Spotify’s rival, Deezer eyes Nigeria, SSA music streaming market


As Apple and Spotify crowd-out the likes of Deezer in music streaming market across Europe and America, the smart ones among them are looking up to new markets to break grounds.

In a statement monitored on Reuters today, Deezer, a music streaming platform looking to get an elbow room in untapped countries such as Nigeria, said through its Chief Executive Hans-Holger Albrecht that the company would target selected markets in Latin America, Asia and Africa where Spotify was not already predominant. They include Guatemala, Bolivia, Paraguay, Colombia, Nigeria, Senegal and South Africa.

“I strongly believe in the localisation of content,” he told Reuters. “While Spotify is mainly playlist-focused, we are betting on local differentiation, and this has helped us become number one in gospel in Brazil.”

But finding a path to profit represents a formidable task for the loss-making company.

It has a similar “freemium” to market leader Spotify, whereby it attracts users by offering advert-supported free access and charges a monthly fee of about $10 for the full service. However it has only 12 million active users – about 9 million paying – compared with Spotify’s 60 million paying subscribers, and brings in just a tenth of the Swedish firm’s $3 billion annual revenue.

Deezer, controlled by billionaire investor Len Blavatnik, is nonetheless sinking tens of millions of euros into this local music drive. Its strategy is based on a bet that music streaming will continue to grow rapidly to eventually eclipse all other forms of music listening.

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The paid streaming market is expected to grow 16 percent to $28 billion by 2030 in terms of annual revenue, according to Goldman Sachs

“Streaming is a very young market, with just about 10 percent penetration globally, so there is a lot of potential still,” said Albrecht.

Spotify is also loss-making but is nevertheless valued at $13 billion because of this market potential, as well as investor expectations that its fast-growing user base will allow it to negotiate increasingly lower royalty payments to labels.

The company, a millennial megabrand, is eying a stock market listing this year or next, and Albrecht said Deezer could also consider going public should that flotation prove successful.

What about Spinlet and other ‘weary’ startups

Nigeria and indeed most sub-Saharan countries are not new to music streaming startups. One of the boldest company to venture into the field was Spinlet. The company was offering mobile and online streaming via apps and web for a monthly fee. After the model became impaired, Spinlet has since pivoted to buttressing downloads at affordable rates instead of streaming.

Later on, Iroko Partners started, a wholly-streaming platform. With more free downloads popping up, Itoking has since shuttered.


It is left to be seen the kind of strategy Deezer will leverage in African markets where subscription models for streaming services are gathering dust.