Businessmodel of Deezer

Customer Segments

Deezer has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at anyone who wants to stream music.

Value Proposition

Deezer offers five primary value propositions: accessibility, convenience, customization, cost reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. It is available for use on computers (PCs and Macs), mobile phones, tablets, smart watches, television sets, and in cars.

The company offers convenience by making life simpler for customers. The premium version of its platform features no ads or interruptions. Furthermore, users do not have to be connected to the Internet, as they can download songs to their devices. Deezer provides lyrics to songs on the device screen as they are played. Customers can cancel their subscriptions at any time. Lastly, it enables artists with songs on the platform to view analytics on their performance.

The company enables customization through its capabilities. It recommends music to customers based on their listening history. They can create tailored playlists of their favorite songs. It also allows artists who want to make their music available on the platform to create personalized Artist Pages.

The company reduces costs in a variety of ways. It offers new customers a free 30-day trial of its premium version so they can test it out. Afterwards, it only costs $9.99 a month.

The company has established a strong brand due to its success. It has 10 million active users in over 182 countries. It has 100 million playlists and offers 43 million music tracks, including everything from Top 40 singles to music by unsigned artists. Lastly, it has over 50 music editors who curate playlists.

Channels

Deezer’s main channels are its website and mobile app. The company promotes its offerings through its website, social media pages, and advertising.

Customer Relationships

Deezer’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides answers to frequently asked questions.

There is a co-creation element in that musical artists can upload their own music to be included in its inventory. There is also a community element in the form of a forum where customers can interact with each other.

Key Activities

Deezer’s business model entails maintaining and updating its platform for its users. Its platform includes its website and mobile app.

Key Partners

Deezer’s key partners are the media companies it signs agreements with to make its service available on their platforms (e.g., Orange and Facebook) and the technology firms it works with to make its service accessible on their devices (e.g., Samsung, Toshiba, and LG). The company also maintains the following types of partnerships:

• Unsigned Artist Distributors – The company maintains a list of firms it recommends for use by artists not signed to a label who want to put their music on its platform. These firms can oversee the licensing, distribution, and administration of the artists’ music. Specific partners include Tunecore, Record Union, CD Baby, ONErpm, Spinnup, and AWAL.
• Signed Artist Distributors – The company maintains partnerships with firms it recommends for use by artists who are signed to a label but do not yet have their music on its platform. Specific partners include Believe, Finetunes.net, The Orchard, Merlin, INgrooves, and state51 Conspiracy.
• Affiliate Partners – The company works with third parties that promote its offerings on their platforms (websites, mobile apps, etc.) in exchange for cash rewards. ### Key Resources

Deezer’s main resource is its proprietary software platform, which serves over 10 million active users.  It depends on human resources in the form of the engineers that maintain and update its platform and the music editors that curate its playlists.

Lastly, as a startup it has relied heavily on funding from outside parties, raising $217.5 million from seven investors as of January 2016.

Cost Structure

Deezer has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are in the areas of administration and customer support/operations, both fixed costs.

Revenue Streams

Deezer has two revenue streams:

• Subscription Revenues – Revenues generated from fees charged to customers for use of its premium listening service
• Advertising Revenues – Revenues generated from fees charged to advertisers for promoting their offerings to non-premium users on its platform