Apple's Latest Competition Is Named 'Deezer'

European streaming music company Deezer has announced a $109 million fundraising round as the company fights to compete with larger rivals such as Spotify, Apple Inc. AAPL and Pandora Media Inc P.

Deezer, which sports more than six million subscribers, currently stands as the third-largest pay music service in the world behind only Spotify and Apple.
 

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Despite its success in Europe, however, Deezer has been unable to negotiate a contract with a phone carrier in the U.S. and has gained limited traction in the market so far. In addition, the company has not yet found a solution to the problem of profitability. Online music services currently must fork over the majority of their revenue to record labels as royalty payments. In addition, Billboard reports that nearly half of Deezer’s customers are currently not generating revenue for the company.

There’s no question that Deezer’s large subscriber base and fresh cash infusion has the attention of Apple and other rivals. However, Deezer still has an uphill battle ahead if it intends to significantly penetrate the U.S. market.

Disclosure: the author holds no position in the stocks mentioned.