Having a niche offers one the opportunity to become known as an expert. The more you do something the better you become at it.
With regard to writers when one hears the name Stephen King they think of horror novels, John Grisham legal novels, J. K. Rowling children's novels ("Harry Potter").
The niche simply rewards loyal readers with what they expect!
Jackie Collins was known for writing novels that deal with Hollywood and sex scandals...etc Her fans would have been very disappointed if she suddenly started writing horror stories or Sci-Fi novels.
We see the same thing happen in the music industry. A pop, rock, or R&B singer most likely could sing Country music.
However if they became massively successful in one genre of music they risk alienating their fans by changing up.
People who love Country music aren't likely to buy their record either as they may feel the artist is not a legitimate Country artist.
Essentially a writer's success usually leads to them being placed in a "niche box". The unknown writer has freedom to explore genres.
Some famous writers have been known to write books under a pseudonym or pen name just to experiment with doing something new or out of their known genre. Success creates one's niche!