SUMMARY
Speaking about Kuku FM’s journey, its cofounder Lal Chand Bisu explained how the company decided to stand out in the crowded space by offering differentiated content
Speaking at Inc42’s The Makers Summit, Bisu said that Kuku FM’s active subscriber base stands at 2.68 Mn, with the audio OTT platform seeing a 4X growth in the last 12 months
Kuku FM, which offers audio content in multiple Indian regional languages, has also expanded to UPSC content and now aims to add upskilling courses and educational content for kids
Despite the audio OTT apps seeing a sharp increase in usage over the last few years in India, most of them are still struggling to get paid subscribers. However, Mumbai-based audio platform Kuku FM has bucked this trend. Riding on its vernacular content, Kuku FM’s active subscriber base stands at 2.68 Mn, with the audio OTT platform seeing a 4X growth in active paid subscribers over the past 12 months.
Founded in 2018 by Lal Chand Bisu, Vikas Goyal and Vinod Kumar Meena, Kuku FM is a non-music audio platform that offers exclusive audio content in categories such as book summaries, audiobooks, courses, motivational speeches, among others.
Kuku FM started with Hindi content and has since added content in seven more regional languages, besides English. The startup currently has over 40,000 content pieces on its platform.
Kuku FM currently has 50,000 creators on the platform, of which 60% are women. The content of a creator is published on the platform only after it has been curated by its team.
Speaking at Inc42’s The Makers Summit 2023, CEO Bisu shared the key strategies that helped the platform attain millions of paid subscribers.
Gathering And Using Customer Insights
Before launching Kuku FM, its founding team spoke to a number of users and creators to understand how they curated audio content and who the consumers of the content were. The team also decided to follow a trial and error method before finalising any content strategy, which gave it the room to experiment and zero in on the winning formula.
Kuku FM initially started with podcast content, but it didn’t work well on the platform. Following this, it looked at user generated content (UGC), which Bisu called ‘a Twitter thread of audio content’. However, the UGC content also received poor response from the audience, following which Kuku FM moved to long-format series content. Episodic content worked well for the platform, and Kuku FM has been providing long-format content since then, Bisu said.
In the audio OTT space, the players largely follow two business models – subscription and advertising. Bisu said that the Kuku FM team talked to some of the big players in the industry such as Gaana to understand the advertising model. This made them realise that the advertising market is very competitive, and hence the platform decided to follow the subscription model to monetise their content.
Following this, Kuku FM sought feedback from its users to understand if they would be willing to pay for the content. Surprisingly, 80% of consumers responded saying they would pay for the content, the cofounder said.
Offering Differentiated Content
The audio OTT market in the country is crowded with the presence of international players as well as homegrown players such as Spotify, YouTube Music, Gaana. However, all these platforms have music content as their primary offering. So, Kuku FM decided to take the non-entertainment content to stand out from the crowd.
“After the internet penetration, everyone wants to grow, everyone wants to learn because they have seen multiple success stories and India is a developing country. Hence, many people are aspirational here. We wanted to be in that segment where people want to learn, aspire to become something, explore new things,” Bisu said.
Non-entertainment content on finance, history, biography, and parenting has the highest presence on Kuku FM. Finance works best on the platform, followed by history, biography and parenting. Moreover, 90% of the available content on Kuku FM is original content, which helps it differentiate in the crowded audio market, Bisu explained.
Betting Big On Vernacular Content
Besides expanding the number of categories on the platform, the startup decided to cash in on the rising penetration of the internet and demand for smaller cities and towns by adding content in various regional languages. Besides Hindi and English, the platform currently has content in seven regional languages – Malayalam, Tamil, Telugu, Kannada, Marathi, Gujarati and Bengali.
Kuku FM claims that around 70% of its users come from Tier 2 cities and beyond. While it is seeing a decent uptick in Malayalam, Tamil, and Telugu languages, the platform still needs to figure out its strategy for other regional languages, Bisu said.
One-size-fits-all approach doesn’t work, Bisu said, adding that Kuku FM is now focusing on customised content curation for each language.
The Way Ahead
Last year, Kuku FM raised $21.8 Mn in its Series B1 funding round, led by Fundamentum Partnership. The platform is backed by investors such as Paramark Venture, KRAFTON, 3one4 Capital, Vertex, among others. It has raised around $46 Mn in funding to date.
Explaining customer acquisition, Bisu said Kuku FM focuses on three channels for it – performance marketing, creator-led marketing on YouTube and organic. While the average revenue per user for Kuku FM is INR 600 per year, it spends no more than INR 300 on customer acquisition cost (CAC), he added.
The audio OTT platform segregates customer acquisition in two buckets – new users, where the CAC is lowest, and renewal of existing customers. The conversion rate from downloaded users to paid subscribers for Kuku FM is 11% as against the global conversion rate of 3%-5%, Bisu claimed.
To further increase its subscriber base, the audio platform now plans to expand its content offerings. While it recently added UPSC content, it is also looking at adding more upskilling courses and educational content for kids, he said.
Kuku FM operates in the overarching music, radio and podcast segment, which as per Statista, is projected to reach a revenue of $1.17 Bn in India by 2023 and $1.34 Bn by 2027.
