Deezer buys Muve Music to tap US streaming market

Deezer, the world’s biggest music subscription service after Spotify, has acquired Muve Music from Cricket Wireless as part of an aggressive strategy to expand in the US.

Muve is one of the largest music subscription services in the US, boasting about 2m subscribers as of 2013. It was launched in 2011 and grew rapidly because Cricket, a prepaid mobile operator owned by AT&T, bundled the music service into its payment plans.

For Paris-based Deezer, which has more than 6m subscribers worldwide, the deal allows it to instantly acquire a significant customer base in the US, the world’s largest music market.

The acquisition comes at a time of fierce competition in the fast-growing market for music subscriptions. Apple and Google are among the companies fighting to take market share from streaming specialists such as Deezer and Spotify, the market leader with 12.5m subscribers worldwide.

Deezer wants to attract as many of Muve’s subscribers as possible to switch before it closes the latter service in the next month. It will try to lure them with a free trial and the ability to transfer their existing music libraries and playlists directly into the Deezer app.

As part of the transaction, Deezer has entered into an exclusive agreement with Cricket to become the sole music service that is marketed to the prepaid mobile operator’s customers.

Cricket’s customers, many of which come from lower-income groups, will be able to subscribe to Deezer for $6 per month, cheaper than the $10 a month charged by Spotify and other premium music subscription services in the US.

Jennifer Van Buskirk, president of Cricket Wireless, said the deal was designed to “satisfy our customers’ growing need for an unparalleled premium music experience”.

Muve Music has been up for sale since 2013, when AT&T purchased Cricket’s parent company, Leap Wireless, for $1.2bn.

Alice Enders, analyst at Enders Analysis, said Muve had been “wilting on the vine” over the past year, having failed to keep up with the advances in design and technology made by better-funded services.

Cricket and Deezer declined to reveal the terms of the transaction.

Deezer, whose investors include Warner Music Group’s owner, Access Industries, last month appointed Hans-Holger Albrecht as its chief executive. Mr Albrecht was previously chief executive of Millicom, a telecom and media group focused on Africa and Latin America.

Agreeing partnerships with telecoms groups to promote its service has been a core part of Deezer’s global expansion strategy. Until recently, the company has focused on Europe and other regions outside the US.

It entered the US market last year with the launch of a higher-priced offering with CD-quality sound aimed at the niche market for audiophiles. Deezer said this “Elite” service, which costs $19.99 a month at full price, has gained more than 100,000 subscribers.

The company also last year purchased Stitcher, a US radio show and podcast app, seeking to supplement its music content with the spoken word.