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Business News Deals Digital Media
Deezer announces $40 million partnership to strengthen position in Mexican market
By Chris Cooke | Published on Friday 3 July 2020
Deezer has announced a major strategic partnership with Mexican broadcaster TV Azteca and its parent company Grupo Salinas that has been valued at $40 million. Under the deal, which will see TV Azteca get a minority stake in the streaming firm, the two partners will seek to capitalise on the ongoing streaming boom in Mexico.
Among other things, the two companies say, “music fans in Mexico will discover Deezer through creative campaigns on TV Azteca, demonstrating that Deezer is the one tap music experience that effortlessly delivers the music for the moment”. Meanwhile “Spanish speaking listeners can look forward to a wide range of original content from Latin artists”.
Latin America is a priority region for Deezer, which already enjoys second player status in the Brazilian streaming market, mainly thanks to its early arrival in the country and some mobile partnerships. When announcing the TV Azteca deal yesterday, Deezer said Mexico’s streaming music market in particular is expected to double in size in the next few years.
Its new business partner in the region will heavily promote Deezer across its channels and websites – and via the retail operations of another Grupo Salinas division called Grupo Elektra – to try and win over those Mexican consumers signing up to music streaming for the first time. That will include giving the streaming platform its own TV show. Or, technically, rebranding an existing show currently linked to another music app called Mugo. That show, currently called Mugo Live, will become Deezer Live.
Announcing all this, Deezer CEO Hans-Holger Albrecht said: “Mexico is one of the fastest-growing music markets in the world. We are excited to bring Grupo Salinas on board as a strategic partner and welcome them as a new investor in Deezer. 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”.
“We already have the team in place to make sure that Mexican music fans find the content they love”, he went on. “Thanks to TV Azteca we will have an unprecedented reach in Mexico, which means we can make even more content for Mexican music fans. We are also excited to start implementing our proven retail strategy by working closely with Grupo Elektra’s stores across the nation”.
Speaking for TV Azteca and Grupo Salinas, Moshe Arel added: “We are pleased to form this alliance with a world-class company like Deezer. This will be one of the most innovative and disruptive partnerships in the market. It is an exciting time to be proactive and to participate in the fast-growing music streaming industry while we connect music fans in Mexico”.
Deezer says that the new deal values its company at 1.3 billion euros, a 30% increase on the firm’s valuation the last time it raised investment back in 2018. That time existing shareholder Access Industries – also the owner of Warner Music – pumped some more money into the company alongside the likes of Saudi Arabia-based investment firm Kingdom Holding and Dubai-based media company Rotana Group.
Of course, any of you old-timers out there might remember that brief moment in the very early days of music streaming when Spotify and Deezer were considered head-to-head competitors. And the more cynical of you old-timers might then note that a recent surge in Spotify’s share price means it currently has a market cap valuation of over $50 billion. But shut up you cynical old-timers – new partners, new opportunities, a $1.3 billion dollar valuation, let’s all have a Deezer party!
