Deezer raises prices for SECOND time in 12 months: Individual subscription now €11.99 per month in France, Spain, as Family Plan balloons to £19.99 per month in UK

Yesterday (September 20), MBW predicted that new price rises in the world of music streaming would be with us by the end of 2023. It took less than 24 hours for that forecast to come true.

Deezer, the Paris-headquartered rival to the likes of Spotify and Apple Music, has today (September 21) quietly announced that its prices are increasing yet again.

In a short statement posted on its website, Deezer wrote: “From September 21st, 2023, prices are adjusted for all new premium and/or family subscriptions in France, UK, Spain, Italy and the Netherlands. For our current premium and family subscribers in these countries, the changes in pricing will become effective at the earliest on the first billing period after October 24th, 2023.”

MBW has confirmed what that means in reality:

• In the EU territories mentioned – France, Spain, Italy, and the Netherlands – Deezer’s individual Premium price is rising from EUR €10.99 to €11.99 per month from today. Deezer’s individual Premium price will remain unchanged in the UK, where it’s already GBP £11.99 per month;
• In all territories mentioned – including the UK, plus the select European markets– the price of Deezer’s Family Plan is also rising, up to €19.99/£19.99 per month. That represents a €2/£2 jump in monthly cost for consumers.

To soften the blow of these price rises, Deezer is offering a two-month-long free trial period (for both individual and family tariffs) to new subscribers in these markets.

(Deezer’s pricing in the US remains unchanged at USD $10.99 per month for an individual account, and $17.99 per month for a Family Plan account.)

This is the second time in the past 12 months that Deezer has upped its prices in key territories:

• Deezer increased its standard monthly subscription price in the United States from $9.99 to $10.99 in September/October last year.;
• That came after a price rise across various European territories in early 2022, with the monthly price of an individual plan increasing from €9.99 to €10.99 in markets like France and Germany;
• Deezer actually took the plunge on a more aggressive price rise in the UK as far back as October 2021, when it raised its Premium price from GBP £9.99 per month to £11.99 per month.

News of the latest price hike at Deezer today comes one month after the company’s CEO, Jeronimo Folgueira, hinted that further price rises were on the way from the company.

“Deezer was the first player to raise prices… since then, all other global platforms have followed our move, which gives us the opportunity to review pricing again in the near future.”

Jeronimo Folgueira, Deezer, speaking in August 2023

“Deezer was the first player to raise prices in early 2022, with pretty much no impact on churn, which has clearly demonstrated that music is highly undervalued and that platforms like us have more pricing power than initially anticipated,” Folgueira told investors in August.

“Since then, all other global platforms have followed our move, which gives us the opportunity to review pricing again in the near future.”

That ‘near future’ is now here, and will raise questions of whether other key streamers – including Spotify, Apple Music, and Amazon Music – will soon follow suit and raise their own prices again.

Apple Music hiked its individual Premium tier price by 10% to $10.99 in the US last October; Amazon Music followed suit in January this year; Spotify then did the same in July, moving its US price up by 10% while also hiking its prices in 52 other markets.

Following that July price rise, Spotify CFO, Paul Vogel, said at a Goldman Sachs event in September: “[We] actually raised prices in a number of markets that pre-dates anyone else raising prices; we had raised prices like 50 times [if counting territories individually] even before that [July announcement].”

“When we have raised prices in the past, we see very little impact on gross intake and very little changes in churn. We feel confident that as we do raise prices [again], and we’ve done it recently, we’ll continue to have similar types of dynamics at play.”

Paul Vogel, Spotify, speaking earlier this month

Vogel added: “When we have raised prices in the past, we see very little impact on gross intake and very little changes in churn.

“So we feel confident that as we do raise prices, and we’ve done it recently, we’ll continue to have similar types of dynamics at play [i.e. little change in churn] in the markets where prices have increased.”

The music industry, then, appears to have started following the forecast of Bill Ackman’s Pershing Square Holdings, which predicted in March this year that – having finally breached the $9.99 monthly price barrier – additional, more regular price rises from music streaming services are now as good as inevitable.

“We believe that breaking the $10 barrier is a watershed moment, as other platforms will likely follow suit, and regular price increases will become the norm in the audio streaming industry as they are in the video streaming industry.”

Pershing Square Holdings, March 2023

Pershing Square told its investors: “We believe that breaking the $10 barrier is a watershed moment, as other platforms will likely follow suit, and regular price increases will become the norm in the audio streaming industry as they are in the video streaming industry.”

Other influential voices in the music biz agree with Ackman’s message.

Robert Kyncl, Warner Music Group CEO, said on an earnings call with investors last month: “We see these initial [music streaming] price increases as an encouraging start. There is no evidence that the services are experiencing elevated levels of churn.

“We believe the market will bear further price increases in the future, and we’re expecting that they’ll arrive on a more regular cadence than in the past.”

Deezer’s latest price rise comes at a time when the French streaming service seems keener than ever to lock arms with large music rightsholders to improve their fortunes on its platform.

Earlier this month, Deezer co-announced a new payment model on its service – ‘artist-centric’ royalties – in tandem with Universal Music Group.

‘Artist-centric’ will, amongst other things, see artists with more than 1,000 monthly listens on Deezer – from over 500 monthly listeners – given a ‘double boost’ to their royalty weighting on the service. The model launches for UMG artists in France next month (October).

Universal Music Group is understood to be a minority shareholder in Deezer (via a ‘PIPE’ investment made last year), and licenses the largest recorded music catalog (by value) to the platform of any one company.

The biggest individual shareholder in Deezer is Access Industries – majority-parent of Warner Music Group. Access continues to own a ~37% stake in the music streaming platform, despite Deezer’s SPAC IPO last year.

Warner Music Group – via WEA International Inc – owns a further 3% stake in Deezer.

Despite its recent headline-grabbing industry announcements (today’s included), it’s worth putting into context Deezer’s relatively minuscule market power.

According to the firm’s H1 2023 results, Deezer – now a premium-only service, albeit with a free trial offer – counted 9.3 million paying subscribers globally at the close of June this year.

That figure was down by 100,000 subscribers versus the equivalent figure from the same date in 2022 (9.4m).

Deezer’s 9.3 million subscriber base at the close of June 2023 was around a 24th of the size of Spotify’s paying customer base at the same date (220 million).

Spotify’s total global monthly active audience at the end of June this year (including ‘ad-supported’ users) was 551 million people – about 59 times bigger than Deezer’s total audience.

In the first six months of 2022, Deezer posted EUR €233.2 million in revenues – up 6.5% YoY. at constant currency.

However, the company also posted a EUR €13.1 million adjusted EBITDA loss for the period.

Deezer’s strongest territory by some margin is France, where it counted 3.6 million ‘direct’ subscribers at the end of H1 2023 this year.

That 3.6 million figure made up over half of Deezer’s total ‘direct’ subscribers globally (where ‘direct’ refers to those who have signed up to Deezer directly, rather than via a third-party partner).Music Business Worldwide