Deezer: The Streaming Service That Could Have Been Spotify

Deezer's story is both inspiring and cautionary. Founded in 2007 by Daniel Marhely and Jonathan Benassaya, Deezer pioneered music streaming alongside Spotify. Its journey illustrates both French innovation and the challenges of competing globally.

The Early Innovation

Deezer launched streaming before smartphones existed, initially focusing on web-based listening. The product was excellent—clean interface, vast catalog, innovative features like Flow (personalized radio) that predated similar offerings from competitors.

The company expanded rapidly across Europe, Latin America, and the Middle East. By 2012, Deezer had 20 million users and partnerships with mobile operators worldwide. It seemed poised to dominate global music streaming.

The Missed Opportunity

But Deezer struggled to raise Silicon Valley-scale funding. While Spotify raised hundreds of millions to fund aggressive expansion and absorb losses, Deezer remained capital-constrained. The company focused on profitability over growth—a sensible strategy that proved fatal in a winner-take-all market.

"We were too French," admits an early executive. "We wanted to build a sustainable business while Spotify wanted to conquer the world. In streaming, conquest mattered more."

Pivoting and Persevering

Rather than surrender, Deezer adapted. It focused on markets Spotify ignored, developed innovative features, and built profitable partnerships. The company's HiFi offering attracted audiophiles. Integration with voice assistants and smart speakers showcased technical agility.

Today's Deezer, while smaller than Spotify, remains profitable and innovative. Its 2022 SPAC listing valued the company at €1 billion. More importantly, Deezer proved French companies could compete in consumer internet—even if they couldn't always win.

Lessons from Deezer

1. Timing and capital matter: In winner-take-all markets, being early isn't enough without resources 2. Choose your battles: Focus on winnable segments rather than head-on competition 3. Innovation alone isn't sufficient: Business model and go-to-market strategy matter equally 4. Persistence pays: Surviving and adapting can lead to eventual success 5. Create your own game: If you can't win theirs, change the rules