Paris-listed streaming firm Deezer has a brand new Director on its Board: former Warner Music Group government, Stu Bergen. The appointment is efficient instantly.
Bergen was previously the long-time CEO of Warner’s Worldwide Recorded Music operations exterior the US and UK. After 14 years at Warner, he left the key music firm in January 2021.
There’s a long-running hyperlink between Deezer and WMG, in fact: Warner Music Group’s controlling shareholder, Entry Industries, can be a shareholder within the music streaming agency. (Entry was the principal shareholder in Deezer earlier than the latter agency went public in Paris by way of a SPAC merger with I2P0 in 2022; Entry stays a stakeholder in Deezer post-flotation.)
As Chairman of Deezer’s board, Bergen succeeds Amanda Cameron (aka Amanda Ghost), who, after being appointed after Deezer’s IPO final yr, resigned from her place as Director at present (February 28), because of “time constraints and a must prioritize different enterprise ventures”.
All of that information was launched earlier at present following the publication of Deezer’s FY 2022 outcomes, which present that the French-born firm generated EUR €451.2 million (USD $474m) in total income final yr.
That was up by 10.6% YoY at fixed foreign money on the equal determine from FY 2021.
(Simply north of 60% of the €451.2 million income generated by Deezer in 2022 was spent in France. The corporate’s French revenues stood at €273.2 million throughout the course of final yr, up 12.6% YoY at fixed foreign money.)
Deezer’s gross profitability improved in 2022, with an adjusted gross revenue of €98.0 million (USD $103m) vs. €84.1 million within the prior yr.
This enchancment was partly pushed, stated Deezer, by “the constructive affect of the shutdown by the group of [our] freemium service in some nations”.
This can be a vital change of technique: Again in 2012, Deezer launched its ‘freemium’ (i.e. ad-supported) tier within the UK and 149 different nations, with commentators suggesting it was “going head-to-head with Spotify“.
Regardless of improved margins when it comes to gross revenue in 2022, Deezer was nonetheless operationally a heavy loss-maker.
Deezer’s working loss in 2022 weighed in at €166.7 million (USD $175m), a widening on the €120.6 million working loss it posted within the prior yr.
The agency clarified at present that this YoY improve in working losses was primarily because of a €54.9 million non-cash itemizing service cost ensuing from the SPAC merger between Deezer and I2PO.
Deezer’s adjusted EBITDA in 2022 stood at €55.7 million, narrowed from a €64.6 million adjusted EBITDA in 2021 (see beneath).
Subscriber loss
In accordance with its newest outcomes, Deezer completed 2022 with 9.4 million subscribers globally – down on the 9.6 million subs the corporate counted on the finish of 2021.
The agency misplaced subscribers in each its B2C phase (down ≈100,000 YoY to 5.6 million) and its B2B phase (down ≈200,000 YoY to 3.8 million).
For comparability’s sake: Spotify completed 2022 with 205 million paying subscribers.
The quantity of web subscribers added by SPOT in simply the ultimate quarter of 2022 (+10m) was larger than Deezer’s whole subs base on the shut of the yr.
“The continued subscriber progress in France, pushed by B2C, allowed [us] to partially offset a lower within the Remainder of World as a result of group’s technique to concentrate on chosen key markets,” defined Deezer RE: its 2022 subscriber decline in a observe to buyers at present.
Deezer’s ‘B2C’ enterprise, clearly sufficient, represents its direct accounts from prospects; its ‘B2B’ enterprise represents subscriptions secured by way of business-to-business partnerships.
Current examples of Deezer’s B2B hook-ups embrace offers with Sonos within the US, RTL in Germany, and DAZN – one other Entry Industries firm – in Italy.
ARPU and worth rises
Deezer’s premium ARPU (common income per consumer) considerably improved in 2022 up by EUR€0.50 per thirty days to €4.00.
This climb in ARPU was pushed by Deezer’s quietly-increased costs: The agency’s Premium subscription tier now prices GBP £11.99 per thirty days within the UK, EUR €10.99 per thirty days in key European markets like Germany, and USD $10.99 per thirty days within the US, though reductions can be found for individuals who pay a full yr prematurely.
In a report back to buyers revealed at present, Deezer wrote that these worth will increase had affected “circa 94% of B2C subscribers at year-end with no affect on churn”.
The ‘B2B’ aspect of its enterprise, in response to Deezer, is “worthwhile”, rising by +10% YoY when it comes to income in 2022, and +12% YoY when it comes to ARPU.
The unprofitable ‘B2C’ enterprise, stated Deezer, noticed +12% YoY income progress in 2022, and a +14% YoY ARPU progress.
“Regardless of very difficult market circumstances in 2022, we had been in a position to safe sufficient funds to totally execute our plan. We elevated revenues by 13% with progress in all segments and geographies, whereas chopping losses within the core enterprise by €18m and setting a transparent path to profitability.”
Jeronimo Folgueira, Deezer
Jeronimo Folgueira, Chief Govt Officer of Deezer, stated: “I’m very happy with what we achieved in 2022 and I want to thank the staff for an impressive execution of our technique over the previous 12 months. Becoming a member of Deezer, I had 4 clear objectives; safe funding, improve differentiation, obtain double-digit progress and attain profitability. Regardless of very difficult market circumstances in 2022, we had been in a position to safe sufficient funds to totally execute our plan. We elevated revenues by 13% with progress in all segments and geographies, whereas chopping losses within the core enterprise by €18m and setting a transparent path to profitability.”
He added: “2022 was additionally a yr of differentiation for Deezer, establishing ourselves because the go-to participant for tailor-made music options by way of thrilling partnerships, together with RTL+ Musik in Germany and Sonos within the US. Furthermore, with a brand new product imaginative and prescient, we’re on our technique to rework Deezer from a conventional DSP to a supplier of distinctive music experiences.
“Our relationship with the labels is stronger than ever and they’re key companions in our quest to enhance economics within the music ecosystem. We’re solely at the start of a really thrilling journey for Deezer and in 2023 we’ll proceed to evolve by way of differentiation and improved profitability.”
Discussing Stu Bergen’s appointment to the Deezer board, Iris Knobloch, Chairwoman of the board of administrators of Deezer, stated: “Stu will add beneficial views to the Deezer board together with his appreciable expertise from a number of disciplines at main document labels. On behalf of the board of administrators, I’d like to increase my gratitude to Amanda Cameron for her wonderful contributions throughout her tenure. She introduced distinctive and extremely helpful insights as an artist, producer and businesswoman within the music business.”
Stu Bergen stated: “I’m really trying ahead to working with the Deezer board and management staff, supporting the ambition to attach artists and followers in significant and interesting methods, as the corporate continues to create worthwhile progress and increase globally. It’s an thrilling alternative and after 30+ years within the music business, I hope to contribute with helpful insights and experiences, working with Deezer to take the enterprise to the following stage.”
Jeronimo Folgueira, CEO, Deezer stated: “With Stu becoming a member of, we’re including three many years of music business expertise to the Deezer board, together with promotion and advertising experience, which can undoubtedly be helpful as we take our subsequent formidable steps in an more and more aggressive music streaming market.”
All EUR-USD conversions on this report have been made on the annual common price supplied by the IRS.Music Enterprise Worldwide
