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Starting in 1984, some of these DJs, inspired by Jesse Saunders' success with "On and On", tried their hand at producing and releasing original compositions. These compositions used newly affordable electronic instruments to emulate not just Saunders' song, but the edited, enhanced styles of disco and other dance music they already favored. These homegrown productions were played on Chicago-area radio and in local discothèques catering mainly to African-American and gay audiences. By 1985, although the exact origins of the term are debated, "house music" encompassed these locally produced recordings. Subgenres of house, including deep house and acid house, quickly emerged and gained traction.

what type of audience was early disco and dance catered to?
African-American and gay audiences