Immersive audio entertainment: Pocket FM revolutionizes long-form storytelling in India from freemium to global IP powerhouse: Pocket FM’s journey to audio dominance.
In the midst of the overwhelming popularity of social media and short videos, three young engineers took a leap of faith by introducing long-format audio series in India. Despite initial doubts about people’s dwindling attention spans, the concept struck a chord, and Pocket FM, the brainchild of Rohan Nayak, Nishanth KS, and Prateek Dixit, is now generating an impressive $25 million in annualized revenue. With aspirations to be the Netflix of audio over-the-top (OTT) platforms, Pocket FM has adopted a binge-release model, championed by Netflix in the world of video streaming. This approach has proven successful in driving engagement, increasing listenership, and boosting revenue.
The foundation for Pocket FM was laid during Nayak’s lengthy commutes to work when he yearned for engaging audio content beyond music. Recognizing the need for long-format storytelling in Indian languages, Nayak, along with his IIT-Kharagpur classmate Nishanth and their friend Dixit, set out to create a niche in audio entertainment. Leveraging their experience in building and scaling mobile-based content products with companies like Paytm, JioSaavn, Flipkart, and Grofers, the trio developed Pocket FM into a versatile platform offering diverse genres in multiple languages.
Central to Pocket FM’s growth is its unique freemium model, which has helped the platform surpass $25 million in annualized revenue as of October. This represents a significant increase from $2 million in September 2021, with a target of reaching $100 million in annualized revenue next year. The platform currently sees listeners spend an average of over 100 minutes daily, with total monthly audio streaming exceeding four billion minutes. The introduction of micro-payments has been instrumental in achieving tenfold revenue growth during the company’s fourth year of operation, with over 500,000 monthly transactions.
Pocket FM’s growth has been driven by its strategic use of artificial intelligence (AI) and machine learning (ML) technologies. These tools enable personalized content recommendations, content creation, and customized discounts through micro-payments. AI and ML have not only improved user engagement and retention but also resulted in a 16% increase in transacting users and a 10-12% rise in revenue since April 2022. Furthermore, Pocket FM is actively developing generative AI capabilities in natural language processing (NLP), text-to-speech, and image processing to expedite content production and testing. The platform is also enhancing its AI capabilities for automated content moderation and quality assurance.
With availability in Hindi, English, Tamil, Telugu, Kannada, Malayalam, Marathi, and Bengali, Pocket FM offers a wide range of genres, including romance, horror, fantasy, sci-fi, mythology, suspense, and thrillers. Its Tamil series “Vaseegara” alone boasts over 1,700 episodes. Popular titles on the platform include “Ye Rishta Kaisa Hai” with 405 million listens, “Love Contract” with 200 million listens, “Yakshini” with 195 million listens, “Shoorveer” with 129 million listens, and “Secret Affair” with 120 million listens.
Having secured a total of $93.5 million in funding to date, including a $65 million investment led by Goodwater Capital, Tanglin Venture Partners, and Naver in March, Pocket FM has drawn investor attention due to its strong traction and engagement among users. The company’s success in the US market has further validated its global appeal. Investors such as Lightspeed, Tencent, and Times Internet recognize Pocket FM’s potential to become an intellectual property (IP) powerhouse, not only for audio content but also for licensing out IP in other formats like videos and movies. Nayak envisions Pocket FM’s creator platform, Pocket Studios, playing a pivotal role in this expansion and even expresses ambitions of taking the company public via an initial public offering (IPO).
The rise of audio over-the-top (OTT) platforms in India, driven by growing internet and smartphone penetration, has transformed the country into a market with a burgeoning audience for digital media. While several significant players dominate the industry with a focus on music and emerging genres like podcasts, Pocket FM has carved out its niche in long-form storytelling and audio series. The format has gained popularity, with over 50 million listeners and preferences skewed toward romance and thrillers.
Pocket FM’s endeavors extend beyond audio series, as the platform now offers audiobooks and an online reading platform called “Pocket Novel.” In just one year, the reading platform has garnered over 100,000 uploaded novels from the writing community, with users spending an average of 100 minutes daily. The platform has accumulated over 400 million reads during this period, with the most popular novels being adapted into audio series.
Despite the challenges encountered along the path to profitability, Pocket FM remains confident in its high gross margins and low customer acquisition cost (CAC) payback period. Currently, Pocket FM’s payback period is less than 12 months, indicating favorable growth prospects. The company’s focus remains on sustainable and profitable expansion, investing in the growth and nurturing of its content-creator community. With its current growth trajectory, Pocket FM is well on its way to achieving profitability.
In conclusion, Pocket FM has successfully tapped into the demand for long-format audio series in India. With a unique freemium model, AI-driven technologies, and a diverse range of genres and languages, the platform has garnered a significant user base and achieved impressive revenue growth. As it expands its offerings and explores avenues for IP licensing, Pocket FM aims to establish itself as the go-to platform for long-form audio content.