Rohan Nayak: Sound Money

THE STORY OPENS WITH LAKSHMAN LAL Agarwal, aka Lucky, making a drugstore delivery to a hotel room. And who should open the door but his materialistic girlfriend Dimple. Caught cheating, she nonchalantly dumps the seemingly penniless Lucky and an­nounces she is dating his friend Rahul—the man who placed the order for condoms and tissues and set the ball rolling in the first scene. Lucky, however, is not as unlucky as he appears, for it turns out he is the Agarwal family heir and stands to inherit a for­tune. Will he find happiness and love though? You will have to keep playing episode after episode to find out. Built around a fa­miliar rags-and-riches trope, ‘Insta Millionaire’ is one of the most played titles on Pocket FM, an audio entertainment streaming platform. First launched in the US and later adapted in several Indian languages, the show has been played over a billion times and runs into over a thousand 10-minute-long episodes—a new long format for audio that Pocket FM has pioneered.

In 2018, when Rohan Nayak, an IIT graduate from Delhi who had quit within a year of landing his first job as an invest­ment banker to build content apps for a startup, stumbled on a gap in the burgeoning digital entertainment market, he did not know it was actually a yawning chasm, waiting to be filled with a unique form of escapism. It was a time when the ephemeral thrill of short video was inescapable, but Nayak wanted to create a product in an entirely overlooked content category. “There is a spectrum of video entertainment apps, from YouTube and Instagram to Netflix and Hotstar, for long and short-form content. In audio, audiobooks and podcasts are frankly not entertainment. They are for a focused audience that consumes information and knowledge. The entertain­ment angle was, surprisingly, missing in audio,” says the 32-year-old, at the Pocket FM office located in Koramangala, Bengaluru’s preferred startup neighbourhood. Nayak was obsessive about content, consuming manga, anime, comics and video in equal measure, but a three-hour commute from Gurugram, where he lived, to Noida, where PayTM, which had acquired the short video content startup he was working for, was located, serendipitously made him turn to audio as a category. He was bored but got nauseous when he looked at his phone or tried to read. “I called Nishanth Sreenivas, a college batchmate who worked at Saavn, and we reached out to a mutual friend, Prateek Dixit, who led engineering at Grofers. We were sure there was a product to be built in audio entertainment but we didn’t know what would work.” Over the next two years, they would run nearly 20 iterations, trying everything from short audio clips by popular YouTubers to comedy sketches and storytelling podcasts. “None of these formats was able to drive retention. They were not building a habit. Building stickiness is the biggest problem in any new format; engagement comes easily,” says Nayak. Ahead of Diwali in 2020, after two years on a seed round of $600,000 and no traction whatsoever, the cofounders were clear about a couple of things—that audio was suited to long-form content, and that fiction worked best. “As a last-ditch attempt, we zeroed in on audio series. We knew TV dramas worked in the long-form fiction category, so we thought that if we produced audio series with punchy, fast dialogues and good voice acting, they would work.” They did, and how. User retention shot up to 120 minutes a day and listeners kept coming back for more day after day, playing episodes on their commute, at work, while they cooked and washed dishes, and as a sleep aid in bed. Pocket FM now has over 200 million listeners globally, each spending about 115 minutes a day on the platform, essentially binge-listening to several shows daily. The company closed the last financial year with a global annualised revenue run rate of $150 million, of which the US makes up 70 per cent.

If it was not for his boyish looks, Nayak could be mis­taken for a much older CEO, confident and pragmatic in his demeanour and his decisions. He has clarity about why and how new forms of entertainment managed to click with their target audience and knows that as a category-creator, Pocket FM can set the bar very high. “Every new content category has created a new format. Instagram created the square photo, Twitter [now X] introduced a 140-character limit, and TikTok pioneered the 15-second video. In every case, the format innovation was followed by suitable content creation. Once we had decided on the format, we started look­ing for 500-episode-long content but it was proving very hard to find. We licensed what we could find, incentivised writers to deliver longer-running shows, and created a community of 250,000 writers and even a separate vertical called Pocket Novel where people can self-publish without any intermedi­ary. [It is now one of the largest, and the fastest-growing reading platforms in the world.] Eventually, user-generated content (UGC) will take over, and algorithms will self-select them based on feedback and popularity.” Pocket FM now has over 35,000 audio se­ries—that’s hundreds of thousands of hours—an increasing number of them written by not-professionals. A successful writer can make about $100,000 a year from a single show but Nayak hopes that 2025 will be the year that a UGC show can make over $10 million. “That will be a watershed moment. Many of our shows have made $20 million, $30 million—which is comparable to box-office returns, if you think about it. With UGC shows like Devil se Shaadi and Malang (by Moni Singh) doing well in India, I believe we can pave the way for writers across the world to make a sustainable living from writing shows.” AI integration has enabled users to even self-publish shows on the platform— it is as simple as entering the script, choosing an AI voice and background score and hitting publish. Pocket FM is also working on building an AI tool to automate adap­tation of shows into other languages, with all the relevant cultural nuances.

Nayak believes anime has the best content in the world and is trying to lease out popular shows that have run for years. Where other media buckle under the weight of time, Pocket FM does something extraordinary: it reels you in with a couple of free episodes and dares you to wait, but you inevitably give in, paying a couple of rupees for that next episode, and then the next, until you find that you have been living in that world. Like 10-season TV dramas, these stories fulfil a desire for continuity, for stories that do not simply entertain but ac­company us. They are modern sagas, sprawling and imperfect, coming apart at the seams and then, coming together again, offering the slow burn of immersion or a mythos to return to. In a world where our dopamine receptors fire in rhythm with the flicker of our screens, Pocket FM reaffirms that the joy of listening is a treasure chest waiting to be unlocked. It proves that what people are really looking for are good stories. What makes a story universal is not the setting or the plot twists but the bones beneath it all—the struggle for meaning, the confrontation with death, the longing for connection, the sting of betrayal, the ache of love. These are the things that do not change. Such stories are the backbone of the Pocket FM repertoire, though increasingly, fantasy and science fiction are picking up. “Audio entertainment works because you can find a diverse set of stories. In video, you are constrained by the number of movies that are produced. In audio, the production costs are way lower. Take science fiction shows, for instance. Bollywood won’t make them because they are super expensive and may not fetch a high RoI. To us, it’s all the same,” says Nayak. Pocket FM could one day be a home for stories that Bollywood could not produce. It could feature star productions or celebrity voices—the possibilities are endless. Personally, Nayak is most excited about taking an Indian consumer product global and about creating a new format that can in turn bring new creators to life.

Having raised $103 million earlier this year, Pocket FM is valued at about $750 million, double what it was said to be worth in 2022, and the founders continue to own a significant stake in the company. Nayak says his lifestyle is not lavish and whatever money he makes from Pocket FM will probably be used to build another business in the future. “It has been exciting to figure out most pieces of the business from scratch—how to find stories, market them and monetise them. We tried subscription and tiered subscription models, but then pivoted to micropayment, which was the inflection point for us. Now with UGC, we have a sustainable business model and an engine that can churn out stories without end.” Pocket FM does not just want to be the Netflix of audio dramas—it wants to be the Netflix and the YouTube. “We have allowed Pocket Novel to scale organically so far and we will launch at least one more con­tent format, which we are working on,” Nayak says. “In the long term, we want to be Pocket Entertainment, not just Pocket FM.” Like many of the stories on the platform, the story of Pocket FM is one of growth, of becoming, of chasing dreams in a way that is not rushed but patient—an evolution, not a revolution.

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