Access Industries, the multivalent business owned by billionaire and former oligarch Len Blavatnik and the parent company to the Warner Music Group, now has control of its own streaming service: Deezer.
Sources close to Access told MBW that its 50%+ ownership of Deezer was a mechanical result of its investment in January. Len Blavatnik’s company is said to have no plans to make any changes amongst Deezer’s management. Although Deezer is now majority owned by US-based Access, the streaming firm’s HQ will remain in Paris.
This was the second time that Access had invested in the Spotify rival; it joined together with Idinvest to raise an initial €100m investment into the firm back in October 2012. Information regarding Access’s percentage stake in Deezer is redacted, but ElectronLibre suggests that Access now owns in excess of 50% in Deezer, with Orange taking a 10% stake.
Access’s control of Deezer may raise alarm bells amongst Universal, Sony and the indies – who will point out that Access is also the 100% owner of Warner Music Group, which it bought for $3.3bn in 2011. The French competition authorities acknowledged this in their decision, pointing out the ‘vertical link’ between Access, Deezer and Warner.
The report admitted that this ‘vertical link’ had the potential to restrict competition ‘potentially crowding out competitors or penalizing them by increasing their costs’. However, it said the risk of anti-competitive behavior was significantly lowered due to Warner’s market share in key territories being lower than 30%.
Within the European Economic Area (EEA), the authorities estimated that Warner’s recorded music market share stood at 10-20%, with Universal on 30%-40% and Sony plus the independents on 20%-30% apiece. They also estimated that Deezer held a 0%-5% market share of total digital music revenues across the EEA, with both Spotify and iTunes (Apple) on 40%-50% each.
However, Deezer was estimated to hold a 40%-50% market share of streaming music value in France alone, with Spotify on 20%-30%.