These days, almost every human need can be met with the touch of a finger. Be it shopping, buying tickets to a concert, booking a parking spot, or seeing a doctor, consumers around the world can all book it all on their phones. Listening to music has been this way for over a decade now, and over the years several brands have jumped into the world of online music streaming, giving consumers the freedom to listen to their favorite music directly on the phones. The category is growing at a rapid speed and generating a lot of revenue along the way.
Deezer, a leading online music streaming player in Europe, has a catalogue of over 53 million tracks and recently added the Middle East and North Africa to its global expansion.
At SCALE18, the conference for growth marketing innovators, powered by DCMN, attendees will have a chance to hear from leaders in this fast-growing space during a session titled Glocal Hero: How Deezer takes a personalised approach to reach music fans around the world.
Featured speaker, Ralph Pighin, Vice President of Central and Eastern Europe at Deezer, shares some of his insights on the topic of online music streaming industry below. Don’t miss his session at SCALE18 this Thursday, October 25.
Deezer has emerged as a global brand. What was your overall strategy in scaling across global markets to achieve your target?
Deezer took an early decision to make its service available in many countries simultaneously as opposed to a market-by-market approach. This enabled us to detect developments in local music consumption very early and build on this basis in our market strategy.
When Deezer decided to expand beyond its home market of France, what were the challenges you faced in other CEE markets?
Deezer is the leading audio streaming service in France. Expanding beyond our home market meant taking on the role as a challenger in many of the new territories and also learning about and adapting to local consumer needs. Central and Eastern Europe features a wide range of development, not only when it comes to streaming penetration, but also purchasing power, piracy, and currency fluctuation. Each of them pose their individual challenges when growing the business.
How important is localised marketing to achieving scale in a particular location?
In a business that is all about global scale, localised marketing as well as content are very important. The localised approach we take is very market specific. We adapt to the local context in terms of consumer behaviour and attitudes, such as focusing on developing the right subscription models within each market. This context determines everything from your channel mix, up to individual wordings when talking about the service and its value proposition. In terms of content, we also work closely with local artists for profile development, play listing and local campaigns.
What is the annual growth rate of the online music streaming industry in Europe, and what do you believe is fuelling this?
According to IFPI 2018 streaming revenues grew by 41.1% (to $6.6 billion) globally to become the largest revenue source, driven by 176 million users of paid subscription accounts. Streaming revenue now accounts for 38.4% of the total global market for recorded music.
The growth is based on a combination of available technology, namely cloud based streaming solutions that enable access to your music from anywhere, anytime with no noticeable delay and at the same time the increase in willingness by consumers to no longer own media, but exchange ownership for choice and access.
What are the challenges faced in the extremely competitive online music streaming industry today in Europe?
Music streaming is a competitive landscape. Deezer is an early pioneer in music streaming and a natural challenger to the three biggest global streaming players. In 2007, the year Deezer was founded, the IFPI reported that there were nearly 500 online music services in over 40 countries. Today, many of these services do not exist anymore. With the emergence of voice activated services, big technology companies become gatekeepers for consumers to access our service. The equal access to their technology and default settings becomes a challenge when those companies are at the same time providing similar services like Deezer.
There are a lot of players in this industry, what do you think is the best strategy to stay ahead of the competition?
We have to be innovative, agile and challenge the status quo to succeed. There are four main capabilities that we invest in: Technologically driven innovation, personalisation, localisation and original content.
As a music and technology company we are constantly innovating and adapting to the changing behaviour of our users to create the most personalised experience. We will also continue to focus on localised content and activities with local artists that our users care about, including playlists, social activation, and exclusive performances.
In addition, we are focused on creating our own content such as our Deezer Originals podcasts. This year, for example, we already launched two brand new podcasts in Germany and we are now in the fourth season of one of our most popular podcasts, “Das keine Fernsehballett” which provides commentary on TV and pop culture.
What role does AI play in the music streaming industry and how it is changing the face of the industry?
AI, big data and machine learning are especially important in regard to personalisation, recommendation and music discovery. At Deezer we have a unique feature called Flow. It is like a “personal soundtrack” that uses smart data and a proprietary algorithm to play your favourite songs that you already know and also helps you discover new ones.
Currently, we are working on an AI system that can detect a song’s musical mood. In the future, this will help to not only suggest music based on a user’s taste, but also something more subtle and contextual like mood and emotions. And with smartwatches and smart speakers on the rise I’m sure we will see many further opportunities for AI to change the way we consume and interact with audio content in the future.
With the world quickly shifting online, are music labels left with any opportunity other than also shifting online and partnering with music streaming companies?
The music industry is constantly changing. Just within the past century, we have seen a remarkable acceleration of innovation in music recording and consumption from the invention of the phonograph to the rise of music streaming services. In the wake of this digitalisation, the role of all players in the music industry – whether its labels, artists or streaming services will continue to evolve and grow. For example, we work closely with labels and artists to promote their new songs, playlisting and even launched a global program called, Deezer NEXT where we work directly with labels, artists and management to promote up-and coming talent locally and around the world.
SCALE18 kicks off in Berlin on October 25. Book your tickets here.