Deezer Gets New Financing,
As Business Analysis Site Questions Current Streaming Music Model
Deezer, an Internet
music streaming service similar to Spotify, just raised $130 million dollars
from Access Industries and other music-media companies in an effort to buy out
a few Deezer shareholders and bring in fresh faces with innovative ideas. Deezer,
which has yet to penetrate the American market, looks towards expanding and
taking asvantage of the untouched international countries. However, with a
similar business model to Spotify, Deezer is already speculative of how long
can the subscription service model for the recent, innovative music streaming
service websites last: “once the venture capital
that is propping up this seemingly booming market runs out, will there be a
sustainable business without drastically increasing prices to the consumer, or
renegotiating royalty terms with the rights owners” (CMU). For this reason,
Deezer is hoping their new employees will bring a better, sustainable model
that will have a lasting effect on the music industry.
With
music streaming services having flat, monthly rates, a future change in their
pricing to make up for lost revenue from uninterested users leaving the
websites would create a similar downturn that physical CDs went through in the
late 2000s. In light of this, Deezers wants to reassure music streaming lovers
and future customers that they do not plan on making consumers foot this cost
despite the ever-changing music market and consumer tastes. Deezer wants to
reinvent the Spotify business model and turn it into a reliable stream of
revenue for streaming companies and music industry sectors alike.
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