- Music streaming insights and numbers from Deezer perspective - Working with B2B2C partnerships - Deezer content strategy - Music industry in numbers - Future projections

1. Hi! I’m Alex
DEEZER PRESENTATION
Alex Esser
18th Annual Nordic & Baltic Telecoms Executive Forum
September 2014

2. 2
Contents
1/ Deezer Introduction
2/ Market Overview
3/ Product & Content Strategy
4/ Growth Strategy with B2B Partners: Telecom Carriers & Manufacturers

3. Introduction

4. Soft
bundle
Deezer in two sentences
Global Streaming Service
Award winning
recommendation engine

5. 5
Deezer Product

6. Deezer Users Show Strong Engagement and Satisfaction
6
Hear this: Algorithms + Human Recommendation

7. 7
Deezer Product

8. Soft
bundle
182
countries
6.5M
subs
35M+
tracks
16M
monthly active users
Deezer in figures

9. Product
Geography
Fund-raising
(1)
Corporate
9
Deezer Timeline: Key Milestones
2007 2008 2009 2010 2011 2012 2013 2014
Free service
on web
Pay
services
launched
Bundled offers
launched
France market
launch
Free service
on mobile
“Flow” launched
2006
Ad sales
launched
integration
2015
US
launch
UK
launch
Belgium
launch
Ger.
launch
Rest of
Europe
launch
Brazil
launch
Rest of
world
launch
$[7]m $[12]m $93m(1)
Targeted market
growth
Global expansion
Build business
model
Develop main features and
grow catalogue
Sign key
partnerships
Daniel Marhely
founds Deezer
Christopher
Coonen
(COO) joins
Simon
Baldeyrou joins
as CPO & CFO
Axel Dauchez
appointed new
CEO
New organisation
for global
expansion:
opening of 15
offices)
Axel Dauchez
leaves the
company
Didier Bench
appointed
Chairman of
the Board
Tyler Goldman
(US CEO)
joins
(1)of which $30m were used to pay non-recouped MGs of the 2013-2014 period

10. Deezer Product Offering: A “Freemium” Model
• Limited web streaming
• Mobile streaming in radio formats
• Advertising
• No offline access
• Recommendations and curation
• 128 kbps sound quality
10
Standard Offerings
Discovery Premium +
Free £/€/$ 9.99 per month
• Unlimited web and mobile streaming
• No advertising
• Offline access
• Recommendations and curation
• Up to 320 kbps sound quality
New Offerings
[Elite]
Mid-Tier
Offering
£/€/$ 19.99
per month
• Premium + features
• On-demand music
concierge
• 24/7 customer service
• Flac 16 bits sound
quality (CD quality)
£/€/$ 4.99
per month
• Features TBD
Launched Sept
2014
Family Offer
£/€/$ 9.99 - 19.99
per month

11. Market Overview

12. The Deezer Ecosystem: Creating a Service Around Music Content
12
Talent
Artists
Composers
Songwriters
Record labels
& publishers
Majors
Independents
(International &
Local)
Music
Publishers
Collecting
Societies
Telco Partners
(Indirect)
End users
Other Partners
(Direct)

13. Opening Japan
2014 Opening 2015
13
Deezer Has a Truly Global Presence
Deezer footprint
US
Service available
Deezer in-market presence
Deezer local editors
182 countries
27.languages
30 payment methods
17 offices
300+ employees
50 local editors

14. Streaming is Becoming the Consumption Channel of Choice for Music
14
Recorded Music Revenue by Format ($bn)
Source: PWC, ABI, RIAA
(1) ABI Research; includes paying subscriber revenues only; excludes ad-based revenues and radio format-only services like Pandora
(1)

15. Market Potential: Scandinavia Leading The Way... RoW To Follow
15
Paying Subscriber Penetration (%)
SE & NO still growing!!!
26%
24%
3%
3%
2% 2%
1% 1%
30%
23%
15%
8%
0%
Norway Sweden France UK Spain US Germany Italy
Source: ABI, EMI Insight
8x – 20x upside to reach Norway & Sweden levels
Huge growth still ahead in DK & FI

16. Streaming is Already Replacing Downloads in More Mature Markets
16
(1)
U.S. Digital Music Revenues by Type ($bn)
2.58 2.63
2.85 2.82
2.45
0.21
0.36
0.57
0.85
1.20
2010 2011 2012 2013 2014E
Digital Music Downloading Digital Music Streaming
Source: PwC, Nielsen, RIAA; Streaming figures represent subscription and ad-based on-demand music streaming evenues, and excludes radio formats like Pandora
(1)Annualized figures based on H1 2014 digital units sold and tracks streamed growth rates
• Digital downloads down -
13% in H1 2014
• Streaming up +42% in H1
2014

17. Market Potential: Scandinavia Leading The Way... RoW To Follow
17
DEEZER is a credible alternative to Spotify in the Nordics
Source: ABI, EMI Insight

18. Market Potential: Scandinavia Leading The Way... RoW To Follow
18
Paying Subscriber Penetration Sweden + Denmark 2014
100%
302%
750%
100%
127%
192%
800%
600%
400%
200%
0%
Sweden Q1 Sweden Q2 Sweden Q3 Denmark Q1 Denmark Q2 Denmark Q3
Source: ABI, EMI Insight

19. Product Content & Strategy

20. Deezer Users Show Strong Engagement and Satisfaction
510
47
54%
Source: Deezer, June 2014.
Note: Only streams lasting more than 30 seconds are accounted as streams
(1) Active users are people who listened to at least one stream (more than 30 seconds). DAU = daily active user, MAU = monthly active user.
20
Streams per
direct Premium+
subscriber
per month
Deezer NPS
score among
users
DAUs / MAUs(1)
per direct
Premium+
subscriber
>70%
share of streams
on mobile devices
for Premium+
subscribers

21. Deezer Users Show Strong Engagement and Satisfaction
21
Hear this: Algorithms + Human Recommendation

22. Deezer Users Show Strong Engagement and Satisfaction
22
Flow: a New Way to Discover Music

23. Deezer Users Show Strong Engagement and Satisfaction
Flow: a New Way to Discover Music Flow a Step Up in User Satisfaction
Share of Tracks Not Skipped When Listening Through
Various Radio Formats
84% 83%
74%
Playlist radio Flow Radio
(non-discovery) (discovery) (discovery)
Flow now accounts for 8% of global
streams on Deezer

24. Deezer Has the Largest Catalogue Among Streaming Services
24
• Deezer develops extensive depth and breadth in all genres
and all countries in order to:
• Satisfy all local tastes
• Satisfy all music genre communities
• Give emerging artists an opportunity to be heard
everywhere
• Virtuous cycle where content providers want to work with
us due to the global exposure we can provide
30m
25m
20m
15m
The Deezer Catalogue Strategy Deezer Catalogue Ranks No. 1
35m
1m
Deezer Local Content
India Brazil
Thailand Africa
Country
South Korea
Japan
Brazil
Italy
Sweden
France
Denmark
Netherlands
Germany
%
100%
100%
90%
90%
95%
80%
80%
80%
70%
Deezer Local Labels Examples
% of Top 10 Albums by
Local Artists

25. Bragging rights: Deezer Has a State-of-the-Art Product
“Deezer is willing to take a risk when it comes to discovery”
“As for now, I have been more impressed with Deezer’s integration
into 3rd party apps – eDJing, Soundrop, Seevl, and others”
“I was convinced to switch to Deezer and I’ll be wrapping up my Spotify
account”
25
Deezer vs. Spotify : a side-by-side comparison
Rude Baguette. December 2, 2013
“We like Deezer's light, clear and simple
design across both the web/desktop versions of the
service and the mobile/tablet versions, and think it's
easier to navigate than the dark, quite complex
interface of Spotify”
“Deezer has a cool feature called Hear This (…), a
music feed that's personalised for you (…) We prefer
Here This to Spotify's 'Discover' feature”
Deezer vs Spotify comparison: what is the best music streaming
service?
Tech Advisor. June 09, 2014
“The big difference between the two (Deezer and Spotify) is the
team Deezer has, they know about music”
Melomanos a la Obra
El Universal (Mexico’s largest newspaper). August 14, 2014
“Deezer arguably has the strongest editorial personality
of any of these services”
“Deezer often includes a little comment from the Deezer staff
member who is making these recommendations, and includes
their name, job title, and picture, giving it a strong human
touch”
Best Streaming service: which one to download?
Trusted reviews, August 14, 2014
“The Swedish population is clearly enjoying the unique
recommendation engine and Deezer’s approach to ensuring content is
localised”
“Deezer proudly topped the podium with nine out of ten points. Natives
Spotify took second place while Norwegian Wimp came in third position”
Deezer beats spotify
M3 sveriges prylsajt. July 7, 2014

26. Innovative Partner Approach

27. Deezer Has An Adaptable and Scalable Platform…
Adapted to each country Adapted to each partner Adapted to each user
• Customizable technical integration
for a turnkey solution
• Joint development of UX and co-branding
• Ability to launch 90 days after
signing
• 4 years of experience in the making
27
• Local user interface: language,
currency, payment methods
• Local content: tracks, genres,
editorial recommendations,
marketing offers
• Groundwork laid over past
3 years for populations now
beginning to stream
• World-class, in-house developed
recommendation algorithm
• Flow: personalized one-click radio
playback
• TO COME: seamless active and
passive experience
• TO COME: super-serve selected
customer segments
The adaptability of our platform allows us to be nimble and scalable

28. Deezer Has An Adaptable and Scalable Platform…
Adapted to each partner
Music Branding?
Social Media engagement?
Decrease churn?
ARPU upsell?
Reach new customer segments?
The adaptability of our platform allows us to be nimble and scalable
28

29. 29
Deezer Tre

30. 30
Deezer Tre

31. 31
Deezer Tre
Fly your customer to Paris to see Pharrell Williams live

32. Deezer Global Subscriber Acquisition Strategy
32
Partners /
Vendors
Bundled
• Partners promote Deezer
through targeted channels
• Customer benefit s from a
A
Definition promotional period
Direct
(subscribers billed by Deezer)
Standalone
B2B2C
partnerships
Paid traffic
acquisition
• Users coming at zero
cost
• Long-term result of all
other initiatives
including brand
awareness
Indirect
(subscribers billed by telco operators)
Organic
• Deezer is included in the
customer mobile
contract
• No price transparency
• Carriers promote Deezer
unbundled to their
installed base
• Customer benefits from a
promotional period
B C D
• Acquisition through
traditional networks and
affiliation tools
NA

33. 33
Deezer Tre

34. 36 Indirect Carrier Deals Globally….and more to come soon!
34
Western Europe
Country Telco Partner
Type
Latin America
Country Telco Partner Type
Other
Country Telco Partner Type
A
Note: HB: Hardbundle; SA: Standalone; As at June 2014.
Others

35. A Win-Win Proposition for Both Deezer and Carriers
Benefits to Deezer Benefits to carriers
 Quickly reach mass market in any country
 Marketing support
 Long-term revenue visibility (hard-bundle)
 Lower churn due to carrier billing (standalone)
 Partners guarantee minimum volumes
 Brand image improvement
• Music positioning
• Artist marketing activities & endorsement
 Customer acquisition
• Unlimited music proposal
• Exclusive partnerships
 Customer retention
• Churn and migration drop thanks to Deezer stickiness
 ARPU enhancement
• Upgrades: higher tariff plans
• Upsell: data add-ons or revenue share on standalone
offers
75% 17% as much as
70%
35
60%
10%
>€500k media spend
+ sales incentives, in-store mktg
Churn
Reduction:
ARPU Uplift:
A
Churn
Reduction:
Marketing Spend
Commitments:

36. Zoom on Orange partnership [2010; 2018 renewal]
Hard
bundle
Deezer is bundled in selected Orange plans for the whole
time of the contract at no additional cost for the customer
7
Orange countries
Offering Deezer bundled with
- 60%
in churn and migration
Deezer active users
vs. non active users*
their plans
51
Deezer with Orange NPS*
(vs. 50 for Deezer direct)
2010
2011
2012
2013
Orange France V1 (Incl.
investment from Orange &
WorMee acquisition)
Orange UK (EE)
Orange Poland
Orange Romania
Orange France V2
(Deal renewal, extension of
Deezer bundle to all plans)
Orange Senegal
Orange Ivory Coast
Orange Mauritius
2014 Orange France V3
Orange Spain
Orange North Africa
Source: Orange France figures *Deezer survey on Orange France customers
A

37. T-Mobile partnership overview [2010; 2016 renewal]
6
T-Mobile countries
Offering Deezer bundled
- 75%
in churn and migration
Deezer active users
vs. non active users
with their plans
2012
2013
2014
T-Mobile Austria
T-Mobile Netherlands
T-Mobile Croatia
[T-Hrvatski Telekom]
T-Mobile Czech Republic
T-Mobile Albania [AMC]
T-Mobile Slovakia
+10%
ARPU
Deezer active users
vs. non active users
Source: T-Mobile Netherland 2013 figures
Hard
bundle
Deezer is bundled in selected T mobile plans for the
whole time of the contract at no additional cost for the
customer
A

38. Tigo partnership overview [2013; 2014 renewal]
Hard
bundle
Deezer is bundled in customer’s potpaid plans and
prepaid daily, weekly or monthly offers
6
Tigo countries
Offering Deezer bundled
with their plans
2013
2014
Tigo Bolivia
Tigo Colombia
Tigo Guatemala
Tigo Honduras
Tigo Paraguay
Tigo Salvador
First tests on prepaid
offers
Tigo Prepaid offers
launched in all Tigo
countries
43%
Acquisition impact
% of Tigo-Deezer users declaring
Deezer as the main reason for
choosing this Tigo plan
17%
Anti-churn impact
% of Tigo-Deezer users who would
leave Tigo if the Deezer bundle was
over
Source: 2014 Deezer survey on Tigo-Deezer Colombia customers
A

39. 39
Direct B2B2C Partnerships
B
Large-scale Partnerships Launched from Early 2014 Opportunity to Expand into Other Partnership Models
We have partnered with
400+
brands
Cars
Banks
Travel
Food
Ticketing
Media
Loyalty
programs
22 countries
>30,000 new subscribers in 4 months
12 countries
Estimated >1m units to be sold in 12 months with
Deezer promotional offer
More than 100 countries
Estimated >10m units to be sold in 12 months with
Deezer promotional offer
A
B
C
Many of which
are
partnerships
that can be
replicated on a
larger scale

40. Soft
bundle
Deezer in two sentences
Global Streaming Service
Award winning
recommendation engine

41. Soft
bundle Everyone is unique
Adapt the service to:
Every user
Every partner
Every country
Market Philosophy:

42. Thank You!
aes@deezer.com
18th Annual Nordic & Baltic Telecoms Executive Forum
September 2014