Paris-listed streaming firm Deezer has a brand new Director on its Board: former Warner Music Group govt, 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 most important 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 also 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 this time (February 28), on account of “time constraints and a have to prioritize different enterprise ventures”.
All of that information was launched earlier at this time 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 forex 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 forex.)
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, mentioned Deezer, by “the constructive influence 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 this time that this YoY improve in working losses was primarily on account 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).
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 section (down ≈100,000 YoY to 5.6 million) and its B2B section (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 greater than Deezer’s complete subs base on the shut of the yr.
“The continued subscriber development 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 traders at this time.
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 value 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 many who pay a full yr upfront.
In a report back to traders printed at this time, Deezer wrote that these value will increase had affected “circa 94% of B2C subscribers at year-end with no influence on churn”.
The ‘B2B’ aspect of its enterprise, based on 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, mentioned Deezer, noticed +12% YoY income development in 2022, and a +14% YoY ARPU development.
“Regardless of very difficult market situations in 2022, we have been in a position to safe sufficient funds to completely execute our plan. We elevated revenues by 13% with development in all segments and geographies, whereas reducing losses within the core enterprise by €18m and setting a transparent path to profitability.”
Jeronimo Folgueira, Deezer
Jeronimo Folgueira, Chief Govt Officer of Deezer, mentioned: “I’m very pleased with what we achieved in 2022 and I want to thank the workforce for an excellent execution of our technique over the previous 12 months. Becoming a member of Deezer, I had 4 clear targets; safe funding, improve differentiation, obtain double-digit development and attain profitability. Regardless of very difficult market situations in 2022, we have been in a position to safe sufficient funds to completely execute our plan. We elevated revenues by 13% with development in all segments and geographies, whereas reducing 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 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 approach to remodel Deezer from a standard 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 firstly of a really thrilling journey for Deezer and in 2023 we are going to proceed to evolve by differentiation and improved profitability.”
Discussing Stu Bergen’s appointment to the Deezer board, Iris Knobloch, Chairwoman of the board of administrators of Deezer, mentioned: “Stu will add invaluable views to the Deezer board along with his appreciable expertise from a number of disciplines at main file labels. On behalf of the board of administrators, I’d like to increase my gratitude to Amanda Cameron for her glorious contributions throughout her tenure. She introduced distinctive and extremely helpful insights as an artist, producer and businesswoman within the music business.”
Stu Bergen mentioned: “I’m really wanting ahead to working with the Deezer board and management workforce, supporting the ambition to attach artists and followers in significant and interesting methods, as the corporate continues to create worthwhile development and develop 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 subsequent stage.”
Jeronimo Folgueira, CEO, Deezer mentioned: “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 and marketing experience, which can undoubtedly be helpful as we take our subsequent bold steps in an more and more aggressive music streaming market.”
All EUR-USD conversions on this report have been made on the annual common charge offered by the IRS.Music Enterprise Worldwide