11 Feb 2018
3 min read
Yonder Music is a mobile-only digital music platform launched by Ncell in 2017. It is a music-streaming app that gives its users free access to 20 million Nepali and international songs. This app is exclusively provided to Ncell users, who can access its library free of commercials and subscription fees.
Yonder Music operates in six countries, all of them in South-East Asia. Its global office is located in New York, from where it conducts its overall operation. And its head office for Asia is based in Kuala Lumpur, Malaysia.
In this Biz Wiz interview, Adrian Burton, Yonder Asia’s Executive Vice President talks with Samrat Singh Silwal and shares the story of Yonder and how it plans to transform on-demand music-streaming services in Nepal.
How Yonder works
We license Nepali content from eight direct record labels, such as Music Nepal and Buddha Subba, Bollywood content from T-Series and international content from Universal Music and Sony. We basically license them to be distributed on a digital platform. We pay for the material, which means that international artists, as well as local artists, are paid. There have been several occasions where local artists were not paid for their music, and we want to change that culture. In our app, every song is licensed so the artists get their due. This is important as music revenue is coming back into the market. So, once we have that music content, we have the application on Android and iOS as the delivery mechanisms. If you are an Ncell user with an internet connection, you are free to use this app.
The process of licensing and acquiring music
This process is done by the Head of Licensing and they are spread over different parts of the world. The process of licensing and acquiring music is straightforward with the major labels; we do territory agreements with them. When we are dealing with the local labels though, we source, find and negotiate with them. Once we are in a particular market, we pick the labels and approach them. After negotiating with these local labels, based on the duration of the contract and the popularity of the content, we work out a commercial arrangement and decide on a revenue guarantee. This is how we come to an agreement and are able to distribute the content.
Our partners, the mobile network operators, pay the license fee for every user and then we distribute the music through our content partners. License fees come directly from the mobile-network operator and we distribute them through Yonder. We don’t get our revenue from the market but from our partner, as they provide the license fee on behalf of the user. The key selling point for us is that we provide an ad-free service. Also, we do not have a subscription fee.
On partnering with mobile-network operators
The reason behind partnering with network operators is that most people do not want to pay for music. These mobile-network operators see value in music and music streaming, so they utilise music as a reward for customer retention and loyalty. They are happy to pay the license fees on behalf of the user. They see music as a significant part of the digital platform and how it could increase their customer base.
These network operators monitor their average revenue per user (ARPU) and when customers use Yonder, it increases their ARPU. When people get an app such as Yonder for free, there is a high possibility that the customers will stick with the network. It will also increase data usage.
We wanted to be the first music streaming company to enter the market. Before us, nobody had come in and done a localised approach in music streaming. We realised that the Nepali market was untapped and that the already existing platforms weren’t exactly paying for the content. We can proudly say that we have pioneered music in the Nepali market. For us, it presents a great opportunity to work with Ncell, who are the clear market leaders. The majority of the users are millennials, which enticed us to enter this market. As millennials make for the most number of consumers of music, this was a clear opportunity for us.
Localisation of the brand
We are in the process of exploring some strategic partnership opportunities in terms of creating video content and finding local distribution partners. Currently, we provide licensed content, but we are also focusing on creating original content. It is necessary to align our brand with the normalised perceptions of the target market. At present, we are closely working with Nagma Shrestha, our brand ambassador.
Challenges in the local market
When we started out last May, our model was basically an open-access one. So, we opened it up to every network operator to increase the traffic. But after a period of time, our services were only provided to Ncell customers. We lost a large number of our users. This transition strategy did not pan out well, and it was quite difficult for us. Over the course of the last few months, we felt that we lacked consistent brand presence in the market. And with our association with Nagma Shrestha, we are going to fix this issue by making a brand presence here.
Yonder vs Spotify
Spotify and Apple Music, at the core, are paid services. Their users need to pay for the service and the accessibility. And they do contain adverts. We cannot compare Yonder with these giants: What we do differently is that we go into a market with a very localised approach. We set up offices and hire people, thereby creating jobs in the local market. We form exclusive partnerships with local telecommunications companies while Spotify and Apple Music do not do that. And through us, people do not have to go through the trouble of acquiring songs, as Yonder provides 20 million songs for Ncell users. We are focusing on the mass market by making Yonder available, accessible and affordable to our consumers.
Potential in the Nepali market
The Nepali market is brimming with potential, and there are several opportunities here in terms of digital services, and not just for music. The millennial market is hungry and they are high consumers of social media. The market for music is still untapped and there are artists who haven’t had the chance to sign with a major label. We are working to give a platform to any aspiring artists by distributing their music and helping them earn through Yonder.
Extending Yonder’s reach
We need to make people aware of our product. To do so, our telecom partner, Ncell, will play a huge role. Ncell is working towards increasing their reach in Nepal, and this in turn will help us grow. Communicating the perks of Yonder with the help of educational materials and social media will certainly push this product in the market.