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Warner Music Owner Takes Control Of Deezer

DeezerEven though Deezer has been available in North America for well over a year, not that many consumers are familiar with the streaming service. In France, where the service is based, Deezer is Spotify’s main competition with almost 50% of the market share. Now comes word that financier Len Blavatnk’s Access Industries has taken control of the company with through an investment increase. Access had already invested $100 million in Deezer in 2012, but it’s been reported that the investment is now greater than 50%.

What’s significant is that the investment sets up a huge conflict of interest, as Access already owns Warner Music. Will Deezer now favor Warner artists? Warner Music actually needs an additional push in the territories where Deezer is strong as it’s market share there hovers around 30%. Of course, the major labels already own part of Spotify, but when all 3 majors own equity, they counter-balance one another when it comes to favoritism. That’s not the case here with Access and Deezer though.

Access has a number of holdings in the entertainment business (most notably Warner and Perform Group, who owns Sporting News and the sport streamer DAZN), but also in real estate and natural resources and chemicals.

Supposedly Deezer will remain based in Paris and there will be no immediate changes, but corporate changes don’t have to be major to influence playlists. While there’s no direct indication that will happen, you’d have to wonder why Access would buy into a streaming service (especially one with a healthy, but still low at 10 million active users) unless it was to create some sort of synergy with its other assets.

As predicted here and elsewhere, the streaming landscape is gradually contracting. Soon there will only be a few major players left in the space, and it’s entirely possible that many of them will be controlled by the major labels. Of course, Apple Music, Google Play and Amazon Prime Music fall outside that premise, so at least there’s some hope that the streaming business can be free major label dependency in the future.

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