Business News Digital

Guvera is the hotdog seller of streaming music, says founder

By Andy Malt | Published on Monday 4 July 2016

Guvera began a PR offensive against the “traditional newspapers” last week, accusing the media of inaccurate reporting about the streaming company. Though, just for the record, the flagging digital firm definitely was blocked from floating on the Australian stock exchange, after which it did put two of its companies into administration.

According to the Sydney Morning Herald, an internal email was circulated last week assuring staff (those who hadn’t already been sacked by the administrators) that the company would “hit back at the recent misreporting of the company in the traditional newspapers”. This PR offensive seems to mainly consist of posting two videos online featuring execs saying that Guvera is great and everything is fine.

“It’s really wild that I’m sitting here making this video”, says founder Claes Loberg in his video. “Over eight years of developing a business with a brand new idea, everybody just focuses on one little thing, trying to draw comparisons that we are like Spotify, we’re like Apple Music, we’re a music subscription service, and does the model stack up or doesn’t the model stack up?”

That doesn’t sound much like just “one little thing”, but let’s hear him out. “We’re such a completely unique beast in what we are. We’re a model targeting the advertising industry. We’re a model that actually allows advertisers to exist in a world where people just click past everything, and we’re a model trying to monetise the 95% of people in the world that get free content”.

“They want free content, they don’t want to pay for a subscription service”, he goes on. “It’s the same people who have been receiving free-to-air television, free-to-air music since the 60s. This isn’t a new model, we’ve just reversed the concept, and what we are is so different to the other players that exist”.

Different, people, so very very different. Then he says that Guvera’s aim is to be “a platform for brands to be useful”, providing “branded entertainment” where the brand is “the curator of content, rather than the disruptor of content”. Which doesn’t sound so different from all the other free-to-access streaming services, though he then clarifies: “I mean, we do stream music, sure. But just the way that Ikea sells hotdogs. They’re not a hotdog company, and we’re not just a streaming company”.

That’s clear then. And now I want a hotdog. Loberg concludes: “In summary, Guvera is a music streaming business”. Wait, what? “But it’s not in subscriptions. It’s in a far bigger market of ‘brand funded’. Music is just the start of what we’ve done. We’re about to introduce more content, more features around social and film and television. We’ve got a long journey ahead, and we’re still as committed on that path today as we were one week ago and eight years ago”.

For anyone still not convinced, Chairman Phil Quartararo then explains why he thinks Guvera is so exciting in one of the most boring two minutes of video I have ever watched. “I left EMI for a reason”, he reveals. “I felt like the record companies were not listening to the consumers. In the retail business, the number one rule is, you listen to your customer, and I felt like the record industry had stopped listening to their customer, so I knew it was time for me to leave running the big companies”.

If he was running those companies, couldn’t he have made them listen to the customer? Oh well, he continues: “The reason Guvera was appealing to me and ultimately where I ended up was that the first order of business was to properly compensate artists for their art, composers for their compositions. And that was attractive to me, and I knew that Claes had a different, better idea of how we could do that and how we should do that and what kind of company could get that done”.

Yeah, the hotdog thing. “Music fans are fans. They’re not consumers only”, he adds. “They’re fans. Which means they’re fanatics. They’re fanatical. They’re driven by passion. We’re not selling widgets. We’re not selling diapers. We’re not on a shelf somewhere at Wal-mart. We are selling something that people care about”.

I thought this was designed for the “95% of people in the world that get free content” though? Does that mean 95% of people are fanatical about music? Oh well. I wouldn’t spend too much time pondering about how the two Guvera men sort of contradict each other. Instead let’s just leave it to Quartararo to contradict himself.

“The number one stakeholder are our shareholders, and they’ve given us a giant vote of confidence by investing with us. It’s our obligation to deliver them a good result. A great result. And the fans expect more, and it’s our job to deliver it. To deliver a different and better product. To deliver something that we’re proud of sending and they’re proud of receiving”.

So, shareholders are number one. Fans number two. Though I’m sure artists and composers were supposed to be in there somewhere.

Despite all this, it does still remain a fact that two of Guvera’s companies were put into administration last month, with 60 people either losing their jobs or being moved to other parts of the group. And a creditors meeting to discuss the AUS$15 million owed by those two companies is now scheduled for 7 Jul.

Administrator Neil Cussen of Deloitte Australia told the Sydney Morning Herald: “Over the course of the next week we will be working with management to see if we can get a proposal that we can talk to the creditor group about in relation to a deed of company arrangement. I don’t have any direct concerns today, but we have been spending [our time] in the subsidiary companies [so] we haven’t had time to turn our thoughts to Guvera Limited at this stage”.

You can see why no one asked Neil to make a video. Meanwhile, the Australian Financial Review reported last week that all was very quiet at Guvera’s Sydney HQ, with apparently no staff in the building. Maybe they were all out getting hotdogs.