Move comes as industry increases fees and era of cheap entertainment comes to an end
Deezer is set to raise its monthly subscription price by €1, according to two people familiar with the matter, as music streamers turn the screw on consumers and look to boost profits for the industry.
After a decade of prices staying mostly fixed at $10 or €10 a month, music streaming services have begun to increase their fees — a move that is cheered by the major music labels and their investors who argue that their products are undervalued.
The French streaming service Deezer is a smaller player in the music streaming market, but it was the first to begin raising prices in early 2022, making it something of a bellwether for the industry. Apple followed suit in October 2022, then YouTube and Spotify in July this year.
A standard Deezer subscription will soon cost €12 a month, up from €11, across several countries in Europe. Deezer declined to comment.
Bill Ackman, who holds a stake in Universal Music through his Pershing Square hedge fund, said earlier this year that “breaking the $10 barrier” for music services was a “watershed moment”.
Warner Music chief executive Robert Kyncl said in February that music had been chronically “undervalued” compared with its counterparts in streaming television.
“Since 2011, the subscription price of Netflix’s standard service has roughly doubled.In contrast, the price of a music subscription has stayed the same since streaming was introduced over a decade ago”, he told investors on an earnings call.
The global music business has been growing for almost a decade, with US revenue rising to a record $8.4bn for the first half of this year, according to recent figures from the Recording Industry Association of America. However, the streaming boom has been slowing, making price rises a priority for music companies as they try to jump-start growth.
Across the entertainment industry, an era of cheap streaming is coming to an end as rising interest rates and a media stock crash have forced Hollywood studios to focus on profits. The big video streaming services have similarly been raising their fees, with prices for a basket of platforms now rivalling the cost of cable television bundles.
Source: Financial Times
