French music streaming platform Deezer announced last week its new managing director for South America. Marcos Swarowski joins the company with the clear challenge of keeping its expansion in a more crowded landscape. Recently, Brazil has become Deezer’s largest market in active users and the second in revenue. While the company does not disclose exact figures, it revealed that its base of Brazilian paying customers increased 30% last year. With the increasing competition from Spotify, that is remarkable even for a platform that has been in the country for longer – Deezer launched its service in Brazil in 2013, a year earlier than the Swedish app.
In an interview to LABS, Swarowski, whose previous career stints include Expedia and AOL, talked about Deezer’s goals to keep growing, including the investment in popular local genres such as sertanejo (Brazilian country music) and gospel, as well as partnering up with companies from other sectors. “We will continue to invest in new partnerships with companies, artists and the recording industry to strengthen our presence”.
LABS – In Brazil, Deezer was a pioneer platform and helped to popularize audio streaming. How important are partnerships with other industries, such as the ones made with TIM, a telecom company, and Itaú, a bank, for the growth strategy in a market that has become much more competitive?
Swarowski – Although streaming audio already represents a large part of the music industry revenue, and despite being responsible for the market revival, its penetration in Brazil is still very low, between 5% and 10% according to market sources. In more mature markets, it is no more than 30%, therefore it has great growth potential. B2B2C partnerships, such as the ones we have with TIM and more recently with Itaú, provide us with growth not only in the user base but also in brand recognition, and it gives us greater capillarity among different population segments and country regions. In addition, for our partners, we offer a service that adds value to their core business, it is a market distinguisher, and has proved to be an important tool for retaining customers.
How does Deezer attract new users? What is the attractive component of the platform for them?
I believe that the experience and the relationship our users have with Deezer and with the artists they like the most is our biggest distinction. Technology brings new features all the time, but the human and personalized side of Deezer shows the unique DNA of the platform. A result is that, in 2019, Deezer registered a significant growth in Brazil, and the country is now our largest market in active users.
Although we are a global company, we have a very strong local presence. We value national artists and genres. And that makes perfect sense, as Brazilians listen a lot more to Brazilian music.
Besides the curatorship job done by our music-loving editors and the technology of our proprietary algorithms to deliver the best experience for our users, we locally produce exclusive original content in partnership with artists and record labels.
We have a studio in our office, which receives over 100 artists annually. With all this, we are a much more humane and personal platform. To give you a clear example, last week Brazilian country music duo Fernando & Sorocaba performed a live pocket show in a barbecue party and we invited users who most listen to the duo’s tracks. An experience like this goes far beyond a simple app installed on a cell phone.
Streaming platforms do not only compete with each other, they do it with a multitude of other services and products. How do you earn a place in an environment where attention spans seem to be getting shorter?
Music is part of everyone’s daily life. The only essential different component is the way it is consumed, and the advantage that audio streaming brings is that music, podcasts or any other audio program, can be consumed ‘on the go’, on the way to work, in the gym, driving a car on the road or even at home, online or offline, in the palm of your hand or through various devices, while you essentially do other activities at the same time.
What are the unique traits of the South American streaming market that you would like highlight?
There are two very interesting points I like to highlight when talking about the South American market. The first is the Latin American habit of consuming a lot of local music. It is part of the region’s culture to listen and refer to local artists. And this is very positive, because artists of different genres have broken physical barriers to places that have never been reached before by them, be it in Brazilian Funk, Brazilian Country, Reggaeton or Vallenato, among many others. Another point to be highlighted, not only in Latin America, but with even more emphasis here, is the 10-year gap that the industry faced while people consumed music in informal ways, that represented a very long a drop in revenue.
The entire industry – Deezer or any other player, artist, record label, distributor, producer, author, composer, etc – has an important role in educating listeners about the advantages of streaming audio.
Only a small portion of South Americans access streaming services. Is the challenge, therefore, to attract radio listeners?
I think both services are complementary. In Deezer we offer thousands of radio stations from around the world, they are available on the app. The radio will not disappear, it has a fundamental role of broadcasting breaking news, live news. Deezer is an integral audio platform, with music, podcasts, radio stations, audiobooks etc. The difference is in the way and channels through which people consume this content, and in the case of Deezer the user has everything in one place.
Deezer invests in content from music genres that are very popular in Brazil, such as gospel and country. Do fans of regional music styles still need to be won over to digital platforms?
We want to bring streaming to all users with curated, personalized and relevant content for each person and to all regions. About 70% of the Brazilian population has broadband internet access and a smartphone. We will continue to invest heavily in marketing campaigns and partnerships to increase people’s knowledge and access to streaming audio.
Latin American musical output has conquered a huge space, perhaps unprecedented, in the North American market. Does this recent recognition open new opportunities or challenges for international streaming platforms?
I believe that streaming is playing an important role in breaking down geographical barriers, and much more than an opportunity or a challenge for platforms, this is an opportunity for artists. Today it is much easier for artists to outline their strategy to reach different global markets, whether with songs that draw from more than one rhythm and genre, or through collaborations with artists from other countries – or even by launching singles and EPs to “test” new projects in different places. And they can do it all around the globe much more easily than before, when a logistic backing was needed because the main media was physical.