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Deezer to enter US market with high audio quality service

By | Published on Thursday 11 September 2014


Deezer, the streaming service that once pledged to operate in more countries than currently exist on Planet Earth (perhaps they were pre-empting next week’s Scottish referendum), has announced its long-awaited launch in the United States Of America. Oh, and the launch of its new high-quality audio service, Deezer Elite. To two go hand-in-hand because the firm’s US arrival will occur next week via a partnership with home audio company Sonos, via whose kit the super quality audio will stream.

It’s an interesting strategy for entering the crowded US market, where the fully-on demand streaming set-ups compete with the unusually popular (unusual when compared to Europe) interactive radio services of the Pandora model (which enjoy more favourable licensing terms), and a download market which, while it may have peaked, is still pretty dominant for now. “We saw the US was highly fragmented, and therefore there would be a need to tailor [the service] to the needs of different users to create value and drive adoption” says Deezer’s North America chief Tyler Goldman.

But is high quality audio – provided at a premium price point – a USP that will drive customers to an unknown (in the US) brand?

There is an argument that high quality audio, always a niche product in the physical market, and the download domain (yeah, even Pono), could appeal to a wider audience in the streaming sector, because aside from the higher price point, the upgrade is relatively simple for the consumer. There’s no need to buy new kit, or work out how to organise FLAC files on your PC, just pay some money, press a button, and boom, high quality audio. Of course there’s plenty of evidence to suggest most people can’t tell the difference between a 320kbps MP3 and a CD quality WAV, but marketed right, that doesn’t necessarily matter.

However, does the high quality audio thing work as an opening gambit? Or is it a way of upgrading existing ten pound a month subscribers to twenty pounds a month? Which is what WiMP initially did when it added high quality audio to its existing service; though it looks likely that when the Norwegian company rolls out into the US and UK as Tidal, high quality will be its central USP, rather than an upsell add-on. As is the case with Deezer Elite, as it will be known in the US market.

Presumably the company hopes that its alliance with Sonos will help, ensuring it is in front of stream-savvy music consumers from the off, for whom higher quality audio may be a turn on. Though that’s still probably a niche audience, and even if Deezer can convince those consumers to pay its $15 price point (which could well rise to $20 down the line), it seems the start-up which, like its competitors, requires significant scale to succeed, would need considerably more customers than that.

But still, it’s an interesting way for Deezer to enter the American market and fulfil its ambition to have 102% of the planet covered. Presumably Atlantis is next.