The Company That Owns Warner Music Group Just Took Control Of Music Streamer Deezer
Access Industries has taken control of global music stream Deezer. The move advances the goal of the conglomerate, which also owns Warner Music Group and has made major investments in Songkick ($25M), Shazam ($9M) and in 2013-14 Beats ($120M million), to become an integrated full stack music company.
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French authorities have approved Access Industries taking "exclusive control" of global music streaming service Deezer. The terms of the deal, which just became public this week, followed a $100 million January cash infusion from Access after Deezer was forced to pull an IPO. Access had invest another $100 million in the music streamer in 2012.
Because Access Industries also owns Warner Music, the world's third largest music group, authorities in France, where Deezer is based, were required to investigate possible conflicts of interest.
Size Matters: Market Share
But while Deezer controls 40-50% of the French music streaming market, compared to 20-30% for Spotify, their global market share was just 5% vs. 40-50% each for Spotify and Apple Music/iTunes and 5% for Napster.
In the end, French authorities ruled that size matters. "Since Warner is the smallest major, it only has a limited market power with regards to other platforms, which limits the risks of discriminating Warner Music to the benefit of Deezer," according to the decision.
