The major labels own more than 15% of loss-making Deezer, which turned over €142m last year – miles behind Spotify’s 2014 revenue haul of €1.08bn.
But none of that is stopping the French company from beating Daniel Ek to the stock market.
According to the FT, Deezer’s revenues are expected to grow by just over a third this year, which would put them at around €190m.
Despite being a relative minnow to Spotify and the inevitable loss of streaming market share to new player Apple Music, Deezer has applied to float on the Paris stock exchange.
CEO Hans Holger-Albrecht (pictured) said that the decision would “give us more flexibility going forward and more access to financial markets”.
Paris-based Deezer is currently loss-making, but Holger-Albrecht said that the firm expected annual revenue to exceed €750m by 2018, and for the company to break even on a monthly basis.
“[AN ipo] will give us more flexibility going forward and more access to financial markets.”
Hans Holger-albrecht, Deezer
The firm has chosen to float in Paris because it remains its biggest revenue-generating market, said the exec.
A long-standing telcoms deal with Orange in France has been a key factor in Deezer becoming market leader in the territory.
Indeed, the FT reveals that Orange owns a stake in Deezer, as do Universal Music Group (5.9%), Sony (3.8%), Warner (3.8%) and EMI – owned by Warner in France – (1.9%).
In total, that means the majors own 15.4% of Deezer. Their combined stake in Spotify is believed to be marginally higher.
With 16m total active users vs. Spotify’s 75m, Deezer trails behind its rivals in most territories around the world.
Deezer says it has more than 6m paying subscribers worldwide, compared to Spotify’s 20m.
In 2012, Len Blavatnik’s Access Industries joined with Idinvest Partners to invest more than €100m in Deezer.
In January, Deezer used that money to acquire the assets of Muve Music in the US.
Although Muve was believed to carry 2.5m paying users, Deezer is understood to have brought over only a small portion of that figure to its service – the key factor in paid-for music subscriptions in the US near-flatlining in the first half of 2015.Music Business Worldwide