17 June 2016

South Africa: Nichestreem's Liedje.com Pay-for Music Channel Has Attracted 150,000 Streams and Will Do Deal With a Local Telco

Digital Content Africa carried a pre-launch story on NicheStreem in the autumn of last before its launch in December 2015. It's now been operating for six months so it seemed like a good moment to catch up on progress with its founder Catherine Luckhoff.

The launch of NicheStreem was a slow burn. Luckhoff registered the name in 2013 and completed an angel round of US$250,000 in January 2015. With some money in place, a team of nine started full time in March 2015. The first track was available in June 2015 and it spent the spring and summer period finalizing licensing deals.

The best way to understand what it's setting out to do is to see NicheStreem as the holding company which runs a series of targeted, genre music channels. The first of these is Liedjie.com, a channel for all music Afrikaans, which is available on the web, Android and iOS at the end of this month. It also has a widget for Naspers' WeChat platform.

It now has 12,000 Afrikaans music tracks:"These are Afrikaans music tracks that have never been digitized before. It's back catalogue and the labels are digitizing it on our behalf." There are 700 human curated playlists and there have been 150,000 streams:"The top user has listened to 2,500 minutes of content and was born in 1946," she laughs. Active users log in twice a day.

The service is hosted on Amazon Web Services and "we use their elastic services" to take up or down the bandwidth required driven by demand:"We don't focus on the lowest common denominator and we're looking to create real-time personal recommendations for users."

After an initial trial period, it's a pay-for service and you get "all you can eat" for US$3.25 a month. You can also cache tracks offline. The trial period is two weeks but if you give your credit card details upfront then you get a four-week trial period.

In order to keep building the reach of the brand, it's looking at doing a deal shortly with a local telco for a zero-rated service. It is also chasing relationships with media platforms including Media24 where the service would be integrated into their platform.:"They own most of the Afrikaans media and it makes sense for their digital strategy. Also WeChat bought over 45,000 subscriber months from us and are using it to market their platform to 15,000 users who get 3 months free from us."

It want to roll out four more streaming channels over the next 12 months: 2 of their own niche channels (Nigerian gospel and Brazilian Sertanejo) and two white label channels (one with a local telco).

"All music streaming services are currently reporting heavy losses. All offer the same features. Artists get 70% of the revenues but still don't make money. Only a tiny percentage of the music on these platforms is being listened to. If we can lower the overheads, we will breakeven with 58,000 users." The artists actually share their 70% with the record label who get 20%.

It is looking at other streams of income including sponsorship (say from a label offering money off) and also ticketing for artists who have tours:"We think our transparency is a big feature. We will give data back to artists (so they can plan tour venues) and ensure artists get paid."

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