gaga's "ARTPOP" album in Berlin.

It is unclear what the new partnership with ProSiebenSat.1 will mean for an eventual U.S. launch of Deezer. The company is widely rumored to be preparing a U.S. bow later this year.

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Deezer currently has 5 million paid subscribers to its music streaming portal, which offers some 30 million songs. That's around half the number of Swedish streaming giant Spotify, but France's Deezer, with 16 million active users versus Spotify's 40 million, has a much better ratio of paid users, which could mean stronger revenue growth as the company scales up.

“Deezer and ProSiebenSat.1 are moving forward together,” said Gerrit Schumann, vice president of Deezer Europe. “With Deezer we are offering the most intuitive personalized music service on the market. With the reach of the ProSiebenSat.1 Group we will be allowing an even larger audience unlimited access to our music catalogue.”

Added Christian Wegner, executive board member of ProSiebenSat.1: “Deezer’s many years of expertise combined with the marketing power of our TV group provide the best prerequisites for reaching the number one position in Germany, the third biggest music market in the world -- and that is our common goal.”

The deal amid signs of both growth and consolidation in the music streaming business. Apple shelled out $3 billion for Beats Electronics in a deal that included streaming service Beats Music; Google is reportedly circling curated music streaming service Songza and Spotify is thought to be preparing for an IPO.

For ProSiebenSat.1, the Deezer deal is in line with the TV giant's aggressive online acquisitions strategy that has seen the group recently take equity stakes in L.A.-based online platform Talenthouse and U.S. Multi-Channel Network Collective Digital Studio.

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