French music streaming service shares Deezer saw a decline on their maiden trading day, a new indication of the challenging environment for startups and loss-making businesses. On Tuesday, the company’s first trading day on the Paris Stock Exchange, the Paris-based rival to music streaming services like Spotify Technology SA SPOT, saw its shares drop by more than a quarter. After the business closed a SPAC acquisition in April that valued it at about $1.1 billion, the stock fell sharply, dropping more than 30 percent at one point.
Even though music streaming services have developed into a significant source of income for the music industry, Deezer’s underwhelming debut shows that there are limits to investor interest in such services. Along with Spotify, Deezer is up against similar services from Apple Music and Amazon.com Inc., which profit from their larger customer bases and additional revenue streams.
This year, the price of technology company shares has fallen. Startups are under a lot of pressure due to rising inflation and concerns about a recession; several of them have had to lower their fundraising goals recently. According to a close friend of Deezer, the company anticipated volatility in the first few trading days and has bright future possibilities.
About Deezer
Deezer is A French online music streaming platform. On a variety of devices, both online and off, consumers can listen to podcasts and music from record labels. Daniel Marhely created the original version of Deezer in Paris in 2006 under the name Blogmusik. He planned to use streaming technologies to provide fans of music with unrestricted access. The French agency SACEM accused the website of violating copyright in its previous iteration, causing it to be taken down in April 2007. After arranging with SACEM to pay copyright holders through revenue from website advertisements and by enabling users to download songs streamed on Deezer from iTunes, with Deezer earning a commission from each purchase, it was relaunched as Deezer in August 2007.
As of January 2019 it had over 30,000 radio channels, 100 million playlists, 90 million licensed recordings, 16 million monthly active users, and 7 million premium members.
Featured Image: Megapixl @ Rokas91
