Hi! I’m Alex

DEEZER PRESENTATIONAlex Esser

18th Annual Nordic & Baltic Telecoms Executive Forum

September 2014

2

Contents

1/ Deezer Introduction

2/ Market Overview

3/ Product & Content Strategy

4/ Growth Strategy with B2B Partners: Telecom Carriers & Manufacturers

Introduction

Soft

bundle

Global Streaming Service

Award winning

recommendation engine

Deezer in two sentences

5

Deezer Product

6

Deezer Users Show Strong Engagement and Satisfaction

Hear this: Algorithms + Human Recommendation

7

Deezer Product

Soft

bundle

countries

182subs

6.5M

tracks

35M+monthly active users

16M

Deezer in figures

Fund-

raising (1)

Corporate

Geography

Product

9

Deezer Timeline: Key Milestones

2007 2008 2009 2010 20142011 2012 2013

Free service

on web

Pay

services

launched

Bundled offers

launched

France market

launch

Free service

on mobile

“Flow” launched

2006

Ad sales

launchedintegration

2015

US

launch

$[7]m $[12]m $93m(1)

UK

launch

Belgium

launch

Ger.

launch

Rest of

Europe

launch

Brazil

launch

Rest of

world

launch

Targeted market

growthGlobal expansion

Build business

model

Develop main features and

grow catalogue

Sign key

partnerships

Daniel Marhely

founds Deezer

Christopher

Coonen

(COO) joinsSimon

Baldeyrou joins

as CPO & CFO

Axel Dauchez

appointed new

CEO

New organisation

for global

expansion:

opening of 15

offices)

Axel Dauchez

leaves the

company

Didier Bench

appointed

Chairman of

the Board

Tyler Goldman

(US CEO)

joins

(1)of which $30m were used to pay non-recouped MGs of the 2013-2014 period

• Limited web streaming

• Mobile streaming in radio formats

• Advertising

• No offline access

• Recommendations and curation

• 128 kbps sound quality

10

Deezer Product Offering: A “Freemium” Model

Standard Offerings

Discovery Premium +

Free £/€/$ 9.99 per month

• Unlimited web and mobile streaming

• No advertising

• Offline access

• Recommendations and curation

• Up to 320 kbps sound quality

New Offerings

[Elite]Mid-Tier

Offering

• Premium + features

• On-demand music

concierge

• 24/7 customer service

• Flac 16 bits sound

quality (CD quality)

£/€/$ 19.99

per month

£/€/$ 4.99

per month

• Features TBD

Launched Sept

2014

Family Offer

£/€/$ 9.99 - 19.99

per month

Market Overview

12

The Deezer Ecosystem: Creating a Service Around Music Content

Record labels

& publishers

Talent

Independents

(International &

Local)

Majors

Music

Publishers

Collecting

Societies

Artists

Composers

Songwriters

Telco Partners

(Indirect)End users

Other Partners

(Direct)

13

Deezer Has a Truly Global Presence

Service available

Deezer in-market presence

Deezer local editors

Deezer footprint

USJapanOpening

2014 Opening 2015

182 countries

27.languages

30 payment methods

17 offices

300+ employees

50 local editors

14

Streaming is Becoming the Consumption Channel of Choice for Music

Recorded Music Revenue by Format ($bn)

Source: PWC, ABI, RIAA

(1) ABI Research; includes paying subscriber revenues only; excludes ad-based revenues and radio format-only services like Pandora

(1)

15

Market Potential: Scandinavia Leading The Way... RoW To Follow

Paying Subscriber Penetration (%)

26%

24%

3%3%

2% 2%1% 1%

0%

8%

15%

23%

30%

Norway Sweden France UK Spain US Germany Italy

SE & NO still growing!!!

Source: ABI, EMI Insight

8x – 20x upside to reach Norway & Sweden levels

Huge growth still ahead in DK & FI

16

Streaming is Already Replacing Downloads in More Mature Markets

(1)

2.58 2.63

2.85 2.82

2.45

0.210.36

0.57

0.85

1.20

2010 2011 2012 2013 2014E

Digital Music Downloading Digital Music Streaming

U.S. Digital Music Revenues by Type ($bn)

Source: PwC, Nielsen, RIAA; Streaming figures represent subscription and ad-based on-demand music streaming evenues, and excludes radio formats like Pandora

(1)Annualized figures based on H1 2014 digital units sold and tracks streamed growth rates

• Digital downloads down -

13% in H1 2014

• Streaming up +42% in H1

2014

17

Market Potential: Scandinavia Leading The Way... RoW To Follow

DEEZER is a credible alternative to Spotify in the Nordics

Source: ABI, EMI Insight

18

Market Potential: Scandinavia Leading The Way... RoW To Follow

Paying Subscriber Penetration Sweden + Denmark 2014

100%

302%

750%

100%127%

192%

0%

200%

400%

600%

800%

Sweden Q1 Sweden Q2 Sweden Q3 Denmark Q1 Denmark Q2 Denmark Q3

Source: ABI, EMI Insight

Product Content & Strategy

20

Deezer Users Show Strong Engagement and Satisfaction

Source: Deezer, June 2014.

Note: Only streams lasting more than 30 seconds are accounted as streams

(1) Active users are people who listened to at least one stream (more than 30 seconds). DAU = daily active user, MAU = monthly active user.

Streams per

direct Premium+

subscriber

per month

510Deezer NPS

score among

users

47DAUs / MAUs(1)

per direct

Premium+

subscriber

54%share of streams

on mobile devices

for Premium+

subscribers

>70%

21

Deezer Users Show Strong Engagement and Satisfaction

Hear this: Algorithms + Human Recommendation

22

Deezer Users Show Strong Engagement and Satisfaction

Flow: a New Way to Discover Music

Deezer Users Show Strong Engagement and Satisfaction

Flow: a New Way to Discover Music Flow a Step Up in User Satisfaction

Share of Tracks Not Skipped When Listening Through

Various Radio Formats

84% 83%

74%

Playlist radio Flow Radio

(non-discovery) (discovery) (discovery)

Flow now accounts for 8% of global

streams on Deezer

24

Deezer Has the Largest Catalogue Among Streaming Services

• Deezer develops extensive depth and breadth in all genres and all countries in order to:

• Satisfy all local tastes

• Satisfy all music genre communities

• Give emerging artists an opportunity to be heard everywhere

• Virtuous cycle where content providers want to work with

us due to the global exposure we can provide

30m

25m

20m

15m

The Deezer Catalogue Ranks No. 1Deezer Catalogue Strategy

35m

1m

India Brazil

AfricaThailand

Deezer Local Content

Country

South Korea

Japan

Brazil

Italy

Sweden

France

Denmark

Netherlands

Germany

%

100%

100%

90%

90%

95%

80%

80%

80%

70%

Deezer Local Labels Examples% of Top 10 Albums by

Local Artists

25

Bragging rights: Deezer Has a State-of-the-Art Product

“Deezer is willing to take a risk when it comes to discovery”

“As for now, I have been more impressed with Deezer’s integration

into 3rd party apps – eDJing, Soundrop, Seevl, and others”

“I was convinced to switch to Deezer and I’ll be wrapping up my Spotify

account”

Deezer vs. Spotify : a side-by-side comparisonRude Baguette. December 2, 2013

“We like Deezer's light, clear and simple

design across both the web/desktop versions of the

service and the mobile/tablet versions, and think it's

easier to navigate than the dark, quite complex

interface of Spotify”

“Deezer has a cool feature called Hear This (…), a

music feed that's personalised for you (…) We prefer

Here This to Spotify's 'Discover' feature”

Deezer vs Spotify comparison: what is the best music streaming

service?Tech Advisor. June 09, 2014

“Deezer arguably has the strongest editorial personality of any of these services”

“Deezer often includes a little comment from the Deezer staff member who is making these recommendations, and includes

their name, job title, and picture, giving it a strong human

touch”

Best Streaming service: which one to download? Trusted reviews, August 14, 2014

“The big difference between the two (Deezer and Spotify) is the team Deezer has, they know about music”

Melomanos a la Obra El Universal (Mexico’s largest newspaper). August 14, 2014

“The Swedish population is clearly enjoying the unique

recommendation engine and Deezer’s approach to ensuring content is

localised”

“Deezer proudly topped the podium with nine out of ten points. Natives

Spotify took second place while Norwegian Wimp came in third position”

Deezer beats spotifyM3 sveriges prylsajt. July 7, 2014

Innovative Partner Approach

27

Deezer Has An Adaptable and Scalable Platform…

Adapted to each userAdapted to each country Adapted to each partner

• Customizable technical integration

for a turnkey solution

• Joint development of UX and co-

branding

• Ability to launch 90 days after

signing

• 4 years of experience in the making

• Local user interface: language,

currency, payment methods

• Local content: tracks, genres,

editorial recommendations,

marketing offers

• Groundwork laid over past

3 years for populations now

beginning to stream

• World-class, in-house developed

recommendation algorithm

• Flow: personalized one-click radio

playback

• TO COME: seamless active and

passive experience

• TO COME: super-serve selected

customer segments

The adaptability of our platform allows us to be nimble and scalable

28

Deezer Has An Adaptable and Scalable Platform…

Adapted to each partner

Music Branding?

Social Media engagement?

Decrease churn?

ARPU upsell?

Reach new customer segments?

The adaptability of our platform allows us to be nimble and scalable

29

Deezer Tre

30

Deezer Tre

31

Deezer Tre

Fly your customer to Paris to see Pharrell Williams live

32

Deezer Global Subscriber Acquisition Strategy

Partners /

Vendors

Bundled

• Partners promote Deezer

through targeted channels

• Customer benefit s from a

promotional periodDefinition

Direct (subscribers billed by Deezer)

StandaloneB2B2C

partnerships

Paid traffic

acquisition

• Users coming at zero

cost

• Long-term result of all

other initiatives

including brand

awareness

Indirect(subscribers billed by telco operators)

Organic

• Deezer is included in the

customer mobile

contract

• No price transparency

• Carriers promote Deezer

unbundled to their

installed base

• Customer benefits from a

promotional period

A

B C D

• Acquisition through

traditional networks and

affiliation tools

NA

33

Deezer Tre

34

Western Europe

Country Telco Partner

36 Indirect Carrier Deals Globally….and more to come soon!

Type

Latin America

Country Telco Partner Type

Other

Country Telco Partner Type

A

Note: HB: Hardbundle; SA: Standalone; As at June 2014.

Others

Quickly reach mass market in any country

Marketing support

Long-term revenue visibility (hard-bundle)

Lower churn due to carrier billing (standalone)

Partners guarantee minimum volumes

Brand image improvement

• Music positioning

• Artist marketing activities & endorsement

Customer acquisition

• Unlimited music proposal

• Exclusive partnerships

Customer retention

• Churn and migration drop thanks to Deezer stickiness

ARPU enhancement

• Upgrades: higher tariff plans

• Upsell: data add-ons or revenue share on standalone

offers

35

60%

10%

75% 17%as much as

70%

>€500k media spend

+ sales incentives, in-store mktg

Benefits to Deezer Benefits to carriers

Churn

Reduction:

ARPU Uplift:

A Win-Win Proposition for Both Deezer and CarriersA

Churn

Reduction:

Marketing Spend

Commitments:

Zoom on Orange partnership [2010; 2018 renewal]

Hard

bundle

in churn and migration

Deezer active users

vs. non active users*

- 60%

Orange countries

Offering Deezer bundled with

their plans

7

Deezer with Orange NPS*

(vs. 50 for Deezer direct)

51

Deezer is bundled in selected Orange plans for the whole time of the contract at no additional cost for the customer

2010

2011

2012

2013

Orange France V1 (Incl.

investment from Orange &

WorMee acquisition)

Orange UK (EE)

Orange Poland

Orange Romania

Orange France V2(Deal renewal, extension of

Deezer bundle to all plans)

2014 Orange France V3

Orange Spain

Orange North Africa

Orange Senegal

Orange Ivory Coast

Orange Mauritius

Source: Orange France figures *Deezer survey on Orange France customers

A

T-Mobile partnership overview [2010; 2016 renewal]

in churn and migration

Deezer active users

vs. non active users

- 75%

T-Mobile countries

Offering Deezer bundled

with their plans

62012

2013

2014

T-Mobile Austria

T-Mobile Netherlands

T-Mobile Croatia [T-Hrvatski Telekom]

T-Mobile Czech Republic

T-Mobile Albania [AMC]

T-Mobile Slovakia

ARPU

Deezer active users

vs. non active users

+10%

Source: T-Mobile Netherland 2013 figures

Hard

bundle

Deezer is bundled in selected T mobile plans for the whole time of the contract at no additional cost for the customer

A

Tigo partnership overview [2013; 2014 renewal]

Hard

bundle

Tigo countries

Offering Deezer bundled

with their plans

6

Deezer is bundled in customer’s potpaid plans and prepaid daily, weekly or monthly offers

2013

2014

Tigo Bolivia

Tigo Colombia

Tigo Guatemala

Tigo Honduras

Tigo Paraguay

Tigo Salvador

First tests on prepaid

offers

Tigo Prepaid offers

launched in all Tigo

countries

Acquisition impact

% of Tigo-Deezer users declaring

Deezer as the main reason for

choosing this Tigo plan

43%Anti-churn impact

% of Tigo-Deezer users who would

leave Tigo if the Deezer bundle was

over

17%

Source: 2014 Deezer survey on Tigo-Deezer Colombia customers

A

39

Direct B2B2C PartnershipsB

Large-scale Partnerships Launched from Early 2014 Opportunity to Expand into Other Partnership Models

400+

Cars

Banks

Travel

Food

Ticketing

Media

Loyalty

programs

brands

We have partnered with

12 countriesEstimated >1m units to be sold in 12 months with

Deezer promotional offer

More than 100 countriesEstimated >10m units to be sold in 12 months with

Deezer promotional offer

22 countries>30,000 new subscribers in 4 months

A

B

C

Many of which

are

partnerships

that can be

replicated on a

larger scale

Soft

bundle

Global Streaming Service

Award winning

recommendation engine

Deezer in two sentences

Soft

bundle

Everyone is unique

Adapt the service to:

Every user

Every partner

Every country

Market Philosophy:

Thank You!

aes@deezer.com18th Annual Nordic & Baltic Telecoms Executive Forum

September 2014