Music streamer Deezer hopes better audio will attract U.S. users
The 7-year-old music streaming service Deezer has amassed 16 million users, including 5 million paying subscribers, from 180 countries. Though it’s the second-biggest such subscription service in the world, U.S. music listeners have never had access.
That’s about to change, but the long-anticipated U.S. launch of one of Spotify’s biggest rivals comes with a big asterisk.
On Wednesday, the Paris-based company said it has teamed with the wireless speaker firm Sonos for a version of Deezer that streams so-called hi-resolution audio, hoping to introduce better sounding tracks to the music streaming world.
While companies such as Spotify and Apple’s Beats Music have tried to gain market share by going after general music fans, Deezer is looking for more specific customers -- those who are tired of poor audio quality from MP3s and Internet services.
It’s an unusual roll-out tactic for a company looking to enter such a large music market where there already multiple popular digital music outlets.
The new service, dubbed “Deezer Elite,” is the first offering from the company for U.S. users. It will become available through Sonos on Sept. 15 and will begin to spread globally.
Deezer’s Chief Executive of North America, Tyler Goldman, said that people who want better audio tend to spend more on music and hardware, but they are less likely to subscribe to streaming services.
“They like the idea of creating playlists to stream on demand , but they don’t want to sacrifice quality,” Goldman said.
The company said its audio bit rate is five times better than other streamers, and that this is a noticeable difference that will attract music buffs.
The question remains, how many people will pay for the improvement in an age when consumers have grown used to listening on iPhones and iPods through tiny earbuds.
Without promotional pricing, Deezer Elite will cost $19.99 a month for Sonos users.
Last year, a study by the Consumer Electronics Assn. said 40% of people with “a moderate interest in audio” indicated they might pay more for high-quality audio electronics devices.
Deezer is later expected to introduce other services that cater to the broader public.
The company isn’t the first to bet on higher-quality digital sound.
Rock musician Neil Young earlier this year raised more than $6.2 million on Kickstarter for Pono Music, an answer to the iPod for high-resolution audio. In addition, the Scandinavian Spotify competitor WiMP made its high fidelity version available last year.
Streaming music is an increasingly crowded industry in the U.S. Spotify, Rdio, iTunes Radio and Beats Music are among the services already doing business in the United States, and YouTube is expected to launch a subscription music offering soon.
Streaming services are growing as sales of digital tracks continue to decline.
According to a report by the International Federation of the Phonographic Industry, revenue from subscription music services increased about 51% in 2013 to more than $1 billion worldwide as people have shifted away from illegal downloads. The recording industry group said there were 28 million people subscribing to such services last year.
The company last raised funding two years ago when Len Blavatnik’s Access Industries led a $130-million investment. Blavatnik also owns Warner Music Group, the world’s third-largest record label.
Follow Ryan Faughnder on Twitter @rfaughnder for more entertainment business coverage.
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