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Muve Out, Deezer Is Moving In

by User Not Found | 1月 12, 2015

I have long expected to see Deezer expanding into the US market, but was a bit disappointed when it finally did in September 2014, with the quietness of its entry.  How could you enter an already rather crowded market, with incumbents ranging from local heavy weights in Pandora and Slacker to global competitors in Spotify and Rdio, without a “Big Bang?”

After a few months’ silence, however, Deezer did deliver a “BANG” by announcing its acquisition of Muve Music and replacing the latter with an exclusive deal with Cricket, the prepaid subsidiary of AT&T.  After the transition becomes effective in February 2015, Muve Music users will be able to migrate the songs they acquired to the Deezer app, and enjoy a promotional period after which they will be billed $6 per month to continue with the service, unless they cancel the service at the end of the promotional period.

With a second reading though, the deal may not be as surprising as it first looked. 

·         Cricket, who owned Muve Music, has stopped offering new customers with the all-inclusive flat rate of $45 that included unlimited music download, shortly after the acquisition by AT&T went through the regulators in March 2014;

·         AT&T’s partnership with Beats Music came to a silent end sometime in October 2014, a few months after the latter was acquired by Apple, when it stopped offering the stream services to new customers or customers buying new phones while Beats Music also took down the option to subscribe through AT&T;

·         AT&T’s competitors have tied deals with other music streaming services, Verizon Wireless with Slacker, Sprint with Spotify, and T-Mobile with Rhapsody. So AT&T must find a new partner to fill the gap.  And with the industry moving from downloading to streaming, this should be a market leader in offering streaming.

So, we see the deal as positive to multiple parties:

·         For AT&T, it gets a partner that has operational experience in 180 countries, filling a hole in its service offerings to compare with its competition.  While Muve Muisc was for Android devices only, Deezer is cross-platform, able to serve Cricket’s customers using devices on other operating system.  It even supports connected home audio devices like Sonos;

·         For Deezer, the deal gives it a strong foothold in the US market, and more than 2M potential new customers.  Despite it not being a direct conversion, I feel a large number of the current Muve customers would migrate to Deezer, as the experience of streaming is preferred by more and more consumers to downloading;  and

·         For for Cricket customers, they have a cheaper solution ($35 monthly tariff on calls and text messages and data and $6 Deezer vs. $45 inclusive on Muve), a larger catalogue (of 35 million songs) including a large catalogue of Latino music through Deezer’s investment in Latin America, , an offering that would serve the Cricket customer demographics well.

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