Deezer investors have had a rough time since the company was listed on the Euronext Paris stock exchange via a SPAC merger last year.
Since its debut on the market at 8.50 euros per share in July 2022, Deezer’s share price has more than fallen 75% (with much of this drop taking place on the first day of trading).
At the close on Wednesday (September 6), Deezer’s stock price was at , according to Euronext data trade at 2.15 euros.
This gives the music streaming service, headquartered in France, a market capitalization of €251.66 milliona quarter the size of 1.05 billion euros rating it had at the time of the SPAC merger.
This drop in Deezer’s value is no doubt due to investor uncertainty about the prospects of an independent music streaming service competing with a much larger competitor (Spotify) and DSPs owned by well-funded US tech companies (Apple Music, YouTube Music) get supported. .
Deezer’s underperforming performance since its IPO hasn’t helped either.
Subscriber growth has stalled, and Deezer’s latest earnings report shows a drop in the total number of subscribers 100,000 year-on-year – To 9.3 million out of 9.4 million – end of June 2023.
A saving grace on those numbers: Deezer continued to see some growth in “direct customers” in its home and largest market, France, with an increase of 300,000 year-on-year.
Only in April, Deezer told investors it expected double-digit sales growth in 2023; Just four months later, in August, Deezer corrected the value downwards 7%-10% sales growth.
At the time of the listing in 2022, Deezer was aiming 1 billion euros in annual sales by 2025.
Sales in the first half of 2023 are just under 233.2 million euros (high 6.5% YoY Adjusted for currency effects, this billion-euro target seems increasingly out of reach.
Deezer last year called itself “the second largest independent music streaming platform in the world”.
But in truth, it’s miles behind Spotify, which recorded 220 million paid subscribers and total 551 million monthly active users (MAUs) as of Q2 2023.
The careful placement of the word “independent” in Deezer’s statement encourages us to overlook everything not-independent (i.e. not “pureplay”) DSPs that have emerged in the years since Deezer’s inception in 2007 – such as Apple Music, Amazon Music, the various services of Tencent Music Entertainment, YouTube Music and most recently TikTok Music.
Accordingly BusinessOfApps: Taking all other music DSPs into account, Deezer was ranked 10th in the world by number of users last year.
The overall lack of subscriber base growth could explain why investors have punished the stock price over the past year.
But who exactly are Deezer’s biggest investors?
MBW looked into this, and it turns out that behind Deezer are some big heavyweights in the music and entertainment industry – as well as a number of France’s most well-known entrepreneurs.
According to financial services company Cofisem, whose data is integrated into the Euronext database, Deezer is the largest single investor access industrieswith a 36.79% Share of the company as of July 31.
For those following the music industry, the Access Industries name might ring a bit: it’s the company controlled by Access Industries Len Blavatnikthrough which the business magnate and philanthropist acquired the Warner Music Group (WMG) in 2011.
As of early 2023, Blavatnik controlled 73.03% of the outstanding WMG shares.
As of the last count, Blavatnik’s net worth is estimated to be $39.6 billionThis makes him the 32nd richest person in the world Bloomberg Billionaires Index.
(Owning Deezer also has another connection to WMG: 3.05% of the streaming company’s shares are owned by WEA Internationala part of WMG formed in 1982 to handle distribution of Warner Bros., Elektra, and Atlantic Records releases outside the United States.)
Second in the Deezer shareholder rankings (see above) is the “Others” category, i.e. various shareholders who buy and sell Deezer shares on the stock exchange. These companies own in common 33.70% of Deezer stock, and among its ranks could very well be a big player in the music business, viz Universal Music Group.
The “Other” category includes investors who were part of a PIPE (private investment in public equity) at the time of Deezer’s IPO, an effort that led to a rebound 135 million euros for Deezer ahead of its IPO.
According to a press release at the time, the PIPE included most of the company’s existing shareholders at the time, including UM And Warner Music Groupand French investment company EuraceoFrench telecommunications and technology entrepreneur Xavier NielsFrance-based investment bank Bpifrance and Franco-Belgian media group media participations.
It is unclear how much Deezer these PIPE investors still own today. The PIPE included Deezer’s output 15 million new shares in the company which were then listed on the Euronext stock exchange, meaning these investors could have sold or kept their shares at any time since the IPO.
The second largest single shareholder of Deezer is Saudi Prince Al Waleed Bin Talal Al Saudwho invests in the company in two different ways: through a subsidiary of Kingdom Holding Companywhose Chairman and CEO is Al Waleed 95% owner, and through Rotana Audio Holding Ltd.a Cayman Islands registered subsidiary of Rotana Group, a Saudi Arabia-based entertainment company wholly owned by Al Waleed.
Kingdom Holdings owns 5.23% of Deezer shares, while Rotana Audio Holding did 5.15%.
Rotana and Kingdom Holding were investors in and invested in Deezer well before the company’s IPO in 2022 a round of financing in 2018 that raised 160 million euros for the company.
At that time, Rotana became the exclusive digital distributor of Deezer’s music and video content in the Middle East and North Africa.
More than a quarter of Deezer’s revenue comes from so-called “partnership subscriptions”, i.e. customers who have signed up via bundle offers with a service provider, usually a telecommunications company.
One of the most important partnerships for Deezer was with a mobile operator OrangeSo it’s hardly surprising that a subsidiary of the France-based company – Orange Participations SA – holds one 7.86% share of Deezer.
Another big investor is François Pinaultthe prominent French billionaire businessman who founded Kering, the luxury goods company known for brands such as Gucci, Yves Saint Laurent and Balenciaga.
Pinault controls through his family holding Groupe Artemis 4.35% of Deezer shares, according to Cofisem.
The Bloomberg Billionaires Index estimates Pinault’s net worth is at $40.8 billionwhich earned him 30th place in the rankings.
Pinault’s son, Francois-Henri Pinault, was notably a co-founder and board member of I2P0, the SPAC that Deezer merged with last year to go public. The younger Pinault has been Chairman and CEO of Kering since 2005.
(It was recently revealed that Francois-Henri Pinault is close to one 7 billion dollars Deal to buy a majority stake in Los Angeles-based talent and sports agency Creative Artists Agency, aka CAA.)
I2P0’s CEO and Chairman was Iris Knobloch, who served for nearly 15 years as President of Operations for WarnerMedia’s French division (not to be confused with Warner Music Group, which spun off from then-Time Warner in 2004).
Knobloch is currently President of the Cannes Film Festival and owns her company SaCh27 SAS 1.88% of Deezer shares.
Another Deezer investor who joined the company through I2P0 is Matthieu Pigasse, the French investment banker and media mogul who was among the investors who first founded I2P0 in 2021. Among other things, Pigasse is a co-owner of Le MondeProbably the most important newspaper in France.
Pigasse’s holding company, Combat Holding SAS, owns 1.88% of Deezer shares per Soficem.
What can we conclude from this?
While many of Deezer’s main shareholders are a tight-knit bunch of prominent French entrepreneurs, the company has also attracted significant money from international investors who have proven they know what they’re doing – Blavatnik and Al Waleed being the two best examples.
From this alone, we can conclude that it would be unwise to leave Deezer out of the game just yet, even though the company is struggling today with a declining share price and a stagnant subscriber base.music business worldwide
https://www.musicbusinessworldwide.com/who-owns-deezer-today/ Who owns Deezer today? – Music business worldwide