South African startup NicheStreem is beginning beta testing ahead of plans to launch its Afrikaans music streaming service Liedjie in September, which will serve as a proof of concept for other streaming services aimed at niche genres.
Catherine Lückhoff, founder and chief executive officer (CEO) of NicheStreem, told Disrupt Africa the startup had been founded on her belief – obtained while previously working in the music industry, that there is scope for regional music services, especially with Afrikaans in South Africa.
“In my first business many of our clients were focused on the Afrikaans market, and I realised there was something missing with the traditional music services, that if you’re really a fan of a particular type of music and have landed on an all-you-can-eat bouquet they really go for the lowest common denominator,” she said.
“We have very dedicated Afrikaans channels. There are really many cultural music channels and shows.”
The idea is for NicheStreem to curate stream for many genres, with the company aiming to scale and create products for types of music like Nigerian gospel. However, it is starting with Liedjie – which means Afrikaans for “song” – as it looks to prove the concept for the whole idea. An Android app has already been built, while the company is also building on iOS and web.
The idea has proven popular with investors. NicheStreem previously raised angel funding of US$250,000 from local and international investors, and is now in the process of raising another US$350,000, with US$100,000 committed already. This money will be used for paying minimum guarantees to lobals and musicians, marketing, and growing the team.
Lückhoff said the startup will now spend a few months testing its product, and hopes to have had 300 beta testers by the time the app become publicly available in September.
“This is a market that’s not very forgiving, so if you launch you’ve got to make sure you fix all your bugs and that your product really speaks to the market,” she said.
The company plans to use a subscription model, charging a flat ZAR49.99 (US$4) per month for access to content, which initially will be limited to playlists, aimed at types of people, and occasions, such as rugby matches or braais.
“What we’re seeing a lot of people do i having a passive, sit back and listen experience,” Lückhoff said.
“The idea is if you’re having a braai, sitting down for dinner or need some love songs, you can turn on a playlist that speaks to the mood of what you’re doing.”
Afrikaans artists, according to Lückhoff, are not well served by traditional mass market music streaming services, as they cannot compete in content revenue pools. NicheStreem will serve them better.
“Really what we’re offering them is the chance to compete with their peers, and we’re getting them to do their own playlists,” she said.
“We’re creating a home for Afrikaans music and hopefully many other genres.”
Lückhoff rules out using a freemium model, aside from the free two-week trial that will be available to new users, as she doesn’t believe mobile banner adverts work in products such as this. Though NicheStreem could run on a pay-as-you-go model in future, she sees better opportunities in the B2B space.
“We’ve spent quite a lot of money building a robust data analytics platform. I believe there’s a sweet spot between users and artists,” Lückhoff said, adding that big money is being spent on marketing using musicians, and Niche Streem could have an opportunity if brands are trying to reach a particular audience.
The startup is looking at folding all of this into its B2B offerings, allowing brands to sponsor playlists and add push notifications for deals. That said, this type of drilling down has not happened in the music streaming business in Africa thus far, and Lückhoff says the startup still has much to prove.
“Nobody has really gone down at such a granular level as we have. There’s a lot we’re still trying to prove, but hopefully our assumptions are correct,” she said.