With a newfound focus on a small number of lucrative, established markets, music streaming company Deezer reported revenue of 219 million euros ($218 million) in the first half of 2022, up 12.1% as reported (+9.9% at constant currency) versus the prior-year period.
The Paris-based company received 132.4 million euros ($131.9 million), or 60.3% of its revenue, in its home country of France, up 11.1% year-over-year. Revenue from the rest of the world improved to 87 million euros ($86.7 million), up 13.6% from the prior-year period, and accounted for 39.7% of revenue, up from 39.1% a year ago. In Brazil, Deezer’s second-largest market, revenues improved 25% at constant currency. Other revenue — advertising and ancillary revenue — grew 58.3% (50.3% at constant currency) to 6.8 million euros ($6.8 million), mostly from one-off revenue from a hardware company partnership.
Deezer’s subscribers dropped to 9.4 million from 9.7 million at 2021’s halfway point. It lost customers in both business-to-business and business-to-consumer segments, a reflection of its decision to focus on a smaller number of large, attractive markets. Deezer added 300,000 B2B subscribers in France but lost 500,000 in the rest of the world due to stopping what it called “unprofitable spend in non-core, long-tail markets, therefore impacting the acquisition of new subscribers in these markets.”
Deezer’s focus on more substantial markets, however, along with price increases, helped its B2C average revenue per user grow 13.2% to 4.6 euros ($4.6). B2B ARPU improved 7.2% to 2.5 euros ($2.5), helping compensate for the loss of 100,000 B2B subscribers.
Unlike peers such as Spotify, which originally focused on established markets in Europe and North America, early on Deezer aimed to build its businesses with a larger global footprint. By 2013, the service operated in more than 180 markets, including many small countries in Africa and Asia. Today, its efforts are focused on a smaller number of established markets that numerous music executives believe are 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,” chief executive Jeronimo Folgueira said in a statement.
Deezer second-half guidance of 455 million euros ($454 million), which would be 14% annual growth. It expects the launch of the RTL+ Music app in Germany to accelerate B2B growth in the second half of the year. Also, this week, Deezer launched a brand campaign in its three core markets — France, Germany and Brazil — to target Generation Z consumers.