French music streaming platform Deezer pledged to turn a profit by 2025 as its losses narrowed by 8.8 million euros ($8.5 million) in the first half of the year.
Those are the company’s half-year results, for the six-month period ending June 30, 2022, published on Thursday (September 22).
In the first half of the year, the company lost 300,000 subscribers because it failed to hold and attract users outside of the domestic market. This loss was also due to the company’s withdrawal from the Russian market at the end of the first quarter.
Despite the drop in user numbers, Deezer still made €219.4 million in revenue in the first half of the year, up 12.1% from a year ago. It attributes the growth to the price increases it deployed, as well as a change in the company’s geographic location.
Although the company’s losses continued to grow, its net loss in the first half of the year fell by 8.8 million euros to 51.9 million euros from 60.7 million euros in the same period last year.
Rival Spotify, in its first half results published on September 22, said its operating loss was 52.6 million euros, down from 61.1 million euros in the first half of last year. . In the most recent period, the company recorded non-recurring expenses related to the public listing.
Deezer debut on Euronext in July, received a lukewarm response from investors.
However, Deezer remains optimistic about the potential for profitability over the next three years as it doubles down on its new B2C/B2B strategy to further focus on large attractive markets through its so-called ‘first partner’. go to- market model’.
“Deezer’s new strategy is delivering improved profitability and double-digit growth. This was made possible thanks to strong growth in subscribers in France, increased ARPU in international markets driven by our new focus and cost discipline. “
Jeronimo Folgueira, Deezer
The company recently revealed its plans extend in Germany by partnering with local broadcaster RTL, the same path they took when they launched in Brazil in 2013 through partnerships with TIM, Globo and Mercado Libre.
“Deezer’s new strategy is delivering improved profitability and double-digit growth. This was made possible thanks to strong subscriber growth in France, increased ARPU in international markets driven by our new focus and cost discipline,” said CEO Deezer Jeronimo Folgueira said.
Folgueira says that by focusing on attractive large markets and entering new markets with a partnership-led model, “we believe we can capture a fair share of the streaming market.” is booming and continues to improve its profitability to break even by 2025 ″.
Deezer seeks to focus on product innovation and brand differentiation in order to attract more users globally.
France remains Deezer’s stronghold. The company’s revenue in this market grew 11.1% year-on-year to €132.4 million, fueled by a 10.7% jump in B2C subscribers. In the rest of the world, Deezer’s revenue grew 13.6% in the first half of the year to 87 million euros, which the company attributed to dynamic B2B sales, thanks to existing partnerships and partnerships. More recent B2B transactions in Brazil and Europe.
“We believe we can capture a fair share of the booming streaming market and continue to improve our margins to break even by 2025.”
Jeronimo Folgueira, Deezer
Deezer ended the first half of 2022 with 9.4 million global subscribers, down 2.9% year-on-year.
It comes as France’s surge in subscriptions offsets a drop in its subscriber base in the rest of the world.
“In the rest of the world, Deezer’s new strategy has resulted in a significant reduction in unprofitable spending in non-core long-tail markets, thus impacting attractiveness,” the company said. new B2C subscribers”.
Going forward, Deezer is expected to record a 14% increase in revenue for 2022 to €455 million as it anticipates revenue will soar in the second half of the year due to the growing RTL partnership and the increased impact of the acquisition. Price increases are made throughout the year. .
The company did not provide guidance on net profit or loss for the full year.Worldwide music business