We recently described home-grown Aussie streaming service Guvera as “an impending disaster“, recording a net loss of over $80 million in 2015 before launching a poorly-received attempt this year at an Initial Public Offering on the Australian Stock Exchange that was eventually blocked by the ASX after mounting criticism.
Now, the storm worsens for everyone involved, as it turns out that the beleaguered service owes Australian musicians, record labels, publishers and collection societies almost $13 million in unpaid royalties.
In the face of a disaster six years in the making, founder Claes Loburg is now attempting to pivot away from Guvera’s label as a streaming service – no doubt a manoeuvre influenced by sharply increased competition in the streaming marketplace.
“We’re a platform for brands,” claims Loburg, in an interview with The Music Network. “We’re not a music streaming subscription business – we’re a different business model. We’ve realised that ourselves and are changing our focus completely.
“The simplest way to explain our difference; Guvera is a tool for advertisers to curate entertainment and engage audiences. We’re not a music app.
“We started with music; we’re now in works with video, film, games and news,” says Loburg. “We aim to exploit our patents by becoming a new way for audiences to find free entertainment, without being disrupted with ads, and ultimately generating the revenues needed to support the 95% of people that want and expect ‘free’.”
They may have come to these realisations a little too late for the artists owed royalties after their music was streamed on the not-a-music streaming service.
Guvera now claims 10 million users, down from 14 million as it’s been forced to pull out of vital territories like North America. In its largest remaining territory, India, it claims to hold 7 million users.
How many of its overall users are genuinely still active is being kept under wraps, but Loburg touts a branding-based business model “that doesn’t need 100 million users to be valuable to a brand” as the way forward for he and his company.
“We have had to pause our speed of development. We have been injured by losing a few of our territories, but we’re on our way to getting back on track.”
Whether any amount of users or developmental shifts will be able to recover the money currently owed to investors and the Australian music industry remains to be seen.
