Can PocketFM be India's Answer to Netflix? - Startup Case Study

00:00 Intro 01:18 Origin Story 05:50 Cracking the Code 07:38 Scaling the Product 11:08 Future Plans This video talks about the remarkable journey of Pocket FM, an Indian company that has pioneered a new entertainment category: audio series. Beginning with an annual revenue of Rs. 1,768 crore in FY25, Pocket FM's success is particularly notable because over 70% of its revenue comes from the US market—a rare feat for an Indian consumer platform. The company's story began in 2014, when co-founder Rohan Nayak sought a solution to the long commute he endured in Delhi. Observing a gap in the audio entertainment market, he realized there was no dedicated platform for listening to long-form stories and series. Many creators were resorting to posting audio content on video platforms like YouTube, often with just a static image, indicating a clear demand for an audio-only service. This insight, coupled with the observation that people were sharing stories through large WhatsApp groups, laid the foundation for Pocket FM. Nayak teamed up with his IIT Kanpur batchmate Nishanth Srinivas and another colleague, Prateek Dixit, to launch the app in 2018. Initially, they faced a classic "chicken-and-egg" problem: a lack of good content meant few users, and a lack of monetization meant creators weren't motivated. Their big break came after securing a seed funding round, which allowed them to experiment. They began collaborating with aspiring authors and web series scriptwriters, creating a win-win scenario that brought quality content to the platform. The COVID-19 pandemic proved to be a game-changer for Pocket FM. With a massive spike in mobile and internet usage, the app saw its downloads skyrocket from 10,000 to 1 crore in just three months, becoming the top app in the "Music & Audio" category on the Google Play Store. To solve the monetization problem in a market where subscription models struggled, the team introduced a pay-per-episode model. They offered the first few episodes of a series for free, with subsequent episodes costing as little as Rs. 9, which viewers could unlock immediately or wait a day for. This model was a huge success, capturing a large user base and attracting investor attention. By mid-2021, the company expanded globally, targeting the US market. The team initially tested the waters by translating popular Hindi series into English and were amazed to find that US users were spending even more time on the app than Indian users—an average of 110 minutes daily. Leveraging this insight, they tailored their strategy for the US, offering a subscription at a competitive price of $1.99, four times cheaper than their main competitor, Audible. This approach paid off, boosting their average revenue per user (ARPU) to Rs. 3,500 in the US, compared to Rs. 1,000 in India. This international revenue, which now accounts for 70% of the company's total, became its primary growth engine. Pocket FM's success in the US, particularly with shows like Insta Millionaire, which earned over Rs. 100 crore, proved that their new content vertical could compete with traditional entertainment forms. With over 2,000 exclusive audio series and 400,000 episodes, the company has created a new entertainment medium that allows for long-duration consumption, which is not possible with video content. Looking ahead, Pocket FM aims to become a global entertainment giant, potentially expanding into comics with its new app, Pocket Toons, and even video content. The company's impressive financial growth—with revenue jumping from Rs. 150 crore in FY23 to Rs. 1,768 crore in FY25—underscores its hypergrowth phase. The journey of Pocket FM stands as a valuable lesson for other Indian startups: to achieve massive scale, it's essential to successfully capture high-spending international markets. Disclaimer: Zero1 by Zerodha financially supports creators and storytellers through its network. The views and opinions in this video are solely those of the creator and are not endorsed by Zero1. Connect with us: Twitter: https://twitter.com/bwmillionaires/ Instagram: https://www.instagram.com/backstagewithmillionaires/ Podcast: https://open.spotify.com/show/5rGPalovc6AKsfbOyjh32p