Deezer CEO Hans-Holger Albrecht pulled no punches in a candid keynote where he touched upon the growth of streaming, lean-back listening, localization versus globalization, fairness in access and just where that money you pay for your service should go. Here are key points he touched upon
1. Big streaming growth is yet to come: While much of the conversation about streaming points to a mature market, it’s simply not true. “We are less than 7-8%” global penetration when it comes to streaming,” says Albrecht. In emerging markets, growth projections are particularly strong. “Latin America is the fastest-growing region for us,” says Albrecht, noting that revenue from the region doubled for Deezer in the past year, with Brazil, Mexico and Colombia growing "very fast."
2. "We believe in localization:" Streaming, for Deezer, is not just a global business but a local business. In Brazil, sertanejo channels are very popular, as is gospel. In Colombia, 80% of streaming is local music. "You need to adapt to local taste, otherwise you build a product no one wants to listen to."
3. Forget exclusives (at least in terms of singles): "I don't believe having songs be exclusive on a platform," says Albrecth flatly. Streaming has become successful because the listener can find all the music in a single place. "If you start to make it complicated it will hurt the business model. We would rather focus on non-musical content. That creates much more value."
4. How "Flow" provides "Lean Back Listening": "In the first phase people are active, in the second, people want to be entertained,” says Albrecht, noting research indicates that more than 50% of Deezer behavior is “lean-back,” where the consumer expects to be entertained after their initial contact with the service. Deezer’s “Flow” system is tailored to give each consumer the music he/she wants to listen to.
5. You Should Pay For What You Listen To: The money you pay to your streaming service is currently distributed according to a sort of marketshare calculation. Albrecht would like for your dollars to go only to those artists you listen to. A jazz fan, for example, shouldn't have to see his money go to a big pop star he/she never listens to. Conversations with other streaming services to change the model are currently ongoing.
6. Consolidation is imminent in the streaming marketplace: "We always believed there will be four or five big players."
7. The fairness of gatekeepers acting as streaming services: "It's a big concern, but not only for us. For everything that happens in the Internet," says Albrecht bluntly. Big players, he says, try to control where the consumer is going. "They do it by hardware and by software. They do it by voice control." If a consumer searches on Alexa, for example, it won't direct them to services like Spotify or Deezer. "Companies like Deezer and Spotify we only want to have fair competition. That’s the only kind of discussion we want to take with them, with Brussels and with whoever wants to be involved."