Kuku FM to diversify beyond audio, eyes overseas markets

Kuku FM co-founder and chief executive Lal Chand Bisu. (LinkedIn)
Kuku FM co-founder and chief executive Lal Chand Bisu. (LinkedIn)

Summary

  • The audio entertainment platform is gearing up to diversify into categories such as comics, videos, animation and text, and launch English content to expand global footprint.

Audio entertainment platform Kuku FM is set to diversify its offerings, venturing into categories such as comics, videos, animation and text, according to co-founder and chief executive Lal Chand Bisu.

While audio continues to be central to the company's long-term strategy, Kuku FM seeks to incorporate other mediums to expand its offerings, he said. "We will introduce additional platforms or integrate other mediums into our platform." 

Initially, the company aims to launch content for text and comics segments over the next few quarters to enhance user experience, allowing them to navigate across formats. 

“Currently 70-80% of our tasks are being done by Generative AI. Since we have exclusive audio content on the platform, we can translate the content into other formats through Generative AI without deploying any additional resources." 

In a competitive landscape, video and text is getting saturated and building a moat around that would be tough for Kuku FM, said Kabir Kochhar, founder and managing partner, Audacity VC. 

“However, comic and animation is a high-engagement and growth medium, and could lend well to the consumption behaviour and patterns of Kuku's existing user base," he added.

In a strategic move to expand its footprint in overseas markets, the Bengaluru-based startup is preparing to launch its English content in the US and the Philippines this month, said Bisu. “We have created native English content, the product is ready, and our plan is to launch in these two countries."

The initiatives come amid heightened activity in India's audio content landscape, primarily dominated by Kuku FM and rival Pocket FM. 

While Kuku raised $25 million in a Series C round in September to fund its expansion plans, Pocket FM secured a $103 million round in March led by Lightspeed Venture to expand its presence in the US, besides launching its services in Europe and Latin America.

In its bid to be a niche player in its new markets, Kuku FM is experimenting with fiction content. Besides, in its efforts to cater to diverse audience preferences, it is considering a pay-per-use model for the targeted geographies, diverging from the subscription model employed in India. Subscriptions in overseas markets maybe added at a later stage, Bisu said.

“If we are able to break the international market, it will be a billion-dollar opportunity, but even if we cannot make it, it is like a multi hundred million opportunity in India. I will only be able to comment on it after 2-3 quarters." 

While Kuku FM's strategy will be to tap higher average revenue per user (ARPU) in overseas markets compared to its Indian user base, the challenge lies in the platform's ability to stand out in a global marketplace, Kochhar said.

“The advantage could be the production of original audio content that resonates with expatriate communities, however, the financial implications of creating such content, along with the associated marketing expenses, is daunting, considering the projected lifetime value (LTV) of these users," he added.

Kuku FM’s revenue had risen from 4.4 crore in FY22 to 41.2 crore in FY23, but losses widened from 52 crore to 117 crore, according to regulatory filings. However, in FY24, the company reduced its burn by 50-60%, while increasing revenue by two-fold, according to Bisu.

The platform, which initially offered only Hindi content, expanded to six regional languages last year. With the introduction of English, the company will intensify its focus on Tier 1 cities, which account for around 30% of its revenue, said Bisu. “We started monetisation in 2021 and ended with 50,000 active subscribers. In 2022, we ended with 1 million, and in 2023 we had 2 million-plus active users."

The company has also increased its annual subscription charges from 399 in 2021 to 899 in 2023.

The ecosystem is facilitating the company's monetization efforts, said Bisu. “With a robust payments ecosystem using UPI, everyone started using scan code for subscriptions. Besides, other platforms also started charging people. So, the perception of free content on the internet changed in India." 

In fact, there are approximately 150 million subscribers paying for premium content on the internet, Bisu added.

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