Deezer is looking to muscle in on the Mexican streaming market via an alliance with TV giant TV Azteca.
Under the new, exclusive partnership, TV Azteca – one of the largest producers of Spanish langauge programming in the world and operator of four TV networks in the country – will join with other companies owned by corporate conglomerate Grupo Salinas to promote Deezer across their businesses.
The multi-year investment is worth $40 million (£32m) and values Deezer at $1.4 billion (£1.12bn), a 30% increase from Deezer’s last funding round in 2018. Deezer refused to reveal financial details, but that valuation suggests Grupo Salinas will now have a minority stake in Deezer of around 2.85%. Deezer is controlled by Warner Music Group owner Access Industries.
Deezer plans to use the investment to target success in Mexico, following its rapid progress in Brazil, where Deezer says it is the No.2 streaming service. According to the IFPI, Mexico was the 16th largest music market in the world in 2019, with its recorded music revenues growing by 17.1% to $181m (£145m). The Mexican music streaming market is predicted to be worth $700m (£561m) by 2024.
Deezer is often regarded as a minor player in the ultra-competitive streaming sector, but claims 16m global monthly active users, and is a major force in some global markets. According to some unconfirmed reports, it recently lost its market-leading status in France, where Deezer is headquartered, to Spotify.
Deezer pulled out of an IPO in 2015, although the possibility resurfaced after Spotify's successful float. Warner Music Group recently went public on the Nasdaq.
“Mexico is one of the fastest growing music markets in the world,” said Deezer CEO Hans-Holger Albrecht. “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.”
“We already have the team in place to make sure that Mexican music fans find the content they love,” he added. “Thanks to TV Azteca we will have an unprecedented reach in Mexico, which means we can make even more content for Mexican music fans. We are also excited to start implementing our proven retail strategy by working closely with Grupo Elektra’s stores across the nation.”
“We are pleased to form this alliance with a world-class company like Deezer,” said Moshe Arel, director of innovation of Grupo Salinas and CEO of Azteca Play in TV Azteca. “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.”
As part of the deal, the company will take over the popular television show Mugo Live and will rename it Deezer Live. The show will continue to air weekly on the national channel Azteca Uno, where it generates two million viewers per episode. Deezer will focus on introducing new and emerging local talent, with regular live performances from Mexican artists. Deezer is also acquiring the social app Mugo, founded by Ori Segal, Shay Goldberg and Roman Slutsky.
Music fans in Mexico will discover Deezer through creative campaigns on TV Azteca. Users will be able to sign up for the music streaming service directly in Totalplay. Deezer will also partner with Grupo Elektra to offer Mexican audio consumers digital music to complement their purchases throughout the extensive storefront network across the country.
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