Trebel’s 5 million listeners have Gary Mekikian’s daughters to thank for the free-of-charged licensed music service they now enjoy. A decade ago – well before the likes of Spotify were so ubiquitous – Mekikian’s daughters set him a challenge after a scare at their school, where a fellow student accessing an illegal music downloads site was targeted by cyber attackers. He recalls: “They said, “Dad, you’re an engineer, why can’t you solve this problem?’.”
Mekikian got to work and started developing what would become Trebel, which launched formally in 2018. Today, the app offers consumers the opportunity to download their favourite music to play offline. It’s completely free of charge – and completely legal, with Trebel having signed deals with three of the largest record labels in the world in Sony Music, Warner Music Group and Universal Music Group.
Now the company is looking to take its next step, with an ambitious initial public offering that hopes to harness the power of the crowd through a Regulation A offering – a stock issue that is open to the investing public as well as institutional investors. “So many of our subscribers have been in touch asking how they could invest that this route made real sense,” Mekikian says. “They’ve seen the value of services like Spotify grow and they think Trebel could follow.”
To be clear, Mekikian sees its market as completely different to the established streaming services – and a far bigger one. ”Nearly 90% of the world’s 3.5 billion smartphone users do not pay for music,” Mekikian points out. In many cases, it’s because they can’t afford such costs.
Trebel’s business model therefore targets those mobile phone users – essentially all 3.5 billion of them, minus a few hundred million who pay for a streaming service. The company makes its money by selling advertising that is served up to users as they’re browsing for music and as they’re downloading songs to play offline.
Mekikian sees that as a win-win situation for everybody involved. Advertisers are currently getting very few opportunities to put out high-quality content on smartphones, despite the market reach of these devices, so Trebel works well for them. Users unable to pay to stream music can now get it for free. And the music labels benefit too – they, and their artists, earn royalties when Trebel users download their tracks.
“The labels have been very welcoming, because we’re effectively a new revenue stream for the artists,” Mekikian says. “We’re monetising people who have not previously been monetised.”
In fact, that’s not strictly true. Some people have been monetising this audience – just not in a legal way. Mekikian believes Trebel will take many people away from illicit websites that offer pirated music. It’s not credible to think people aren’t going to use these sites to access the music they love, he says, unless you give them an alternative that is free, but legal.
“For many young people in particular, music isn’t something that’s optional – it’s as crucial to them as air and water,” Mekikian says. “Why should the only option for kids who can’t pay be these sinister online operators that may not be safe – and which are definitely not rewarding the artists that listeners love.”
It’s a compelling pitch that appears to be capturing listeners’ imagination. Trebel has started out in North America, targeting the US and, in particular, Mexico, where it has overtaken Spotify as the number one app in Mexico’s Google Play store in the free music category.
Mekikian sees the world’s emerging economies as particularly good options for the company and is now planning launches across South-East Asia, beginning with Indonesia. In many of these markets, smartphone penetration is high, but disposable incomes lag those in advanced economies, limiting the number of people for whom subscription-based music services are an option.
Customer growth has been rapid. Since the launch of the app in its fully-fledged form in 2019, Trebel has picked up around 5 million active users, while continuing to test its model and trial new features. It’s a strong start – but in the context of a global addressable market in the billions, there is plenty of potential for expansion.
“We think we’re ready for our next phase of growth,” Mekikian says – hence the securities issue. He hopes investors from all around the world will become brand ambassadors for Trebel, using its service and evangelising its benefits to their friends and families. “It’s all about getting the word out,” Mekikian says.