Music-Streaming Service Deezer Plans IPO

PARIS—Music-streaming service Deezer is seeking to raise capital through an initial public offering, as the firm faces competition from bigger and richer rivals, including Apple Inc.

The company said Tuesday that it plans to file for an offering on the Paris stock exchange as soon as it receives the approval of French financial authorities. Deezer said it would hold news conferences offering more details later Tuesday morning.

A Deezer IPO will give a new window into the economics and sustainability of the music-streaming business. Streaming has been eating away at physical and digital album sales for several years, and some artists have complained about the low royalties it generates. At the same time, some major streaming players, including Spotify, continue to lose money as they spend to expand, while shelling out royalties to labels.

Deezer appears no different. Revenue for Deezer parent company Blogmusik SA rocketed 52% in 2014 to €138 million ($154.44 million), but the firm remained in the red, losing €23 million, according to a legal filing this summer in France. The parent company posted a €11 million loss in the first half of 2015, but no comparable year-earlier figure was disclosed.

Deezer claims some 6 million paying subscribers and says it is available in over 180 countries. By contrast Spotify says that it has 20 million paying subscribers. Both companies face a new challenge from Apple, which launched its Apple Music subscription service in June.

Deezer in 2012 raised €100 million in funding from investors including Access Industries, the U.S. company owned by Len Blavatnik. Other investors include French telecom firm Orange SA.

Write to Sam Schechner at sam.schechner@wsj.com

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(END) Dow Jones Newswires

September 22, 2015 02:55 ET (06:55 GMT)

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