LONDON (Reuters) - From Brazilian gospel to Puerto Rican reggaeton and Dutch hip-hop, music streaming company Deezer is scouring the globe for gaps in the market where it can survive and thrive against Spotify and Apple.
As part of this strategy, launched this year and called Deezer Next, it is dispatching local teams of “editors” to identify talent in niche genres and create original content, Netflix-style.
Spotify is also loss-making but is nevertheless valued at $13 billion because of this market potential, as well as investor expectations that its fast-growing user base will allow it to negotiate increasingly lower royalty payments to labels.
The latter two, as diversified tech giants, have the advantage of being able to rack up losses on streaming while the market grows and recoup the money from bumper sales of products like phones and tablets.
Independent music analyst Bob Lefsetz believes Deezer benefited from a “first-mover advantage” in France, making it hard to replicate its success elsewhere since Spotify and Apple already lead the pack in most other markets.
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