French startup Deezer has launched a two-tiered premium service model intended to extract revenue from power users. The cost for the premium service is €4.99 per month. This will remove advertising and also offer higher-quality streams. For €9.99 monthly you can add a desktop app and mobile streaming to phones including iPhones, BlackBerrys and Android devices. The premium services will be rolled out first in France, then elsewhere in Europe.
It remains to be seen if the model will work because Deezer’s immediate rival Spotify sees a very low conversion rate towards its paying services. It’s still to be seen if drawing subscription revenue from a low percentage of power users can cover streaming costs that aren’t paid for by advertising income.
Unlike Spotify’s, Deezer’s service is already available in the U.S., albeit with a very restricted catalogue as the company is still negociating linces with various labels.
