Sony BMG and Deezer sign online music broadcasting deal Print
Written by Nicolas Jondet   
Wednesday, 10 October 2007 15:59

ImageDeezer.com, a free on-demand music streaming website has signed a deal with Sony BMG , the second largest record label in the world, to allow the broadcasting of 165,000 titles from artists such as Justin Timberlake or Alicia Keys. This deal represents an important milestone both in digital music distribution and in Deezer’s difficult journey towards legality. Deezer, whose previous incarnation had been shut down for copyright improprieties, was re-launched this summer thanks to a royalty payment deal with a French collecting society representing music artists. To become fully legal, Deezer still had to secure individual deals with each record label, in order to obtain authorization to broadcast their music. This quest for authorizations got off to a bad start as Universal Music refused to cooperate, denouncing the service as illegal. The deal with Sony thus constitutes a decisive step in securing Deezer’s future and an opportunity for a major record label to test the viability of a new revenue stream.

The first deal of its kind
In a press release dated October 10, Deezer and Sony BMG announced that they have reached an agreement allowing the website to broadcast music from the record label’s catalogue. Any internet user will now be able to legally access 165,000 music titles from the Sony BMG catalogue which includes songs from artists such as Justin Timberlake, Alicia Keys, Benabar, Christina, Aguilera, and Julien Doré.

The press release heralds the deal as the first of its kind in the world, as Sony had never before made its music available on a free music service which generates revenues through advertising. The financial details on how these advertising revenues will be shared between Deezer and Sony have not been disclosed, thus making it hard to assess the business ramifications of the deal. This lack of disclosure prompted Ratiatum.com to wonder whether Deezer had to concede financial guarantees to limit the financial risk taken by the record label. One possible such guarantee could be a minimum payment for each performance of a song, irrespective of the advertising revenues it generates.

Deezer’s journey to legality
Regardless of the financial technicalities, both parties were very enthusiastic about the deal. Christophe Lameignère, the CEO of Sony Music France described it as “a first step towards a new way of enjoying music legally in the digital environment.” He also welcomed Deezer’s commitment to abide by copyright laws.

Jonathan Benassaya, co-founder of Deezer (with Daniel Marhely), said this deal will be the first of many, with other record labels hoped to follow. He was also adamant that Deezer was becoming an attractive alternative to piracy. Benassaya notably claimed that the number of registered users to the service had surged from 300,000 to more than 1 million in the last month alone. This is all the more impressive as internet users do not need to be registered with the service to listen to the music (one can thus assume that the number of users is far more important than that of registered members).

If the collaboration proves durably successful and profitable for Sony BMG, other records labels might, unlike Universal Music, follow suit and sign deals with Deezer. Then, Deezer would complete its transformation, as Ratiatum.com rightly points, from a copyright villain to fully legal service collaborating with music labels (for more on Deezer, its deal with the collecting society SACEM and conflict with Universal Music see story in French-law.net).

Article first published Wednesday October 10, 2007 @ 14h59 GMT, last modified @ 18h50 GMT.

SOURCES
- Communiqué de presse «Deezer signe avec Sony BMG». Deezer.com, 10 octobre 2007.
- Deezer signe un accord avec Sony BMG. Ratiatum.com, 10 octobre 2007.
- Emmanuel Berretta, Musique en ligne : Deezer.com signe avec Sony-BMG. Le Point.fr, 10 octobre 2007.
- Ouriel Ohayon, Deezer fait un pas de plus vers la légalité et signe avec SonyBMG. TechCrunch France, 10 octobre 2007.
- Pierric Marissal, Deezer passe un accord avec BMG Sony. Infos du Net, 10 octobre 2007.
- Vincent Hermann, Deezer signe un accord important avec Sony BMG. PCimpact.com, 10 octobre 2007.
- Jérôme G., Deezer signe avec Sony BMG et devient encore plus légal. Generation-NT.com, 10 octobre 2007.

ADDED October 11
- Thomson Financial delivered by Newstex, Sony's Sony-BMG agrees deal to stream catalogue via French website Deezer. Cnn.com, October 10, 2007.
- Hélène Puel, La musique gratuite de Deezer approuvée par Sony BMG. 01net., 10 octobre 2007.
- Sony BMG signe avec le service de streaming Deezer. ZDNet France, 10 octobre 2007.

 

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