Deezer, French Music Streaming Service, Plans I.P.O.

By MARK SCOTT
Deezer, the French music streaming service, said on Tuesday that it had filed for an initial public offering in a bid to raise funds to take on global rivals like Spotify and Apple.
The announcement came as competition intensified in recent months in the music-streaming industry with Apple starting its own on-demand service and new offerings, including Tidal, a rival service from Jay Z, sprouting up across the globe.
Deezer, which plans to list its shares in Paris, did not disclose how much capital it would seek through its stock offering. Industry talk, though, indicates the company has been looking for new investment that would value it at around 1 billion euros, or $1.1 billion.
Hans-Holger Albrecht, Deezer’s chief executive, said that raising money from the public markets would help the company compete on a global stage and allow more people to invest in the fast-growing world of music streaming.
“We’ll be the only stock if people want to invest,” Mr. Albrecht said on Tuesday during an interview, referring to the music-streaming industry. “We’ll be the only pure streaming service in the public markets.”
Mr. Albrecht declined to comment on the potential price range for the I.P.O., how much Deezer could be valued after the listing or when the company would go public.
Despite the plans for a stock offering, the Paris-based company still lags behind Spotify, its larger Swedish rival that recently raised hundreds of millions of dollars through private investors, valuing the company at more than $8 billion.
Deezer has about six million paying subscribers in 180 countries, compared with Spotify’s 20 million paying users, according to statistics from both companies. Apple has reportedly signed around 10 million subscribers to its service.
The French company also generated roughly half of its revenue in the first six months of 2015 from its home market, while the rest of Western Europe was the company’s second-largest region by number of paying subscribers, according to Mr. Albrecht.
Emerging markets in places like Latin America also constitute a large percentage of Deezer’s business, he added. In contrast, the United States remains Spotify’s largest market, where it also competes against companies like Pandora.
Pandora’s shares are publicly traded, but licensing limitations restrict the company’s operations to the United States, Australia and New Zealand.
In many countries, particularly those in emerging markets, Deezer has expanded rapidly through partnerships with local telecommunications operators that have bundled Deezer’s music service with monthly cellphone packages.
“Deezer has a very unique position in terms of geographical footprint and partnerships with telcos,” Mr. Albrecht added. The I.P.O., he said, “is all about scaling up.”