Technology

Deal with Mexico's TV Azteca values music platform Deezer at $1.4 billion

The agreement results in a 30% increase of the music streaming platform value since its latest funding round in 2018

Image: Deezer / Courtesy
  • TV Azteca and companies of Grupo Salinas, its holding firm, will promote Deezer across their businesses and services;
  • Deezer has a growing user base in Latin American countries including Mexico, Colombia and Argentina and is the second largest streaming service in Brazil;
  • Global leader Spotify has also recently intensified competition by announcing new tailored content and features in Latin America.

Deezer, the France-based audio-streaming service, has reached a $40 million deal with Mexico’s TV Azteca, through which the Latin American broadcaster will take an undisclosed minority stake at the platform. The total investment values Deezer at $1.4 billion, which represents a 30% increase in the company’s value from its latest funding round in 2018.

TV Azteca and companies of Grupo Salinas, its holding firm, will promote Deezer across their businesses and services. For example, according to a joint statement, Elektra Group stores will sell vouchers to the music streaming service and the television networks will advertise the platform, in exchange for a share in Deezer’s revenues in Mexico.

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“Mexico is one of the fastest growing music markets in the world,” Hans-Holger Albrecht, CEO of Deezer. Mexico’s music streaming market is expected to more than double and exceed $700 million between 2019 and 2024. Deezer already has a growing user base in Latin American countries including Mexico, Colombia and Argentina. Deezer is also the second largest streaming service in Brazil

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

Hans-Holger Albrecht, CEO of Deezer

As part of the deal, the streaming 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 2 million viewers per episode. Deezer will focus on introducing 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.

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Mexico’s music streaming market is expected to more than double and exceed $700 million between 2019 and 2024. Deezer already has a growing user base in Latin American countries including Mexico, Colombia and Argentina. Deezer is also the second largest streaming service in Brazil. 

According to Deezer, Spanish speaking listeners can look forward to a wide range of original content from Latin artists. They will be also able to enjoy a growing number of expertly curated and locally relevant playlists. Deezer also recently launched podcasts in Mexico, helping listeners enjoy a large number of audio shows and stories.

“We believe this partnership will collaborate with their expansion strategies in the region while strengthening TV Azteca´s content offer,” commented Moshe Arel, Director of Innovation of Grupo Salinas and CEO of Azteca Play in TV Azteca.

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Spotify commands 85% of market share in Mexico

Deezer has a strong foothold in Latin America due to its early arrival to the region, seven years ago. But competition from the music industry behemoth Spotify is getting stronger. According to figures from the consultancy Competitive Intelligence Unit, published by the Financial Times, the Swedish app commands 85% of Mexican 15 million users of audio streaming platforms.

And Spotify has also intensified competition in the region, recently announcing a batch of measures to attract Latin American listeners, such as adapting a U.S. hit podcast, Sandra, to Mexican and Brazilian markets, and bringing its new lyrics feature to 17 Latin American countries. 

Apple Music, Google Music and emerging Amazon Music, also are crowding the field, particularly in the promising podcast segment. Latin American will have a lot to listen to.