Europe’s Facebook Economy

Although Deezer, a popular French music streaming service, expanded into the UK in September, the bulk of its subscribers are in France.That’s about to change. Thanks to Facebook, Deezer is going global overnight. At Le Web 2011 CEO Axel Dauchez (pictured on Informilo's home page) is expected to announce that the music streaming service, which currently has 1.4 million premium offer subscribers and 20 million users, will launch in more than 130 countries on the social networking giant’s platform.

“We will be the only partner of Facebook in all countries except the U.S. and Japan,” Dauchez said in an interview with Informilo. The move, he says, will transform  the French music streaming service “into the YouTube of the music world.”

The deal will certainly go a long way towards helping Deezer compete with Spotify, another European music streaming service that has a strong user base in Europe and is one of four music streaming services available in the U.S. via the Facebook platform.

"It is unbelievable how big the size of the market is outside of the major countries and nobody is addressing them," says Dauchez.  Some 80% of the music market is concentrated in just seven countries and those countries represent only 30% of Facebook users. Facebook has 500 million users in the countries where Deezer plans to launch on its platform, significantly broadening Deezer’s potential audience.  The social network is the perfect conduit for urging people to spontaneously share music online, says Dauchez. Details of the roll-out will be announced during Le Web 2011, an annual gathering in Paris that attracts some 3,000 players in the Internet sector.

Deezer is one of dozens of European start-ups in areas such as music, gaming and fashion which are thriving by putting their IP on Facebook’s platform. Facebook now has a large team of technical evangelists in Europe and it is organizing a workshop at Le Web to attract more developers. “A key message at Le Web is that we really want to help European start-ups to accelerate their business by distributing and monetizing on the Facebook platform ” says Julien Codorniou, Facebook’s head of platform partnerships for France and Benelux.

Many already are. Take the case of King.com, a London-based cross-platform social games company. Its last game, Bubble Witch Saga, is the first casual game on Facebook to hit 2.8 million daily players in just two months. With 22 million monthly views King.com is now ranked as the fourth-largest game developer on Facebook worldwide, behind Germany’s Wooga, which is number three.

Then there is Nordeus, a  gaming company based in Belgrade that makes a social game that enables people to run their own football clubs, play with their friends and compete against the world. Its flagship game, Top Eleven, this summer became the most-played sports game on the Web after overtaking EA SPORTS FIFA Superstars. Top Eleven now has nearly one million daily users, who log on every day to play on Facebook or their mobile phones. “The European companies and players have understood that it is not a Californian world on Facebook,” says Codorniou.

Mark Zuckerberg was prescient when he announced in 2007 that Facebook would allow different developers to build IP on top and predicted that one day companies would create products that would exist only on Facebook, says Codorniou.

"Because of Facebook and the social channel, we had the opportunity — three young guys from Serbia without too much cash and no venture capital — within one year to build the most popular online sports game,” says Nordeus CEO Branko Milutinovic.  “It is really a dream come true.”

For its part, King.com took one of its successful games and designed a Facebook-only version that is deeper and more social. Bubble Witch Saga has a story line — there are 10 episodes, and close to 100 levels. Players have to ask their friends to help them proceed. Of course, players can also pay money to buy things like magic charms to help improve their scores.

King.com was not one of the first to move its games onto the Facebook platform, says Mark Charkin, executive vice president of global business development and ad sales at King.com. “But since we did, business has been blossoming,” he says. The number of King.com games played per month has gone up from 500 million to 1.2 billion, increasing the percentage of money the company earns from advertising and micro transactions “very dramatically,” says Charkin.He won’t reveal King.com’s  revenues, but says they are “in the high double-digit millions.”

Wooga, the maker of games such as Brain Buddies and Bubble Island, is also benefiting financially from putting its games on the Facebook platform, says Jan Miczaika, head of operations at the Berlin-based social gaming company. But that is not the only upside. “Working with Facebook is a process that allows us to test out new features and get feedback in the form of numbers and data,” he says. “We are really happy with the relationship.”

So is France’s Kobojo, which makes games available on Facebook and on mobile phones. It offers two main games in five languages: Goobox and Pyramidville. “What Facebook has helped us to do is to go faster, to get users and retain them, to facilitate growth and monetization and retention,” says Frank Tetzlaff, Kojobo’s CEO.

Of course working with a young, dynamic company like Facebook is not always easy. “There is a new feature every month and sometimes twice a month, and it is sometimes hard to be aware of all of these things, but we have to understand how the platform will evolve and to integrate those changes into our games,” says Tetzlaff.

While gaming companies are the highest-profile start-ups on Facebook, other types of young European companies say they are benefiting as well. LOOKK.com, a social software project aiming to change the fashion industry, says two-thirds of its traffic comes from Facebook.

LOOKK.com looks for the next big names in fashion, gathering customer feedback to help designers get better and evaluate which are ready to go to market. Facebook is a natural platform for the service, says co-founder Andreas Klinger. “Our designers have not yet established brand names that people remember so people are mainly pulled in by their friends,” he says.

For Codorniou the lesson for European start-ups is that they should focus on building applications — whether it be games or music or other types of services — on top of the Facebook platform rather than trying to build new technology platforms themselves. It could be the fastest way to go global overnight. Just ask Deezer.

 

 

 

 

 

 

 

 

 

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