Deezer generated over $470m in 2022, lost $175m, and just named Stu Bergen as a Director on its Board

Paris-listed streaming company Deezer there is a new Director on the Board of Directors: former Warner Music Corporation Managing Director, Stu Bergen. The appointment is effective immediately.

Bergen was previously the longtime CEO of Warner’s International Recorded Music operations outside the US and UK. After 14 years at Warner, Mr leaving a big music company in January 2021.

Of course, there is a longstanding connection between Deezer and WMG: the controlling shareholder of Warner Music Group, Access industries, is also a shareholder of the music streaming company. (Access was Deezer’s main shareholder before the company later went public in Paris through the merger of SPAC with I2P0 in 2022; Access remains a stakeholder in the Deezer post-flotation.)

As Chairman of the Board of Directors of Deezer, Bergen succeeds Amanda Cameron (aka .) ma amanda), who was appointed following Deezer’s IPO last year, stepped down as Director today (February 28), due to “time constraints and the need to prioritize other business ventures” .

All that news was released earlier today following the release of Deezer’s fiscal 2022 results, suggesting that the French-born company has generated 451.2 million euros ($474 million) in total revenue last year.

It’s up by 10.6% annually in constant currency on an equal basis from fiscal year 2021.

(Just north of 60% Later €451.2 million the revenue generated by Deezer in 2022 was spent in France. The company’s sales in France stood at €273.2 million during the last year, increased 12.6% annually in fixed currency.)

Deezer’s gross profit improved in 2022, with adjusted gross profit of €98.0 million (US$103 million) compare to €84.1 million in the previous year.

This improvement, Deezer said, was partly driven by the “positive impact of the group’s shutdown.” [our] freemium service in some countries”.

Here’s an important strategic shift: Back in 2012, Deezer launched a ‘freemium’ (i.e. ad-supported) tier in the UK and 149 other countries, with commentator suggests that it is “confronting with Spotify“.

Despite improving gross margins in 2022, Deezer remains a loss-making company.

Deezer’s operating loss in 2022 is heavy at 166.7 million euros ($175 million)expand on €120.6 million operating loss it posted in the previous year.

The company clarified today that the increase in operating loss year-on-year was mainly due to €54.9 million cashless listing service fee arising from the merger of SPAC between Deezer and I2PO.

Deezer adjusted EBITDA in 2022 stands at €55.7 millionnarrow from one €64.6 million Adjusted EBITDA for 2021 (see below).

lost subscriber

According to its latest results, Deezer ended 2022 with 9.4 million won subscribers globally – discount on 9.6 million won subscriptions that the company charges at the end of 2021.

The company lost subscribers in both its B2C segment (down ≈100,000 annually ARRIVE 5.6 million won) and its B2B segment ( ≈200,000 annually ARRIVE 3.8 million won).

For comparison: Spotify finished 2022 with 205 million won paying subscribers.

Net subscribers added by SPOT only in the last quarter of 2022 (+10m) is larger than the entire Deezer sub-base at the end of the year.

“Continuous subscriber growth in France, driven by B2C, allows [us] to partially offset the drop in Rest of the World due to the group’s strategy to focus on selected key markets,” explains Deezer RE: their 2022 drop in subscribers To be Note to investors Today.

Deezer’s ‘B2C’ business, apparently enough, represents accounts directly from customers; Its ‘B2B’ business represents subscriptions secured through business-to-business partnerships.

Recent examples of Deezer’s B2B connectivity include deals with Sonos in the US, RTL in Germany and DAZN – another example. Access Industries Co., Ltd – in Italy.

ARPU and price increase

Deezer’s premium ARPU (average revenue per user) is significantly improved by 2022 to EUR €0.50 every month to €4.00.

This increase in ARPU is driven by Deezer’s quietly rising price: Company Premium subscription level now cost GBP £11.99 every month in the UK, €10.99 per month in key European markets such as Germany, and USD $10.99 per month in the United States, although discounts are available to those who pay for a full year in advance.

in one investor report Published today, Deezer wrote that these price spikes affected “approximately 94% of B2C subscribers at the end of the year with no impact on churn.”

According to Deezer, the ‘B2B’ aspect of its business is “profitable”, growth +10% annually on revenue in 2022, and +12% annually in terms of ARPU.

Deezer Says ‘B2C’ Business Unprofitable +12% annually revenue growth in 2022 and +14% annually ARPU growth

“Despite very tough market conditions in 2022, we were able to secure enough funds to fully implement our plan. We increased revenue by 13% with growth across all segments and geographies, cut 18 million euros in loss in our core business and established a clear roadmap to profit.”

Jeronimo Folgueira, Deezer

Jeronimo Folgueira, CEO of Deezer, said: “I am very proud of what we have achieved in 2022 and I would like to thank the team for the outstanding execution of our strategy over the past 12 months. . Joining Deezer, I have four clear goals; Secure capital, increase differentiation, double-digit growth and be profitable. Despite the very difficult market conditions in 2022, we were able to secure enough funds to fully implement our plan. We increased revenue by 13% with growth across all segments and geographies, cut 18 million euros in loss in our core business and established a clear roadmap to profit.”

He added: “The year 2022 is also a different year for Deezer, establishing itself as a leading player for tailored music solutions through exciting partnerships, including RTL + Musik in Germany and Sonos in the US. Furthermore, with a new product vision, we are on track to transform Deezer from a traditional DSP into a provider of unique music experiences.

“Our relationships with music labels are stronger than ever, and they are key partners in our efforts to improve the economics of our music ecosystem. We are just at the beginning of a very exciting journey for Deezer and in 2023 we will continue to grow through differentiation and improving profitability.”

Discussing the appointment of Stu Bergen to the Deezer board, Iris Knobloch, Chairman of the Deezer board, said: “Stu will add valuable perspectives to the Deezer board with its experience. considerable amount of him from many fields at major record labels. On behalf of the board of directors, I would like to thank Amanda Cameron for her outstanding contributions during her tenure. She brings unique and very helpful insights as an artist, producer and businesswoman in the music industry.”

Stu Bergen said: “I am really looking forward to working with Deezer leadership and management, supporting our ambition to connect artists and fans in meaningful and engaging ways, as the company continues to generate profitable growth and expansion globally. It’s been an exciting opportunity, and after more than 30 years in the music industry, I hope to contribute useful insights and experiences, working with Deezer to take the business to the next level. “

Jeronimo Folgueira, Deezer CEO, said: “With Stu joining, we will add three decades of music industry experience to Deezer’s board, including expertise in advertising and marketing, which will certainly help as we take our next ambitious steps in an increasingly competitive music scene. streaming market.”

All EUR-USD conversions in this report have been performed at the average annual rates provided by the IRS.Global Music Business