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Deezer has hailed a “milestone” in its development after France’s answer to Spotify broke even on a cash flow basis for the first time since it was founded almost two decades ago.
In results reported on Tuesday evening, the Paris-based music streaming platform said its revenues had risen 12 per cent last year to €542mn.
While it made an adjusted loss before interest, tax, depreciation and amortisation of €4mn in 2024, an improvement from a €29mn loss in 2023, Deezer said it had broken even for the first time in the second half of the year. Free cash flow for the year was €7mn, compared with €44mn last year, although it made a pre-tax loss of €27mn.
“For the first time in history, we are positive for cash flow, a massive milestone that changes a lot how we think about the future,” chief executive Alexis Lanternier told the Financial Times.
He said the move would enable the group to “invest in research and in developing the right solution to build a long-term path for growth and profitability”.
The French tech company, which was founded in 2007, has faced stiff competition from larger rivals such as Swedish streaming group Spotify, Apple Music and Alphabet-owned YouTube.
Deezer had about 10mn paying subscribers at the end of last year, against Spotify’s 263mn.
The company’s largest investor is Sir Leonard Blavatnik’s Access Industries, with French telecoms group Orange and the billionaire Pinault family also among its shareholders. It was one of France’s first privately owned €1bn “unicorns”, but its share price has plummeted since listing in 2022.
Deezer now wants to launch new technology to enable more personalised experiences in its app, and offer direct, exclusive interactions between fans and artists.
Deezer has already agreed with labels such as Universal Music Group that artists who generate at least 1,000 listens a month will receive double the royalty rates of those who do not.
Lanternier said Deezer had moved towards this “artist-centric” model — where artists who have a higher number of streams in effect get paid more — but the next shift would be “user-centric . . . meaning always pushing to make sure that your subscription goes to the artist that you are listening to”.
Deezer has developed an artificial intelligence detection tool on its platform, which it hopes will protect earnings for real artists by excluding songs illegally trained on copyrighted songs. Fraudulent streams are identified and removed from algorithms that promote tracks so that these AI-generated songs do not receive royalties.
Deezer has found that about a 10th of the roughly 700,000 new songs that are put on to its platform every week are entirely generated by AI. “So that’s clearly something that we need to fight against,” Lanternier said.
Deezer has focused more on driving growth in its core markets such as France, Brazil, Germany and the UK, where the return on investment in areas such as marketing is higher, and cutting back in other areas.
The group has also worked more closely with music labels on deals to help drive value for their artists, while cutting costs and increasing the price of subscriptions, which now start at €11.99.
Deezer is also offering its streaming technology as a “white label” platform for other consumer brands to launch music services.
“We’re growing 12 per cent over the year, which is quite remarkable in an environment that is not as exciting as it used to be for the digital world,” said Lanternier. “It’s a very good year for us to think hard about what is the long-term path, because we now have a much more solid financial situation that enables us to be in control of our destiny.”
