The shape of non-music streaming mkt: OTT audiences tune in to spoken word

Insta Millionaire is a trite, albeit gripping tale of a young man’s rags-to-riches story. Along with Love Contract, Shoorveer and others, it is among the top grossing shows on Pocket FM. Last year, Pocket FM, an audio OTT (over-the-top) clocked 80 million unique listeners, a bulk of them from tier-II Indian cities and from the US. On an average, people spent 110 minutes a day listening to drama, sci-fi, horror or mythological series while working, before going to bed or driving. And they paid only for what they heard. Pocket FM has raised $109.5 million through debt and equity in multiple rounds since it was set up in 2018. Its annualised revenue rate, or ARR, which is a projection of annual revenue based on current monthly revenue, was $25 million (Rs. 202 crore) in 2022. It should hit $100 million (Rs. 820 crore) ARR in a couple of months, says Rohan Nayak, co-founder, Pocket FM.

Welcome to the world of spoken word streaming.

While we have been busy with video and music streaming, a not-so-silent boom has been underway in the spoken word on OTT. Pocket FM, Audible and Spotify are among the handful of firms investing in this market.

Last year, Indians paid over Rs. 1,000 crore to listen to (audio) books, drama series and political discussions among other things, going by data from London-based research firm Omdia. That is about half of the Rs. 2,200 crore music earned in both advertising and subscription revenue in 2022, according to data from the Ficci-EY report. Of the 510-plus million Indians online, about 200 million listen to streaming music and are potential or current users of the spoken word on OTT.

“Last year, we saw a 39 per cent increase in listenership from paid members,” says Shailesh Sawlani, country manager, India, Audible. At an estimated worldwide revenue of over $1 billion, the Amazon group company is one of the largest players in the $7.5-billion global streaming (spoken) audio market.

Audio books are the biggest part of this at over $5.5 billion in revenues globally, says Dom Tait, research director (games, music, audio, consumer platforms and AI) at Omdia. Much of this is through subscription. At second spot is “podcasts, which did very well during the pandemic. In 2022, podcast advertising globally was at $2.2 billion”, says Georgina Howes, principal consultant, Omdia. Fiction, drama series etc. is nascent. However, that is where the action is likely to shift, thinks Tait.

The shape of streaming audio

“I used to listen to audio books and podcasts for 15 hours a week on my commute from Noida to Gurugram. But eventually I wanted entertainment,” says Nayak, who was earlier with Paytm. That is how he decided to launch something that offered drama on audio in 2018.

It was a chicken-and-egg situation. “There was nothing available so there was no content. We figured out the content, the format, the creators, and decided that episodic audio series was the right format,” says Nayak.

And it had to be long form because the “use cases are long — during exercise, just before bedtime to avoid screen, while doing your chores or driving”, says Nayak. It took some time to get writers, voice actors and create an ecosystem that could deliver lots of audio episodes. But it worked. From 30 minutes a day in 2020, the time spent on Pocket FM shot up to 110 minutes in 2022.

What brought the revenue in was a pricing model based on micropayments instead of subscription. Pocket FM users buy coins on the platform against a diverse price cart, which can be utilised to unlock one or multiple episodes of any audio series. It varies across markets. In India it ranges from Rs. 9 and goes up to Rs. 799.

The streaming music business suffers from an over-dependence on advertising. Getting users to pay, from the word go, is arguably the most important thing that the streaming spoken word audio players seem to have cracked.

Audible, too, has a system of credits and free content, which has helped people come into listen to its four lakh odd titles across various languages. From Michelle Obama’s autobiography to Ashneer Grover’s Doglapan to a lot of Charles Dickens work among thousands of titles, its range is huge. “Self-development, personal finance and entrepreneurship are very popular in non-fiction,” says Sawlani.

That brings this to the challenges. Despite the nice numbers, the fact is podcast gets “about five per cent the CPMs (cost per mille/thousand) of radio. Also, there is concern because there is very little control over where an ad would appear”, says Howes.

All streaming firms grapple with questions of brand safety, just like they do with the other challenge audio streamers face, discoverability. “Awareness and the culture of reading is a challenge. If you are aware of a book and read it, listening is a natural extension,” says Sawlani.

Tait reckons that Spotify (which did not comment for this story) has a special challenge with audio because “it is at the mercy of in-app purchases. Therefore, it can’t show you the price. These are the areas of friction that stop people”, thinks Tait.

That is why he sees fiction, which attracts premium subscribers, becoming more important. It also explains why investors such as Tanglin Venture Partners, Times Internet and Tencent and others see potential in Pocket FM. Or why Audible has been focusing so heavily on drama series. In June it launched Marvel’s Wastelanders with a voice cast that includes Saif Ali Khan, Kareena Kapoor Khan and Jaideep Ahlawat. It has collaborated with TVF and Dice Media to adapt their web shows Permanent Roommates and Adulting among others in audio series. Then there is The Sandman, Act 1 (Hindi) and the Bond series with which it hopes to capture a nice slice of the fiction audience, too.

As Sherlock Holmes would say in a book, audio book or a video series, “The game is afoot.”