Online music giants such as Spotify and Apple Music have missed one important thing: they’re not catering for niche markets. That’s the view of one local entrepreneur, who is selling online music differently. Meet the team at NicheStreem, which plans to take on online music streaming, one targeted market at a time. By MARELISE VAN DER MERWE.
At the beginning of 2015, Catherine Lückhoff – like many an entrepreneur before her – had a great idea and zero cash. Unlike many entrepreneurs, however, she managed to get $250,000 in funding within five days. By March, the company was up and running.
“We had done an enormous amount of legwork,” she says. “We already had a fully committed team, and we had done so much homework.” Plus, she adds, the investors – not all of whom were equally wealthy (two were teachers) – already had an apparently rock-steady faith in the legitimacy of the project.
“I said ‘But you’re teachers! I don’t think you can put in this money!’” says Lückhoff. “But they said, ‘No, we believe in you’. And they did. That kind of thing keeps you really honest.”
The project is NicheStreem – a new local music-streaming service that will cater for multiple niche markets rather than one large one.
“We’ve effectively built one platform that can be replicated for various audiences,” explains Lückhoff. “As things stand, if you’re a real fan, you land on a music streaming page and you don’t feel at home. We’re going to change that.”
The first market NicheStreem is aiming to conquer, not entirely unsurprisingly, is the Afrikaans music market. It’s a winning formula, and if you have any doubts, just remind yourself that Steve Hofmeyr has been the country’s best-selling artist in many a year. There are 7-million native Afrikaans speakers in the country. Some 58% of domestic music sales are in Afrikaans, and the Afrikaans is Groot music festival sold 90,000 tickets in the space of six hours after posting just two tweets.
NicheStreem’s first product app will be called Liedjie, and it will launch in September. The Android version has just been completed and the iPhone version is being tested. After that, NicheStreem will be able to replicate the technology for other markets, with a focus on emerging markets.
Lückhoff first got the idea when she was at a conference. “I thought music streaming was broken and decided to start a niche version,” she says. Later, browsing online, she realised the domain name Liedjie.com was not yet taken and bought it. “I couldn’t believe it wasn’t taken,” she says.
The magic of Liedjie lies in that it will not lump all Afrikaans music into one homogenous group. “Afrikaans music runs the gambit from Fokofpolisiekar to Karlien van Jaarsveld,” Lückhoff points out. To this end, Liedjie will cater for a host of sub-niches: children’s music, romantic playlists, rock, indie, etc. Playlisting will be one of its key services, with cached playlists for when one is offline or in an area without reception. NicheStreem is in consultation with celebrities and journalists to help put together playlists, sometimes with a given personality’s name attached.
Pirates beware, however: should you not pay your monthly subscription fee, your playlists will be locked. Users will not be able to download and share music.
The subscription fee will be R49,99 per month – “the price of two cappuccinos”, as Lückhoff puts it.
A further change that NicheStreem’s model will introduce to local music is that it will be working not just with record labels, but also with individual artists, giving them greater exposure and perhaps even an incentive to remain independent. NicheStreem is currently in negotiation with “all major record labels”, says Lückhoff, and has also approached around 350 independent artists.
Payment for represented artists remains up to the labels, but for individual artists the NicheStreem model could prove a huge advantage. Spotify, for instance, gives 70% of its revenue to record labels, which then distribute the revenue to artists according to their individual contracts. NicheStreem will similarly allow record labels to pay artists according to their contracts; however, independent artists will be paid exactly what NicheStreem pays the labels. “We aren’t going to penalise them because they are independent,” says Lückhoff.
The service will still be improved in later versions, she says. For instance, the current version does not have a search function, although users can sort and choose favourites, and find tracks alphabetically. A search function will be incorporated into the next version. “For this version we had an extreme focus. We haven’t built the entire kitchen – just the sink for now,” says Lückhoff.
At a later stage, when there are more streams, a local team will be hired for each stream. The marketing and content area will be run by individual teams representing each stream, while the tech product side is managed by NicheStreem. Currently, the company includes heavyweights such as Haddad Viljoen (formerly of M-Net and Aardklop), Johan Jacobs (Mxit) and Jason Norwood-Young (entrepreneur and data journalism advocate – and (disclosure) long-time friend of Daily Maverick).
Lückhoff herself is no lightweight – she was CEO and founder of business development and strategy consultancy HQAfrica, is a Silicon Cape Exco member, headed up business development and marketing for Africa at Bozza.mobi, and was featured in the Mail & Guardian’s 200 Young in 2010.
For now, the plan is to continue raising investments and to get the app – which is ultimately planned for Android, iOS and as a web client – to be ready for launch by September.
“It’s been an amazing learning curve,” says Lückhoff. “I wake up in the middle of the night and ask myself: ‘What have I done?’ There are still many ways it can go belly-up.
“But we had funding for three months, and now it’s been six months – what was essentially a hare-brained idea, and we’re still here.” DM