Deezer is now a $1.4bn company – with a big opportunity in Mexico

MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.

It’s a big day for Deezer.

The Spotify rival, majority owned by Len Blavatnik‘s Access Industries, has just struck a major deal which it believes will “shake up audio streaming in Mexico” – and could help it establish its goal to become the No.2 streaming company in multiple regions across LATAM.

The deal sees one of the biggest producers of Spanish language TV in the world, TV Azteca – via its parent, Grupo Salinas – acquire a minority stake in Deezer.

In exchange, Deezer says it will receive the equivalent of US $40m in investment, in the form of a multi-pronged media and retail partnership with TV Azteca and Grupo Salinas over several years.

Perhaps more importantly, Deezer says the deal increases its valuation to comfortably beyond a billion dollars.

Benefits to Deezer will include sustained campaigns on TV Azteca “demonstrating that Deezer is the one tap music experience that effortlessly delivers the music for the moment”.

Meanwhile, Deezer will take over the popular weekly television show Mugo Live on national channel Azteca Uno – which draws an audience of two million viewers per episode – renaming it Deezer Live.

Deezer has also acquired the Mugo social music app, which it is shutting down, while offering existing users a three-month free trial of its own service.

Additional Grupo Salinas companies will help Deezer further increase its presence in the Mexican market.

Deezer will be promoted as a service to audio device consumers in electronics chain Grupo Elektra, a retailer which counts over 7,000 points of contact in Mexico alone.

Plus, Deezer has struck a partnership with local internet service provider Totalplay, with customers able to sign up for the music streaming service directly.

“We see huge growth potential in countries like Mexico, Colombia and Argentina and are investing in marketing and subscriber growth. Our experience and number two position in Brazil will help us become the main challenger in the region.”

Hans-Holger Albrecht, Deezer (pictured)

Hans-Holger Albrecht, CEO of Deezer, said: “Mexico is one of the fastest growing music markets in the world. We are excited to bring Grupo Salinas on board as a strategic partner and welcome them as a new investor in Deezer.

“We see huge growth potential in countries like Mexico, Colombia and Argentina and are investing in marketing and subscriber growth. Our experience and number two position in Brazil will help us become the main challenger in the region.”

Albrecht claims that the Grupo Salinas deal will bring Deezer “unprecedented reach” in Mexico.

Laurence Miall – d’Août, Deezer’s Chief Commercial Officer, told MBW: “The deal is a mix of media exposure, B2B partnerships, a music TV show and access to TV Azteca’s production capabilities. Deezer will benefit from $40m of media exposure, thanks to extensive advertising on TV Azteca’s channels and their media partners.”

Miall – d’Août added: “When we combine this with distribution capacity from Grupo Elektra’s stores, bundling opportunities with TotalPlay and the launch of the rebranded hour long Deezer Live TV show, that makes for an amazing growth platform for us in Mexico. Our goal is to take a clear No.2 position in Mexico in the coming years.”

According to the IFPI, Mexico generated $180.8m for the global recorded music industry last year, up 17.1% on 2018. Some $155.9m of that money came from streaming.

MBW’s Stat Of The Week: Deezer is now worth $1.4bn

Deezer says the TV Azteca / Grupo Salinas agreement values its company at €1.3 billion (US $1.4 billion).

A $1.4bn valuation in turn suggests that Grupo Salinas, via its $40m-worth of investment, now owns somewhere in the region of 2.9% in Deezer.

That $1.4bn valuation is up by around 30% on the valuation Deezer achieved following its last funding round in 2018. At that point, Deezer took on a €160m in investment from existing backers such as Access Industries and Orange, in addition to the Kingdom Holding Company and Rotana.

As a result, Deezer locked in the exclusive streaming contract to distribute music from Rotana Records, which claims to be the biggest record company in the Middle East.

Both TV Azteca and Grupo Elektra trade on the Mexican Stock Exchange. Other Grupo Elektra companies include Banco Azteca, Purpose Financial, Afore Azteca, Seguros Azteca, Punto Casa de Bolsa, Totalplay and Totalplay Empresarial.

Moshe Arel, Director of Innovation of Grupo Salinas and CEO of Azteca Play in TV Azteca, said: “We are pleased to form this alliance with a world-class company like Deezer. This will be one of the most innovative and disruptive partnerships in the market.

“It is an exciting time to be proactive and to participate in the fast-growing music streaming industry while we connect music fans in Mexico. We believe this partnership will collaborate with their expansion strategies in the region while strengthening TV Azteca´s content offer.”

Cinq Music’s repertoire has won Grammy awards, dozens of Gold and Platinum RIAA certifications, and numerous No.1 chart positions on a variety of Billboard charts. Its repertoire includes heavyweights such as Bad Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and hundreds more.Music Business Worldwide

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