KuKu FM Business Model - GrowthX Deep Dive

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How was KuKu FM founded?

In 2018, three IIT Jodhpur graduates—Lal Chand Bisu, Vinod Meena, and Vikas Goyal—launched KukuFM after realizing the audio content gap for India’s regional language speakers.

Coming from Hindi-speaking households, they loved podcasts but saw that most of the content on platforms like Spotify and Gaana was in English or Hindi, leaving Bharat's Tier 2, 3, and 4 users behind.

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Their key insight was that 30% of people’s time is spent off-screen—driving, cooking, or working—where audio is ideal for passive consumption. This led them to believe that audio wasn’t just an entertainment tool, but also a powerful way to distribute educational content.

Yet, instead of just copying western style podcasts (which didn’t resonate with Indian audiences), they quickly learned they needed to focus on audio storytelling—a format India already loved through its deep-rooted culture of soap operas and Bollywood.

This shift became the starting point for Kuku FM: building regional-language-first audio content to serve a massive underserved audience that was not only new to audio but, in many cases, new to the internet itself. 💫

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Journey

When KuKu FM launched with podcasts, they quickly realised it wasn’t working. Their Bharat users didn’t care for the talk-show format; they craved stories, drama, and educational audio.

But what was the key insight here? While they could attract users with entertainment content, retaining them was a challenge.

Many users left the platform once their series ended. But the founders realized that first-time internet users (22% of KukuFM's paid users were paying for software for the first time!) had evolving needs: they first came for short-form entertainment, but soon sought long-term educational value.

By doubling down on self-help, personal finance, and career content, they tapped into Bharat’s desire for off-screen, knowledge-driven audio consumption.

Today, 90% of content consumed on KukuFM is self-help or educational, proving that users want value beyond just entertainment.

Regional expansion played a massive role in their growth. When KukuFM added Tamil, Telugu, Kannada, and Malayalam content, they saw 60% monthly growth in these languages—double the growth rate of Hindi.

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Currently, KuKu FM:

Has generated ₹48.8 crore in revenue.

Grew its active paid subscriber base 4X in the last 12 months to reach 2.68 million.

Has over 40,000 content pieces and 50,000 creators, with 60% female creators.

Sees 70% of its users coming from Tier 2 cities and beyond.

Achieves a 11% conversion rate from downloaded users to paid subscribers, well above the global average of 3-5%.

Maintains an ARPU of ₹600 with a CAC of ₹300, ensuring efficient customer acquisition.

Kuku FM’s MOAT

Cracking the Regional Code 🗣️

While other platforms stuck to Hindi and English, Kuku FM bet big on Tamil, Telugu, Malayalam, and Kannada.

This move was more about making content that connects with local cultures.

The way they achieved this was by going beyond surface-level translations and creating content that feels native. This laser focus helped them rack up 60% month-on-month growth in these regions. While others saw these languages as just “extra features,” Kuku FM turned them into their growth engine.

User-Generated Content 🛠️

Building a platform is one thing, but scaling content without sacrificing quality is where things gets tricky. Kuku FM initially hit roadblocks with user-generated content (UGC)—quality was all over the place. But then, they flipped the script.

Now they’ve got a 30,000 creators, and the best part is that 60% of them are women, bringing unique perspectives to the platform.

Kuku FM’s team curates the content, ensuring it’s top-notch before it goes live. This model keeps costs low, while flooding the platform with fresh, localized content that can’t be found anywhere else.

The Bharat Blueprint 🛤️

Kuku FM has cracked the code on what Bharat—that’s India beyond the big metros—really wants.

They understand that first-time internet users start with entertainment but quickly look for more value-driven content.

Kuku FM solved for this need with self-improvement, career-focused, and knowledge-based content. This makes up 90% of their content consumed.

Focus on Subscription 💰

Here’s where Kuku FM really stands out. Instead of going down the advertising rabbit hole like everyone else, they focused on subscriptions.

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Why?

Because they know their audience will pay for quality. With 2 million paid users already, Kuku FM has barely scratched the surface—only 11% of their users are paying subscribers, compared to a global average of 3-5%.

That’s a massive opportunity just waiting to be tapped. Their smart pricing—spending ₹300 to acquire a customer who then pays ₹600 annually—ensures they’re not just scaling fast; they’re doing it profitably.

Audio First Content 🎙️

Let’s be real: converting books into audio is great, but Kuku FM saw the future differently.

They’re all about audio-first content—stories, courses, and talks that are built to be listened to from the ground up. Instead of just reading a script, they’re crafting immersive experiences with sound designed for your ears.

Here’s where they win big: half of their library is exclusive. That means if you want the good stuff, you’re coming to Kuku FM, not Audible or Spotify.

Market Overview

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The forecasted size of the Indian audio over-the-top (OTT) market was projected to be $0.6 billion in FY 2021, with a number set to more than double to $1.1 billion by 2025 and reach $2.5 billion by 2030.

While the video OTT space struggles to capture the complexities of the Indian audience, the audio OTT industry has hit an inflection point, growing steadily and almost silently, and is making a place for itself in the country's entertainment ecosystem.

1. Audio OTT Market in India

The audio OTT market in India is expanding rapidly, driven by increasing smartphone penetration and cheap internet access.

With over 460 million daily streams in FY23, the market has grown by a factor of 1.6x in just three years. The COVID-19 pandemic accelerated this shift, bringing in more than 50 million new listeners during FY21 and FY22, cutting across all age groups.

While music streaming dominates the overall landscape, with platforms like Spotify and JioSaavn offering massive libraries of 70+ million and 55+ million songs respectively, the non-music segment — which includes audiobooks, podcasts, and audio courses — is growing rapidly.

Platforms like Kuku FM are zeroing in on this non-music space, targeting audiences who are looking for more than just entertainment, focusing instead on knowledge, self-improvement, and long-form storytelling.

2. Podcast and Audiobook Market 🌍

👉🏻India is quickly catching up, becoming the third-largest podcast market in the world, with 81% of listeners tuning into their first podcast only in 2022.

India is considered as the as the "sleeping giant" of the podcast world, with a market that is growing at 34% annually. This expansion is partly due to the ease of content creation and distribution via platforms like Spotify, Hubhopper, and Audible, which have democratised the medium.

👉🏻 Audiobooks are another growth area, and India's audiobook revenues are projected to hit $355 million by 2024, with 416.4 million projected listeners by 2029.

3. Vernacular Market in India 🗣️

In a country of 1.3 billion people, only 125 million speak English, which has traditionally been the language of the internet.

But the real game-changer is the rise of vernacular content, catering to the 540 million regional language speakers who are now online thanks to the rapid growth of rural internet users (growing at 24% annually).

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The potential here is enormous, with the regional language market projected to reach $53 billion.

Kuku FM taps directly into this underserved segment. Plus, the platform’s localised approach is important in a market where 73% of internet users prefer Indian languages for content consumption.

Regional language users also display higher stickiness rates—95% according to KPMG—making them a lucrative demographic to engage deeply.

4. E-Learning and Knowledge-Based Audio 📚

As more consumers seek flexible, on-the-go learning options, audio-based formats are emerging as a highly accessible alternative to text and video-based learning. India’s edtech market is expected to grow to $30 billion by 2030, and audio content that promotes learning is becoming an increasingly popular segment within that.

Audiobooks, audio courses, and education-driven content are gaining traction as more users, particularly from Tier 2 and Tier 3 cities, embrace digital platforms to upskill and improve their knowledge base.

5. Tier 2 & Tier 3 Market

One of Kuku FM’s biggest strengths is its penetration into the Tier 2 and Tier 3 cities with more than 70% of Kuku FM's user base comes from these regions, which represent an under-explored but increasingly significant segment of India's internet economy.

As the rural internet base grows—400 million users and counting—the demand for vernacular content tailored to the tastes and preferences of regional audiences is also surging.

In these areas, consumers are less likely to engage with global or English-centric platforms.

Instead, they look for content that resonates with their local culture, values, and language. Kuku FM’s strategy of creating regional-language originals has paid off, as users are more willing to subscribe to content that feels personally relevant.

6. Revenue Potential and Monetisation 💰

Kuku FM’s pure subscription model stands out in a market where ad-driven revenue dominates.

In FY23, 11% of Kuku FM’s users converted to paid subscribers—far higher than global rate of 3-5%

This conversion rate, driven by a combination of personalised content, regional language options, and micropayment flexibility, gives Kuku FM a strong advantage over competitors like Spotify, which still rely heavily on music streaming and advertising.

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Competitive Landscape

1. Substitues

Kuku FM is primarily a content platform, that competes for the share of users’ time (non-productive time, to be specific). There can be four types of content platforms here:

on-screen

off-screen

entertainment

educational

And the substitutes in this category include: Radio FM, Spotify, Audible, Blinkist, YouTube, Ken etc.

2. Competitors

Indian audio platforms initially used a mix of user-generated content (UGC) and professionally-generated content (PGC) to grow quickly and keep costs low.

However, UGC often compromises quality and brand value. To address this, platforms are shifting focus towards high-quality content creation, featuring celebrities as hosts and narrators.

Platforms like Headphone and Khabri are also enhancing UGC filtering and recommendation engines to ensure better content discovery, offering a blend of both user-driven and professional content while maintaining quality standards.

Here’s a breakdown of the competitive landscape of Kuku FM based on:

A. Points of Parity & Differentiation

Particulars	Kuku FM	Pocket FM	Pratilipi	Audible
Ease of Usage	Medium	Low	High	High
Cost per User	₹99 per month/₹399 per year	₹99 per month/₹799 per year	₹150 per month/₹1500 per year	₹199 per book per month
Languages available	8	8	12	2
No.of hours of content	1,50,000+	1,00,000+	60,00,000+ hours	68,000 + hours

B. Content-type comparison across competitors

Content Type	Kuku FM	Pocket FM	Pratilipi	Audible Suno
Story	Yes	Yes	Yes	Yes
Full Books	Yes	Yes	Yes	Yes
Book Summary	Yes	Yes	Yes	Yes
Course	Yes	No	No	Yes
Podcast	Yes	Yes	Yes	Yes

C. Feature comparison across competitors

Feature Type	Kuku FM	Pocket FM	Pratilipi	Audible Suno
Sleep	Yes	Yes	Yes	No
Notes while reading	Yes	No	No	Yes
Drive mode	Yes	No	No	Yes
Save content	Yes	Yes	Yes	Yes
Create your own list	Yes	Yes	Yes	Yes
Creator profile and tools	Yes	Yes	No	No
Refer	Yes	Yes	Yes	No
App available in multiple languages	Yes	No	Yes	Yes
Goal setting	Yes	No	No	Yes
Badge collection	Yes	No	No	Yes

How does Kuku FM make money?

The way Kuku FM’s makes money is super simple: subscriptions.

Users & businesses pay to unlock access to a massive range of audio content—from self-help books to business insights, personal finance, fitness tips, and even religious teachings.

The app also ventured into workforce upskilling, with audio courses that focus on productivity and time management, which businesses can tap into.

For now, subscriptions are the only revenue stream for KuKu FM.

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Average revenue per user (ARPU) for Kuku FM is about ₹600 per year, giving us an idea of how much each paying subscriber brings in annually.

Cost Levers

1. Marketing & Customer Acquisition

Marketing is Kuku FM’s biggest money pit.

They poured ₹94 crore into marketing and ads in FY23, which is a 3x jump from the previous year. This means 57.3% of their total spending goes into getting the word out and converting users into paying subscribers.

Here’s the good part: Customer Acquisition Cost (CAC) is around ₹300, which is pretty reasonable considering the ARPU is ₹600.

The platform is actually acquiring customers at half of what they make from them annually. Even better, 11% of users who download the app end up subscribing, compared to the global conversion rate of just 3%-5%. Which is a strong sign that once people try the app, they see the value and are willing to pay.

2. Employee Benefits

Kuku FM’s workforce costs went up 2.3X to ₹34 crore in FY23, driven by the need to scale up its tech, content, and business teams.

Out of this, ₹4.98 crore was spent on employee stock options (ESOPs), a non-cash cost to incentivise talent.

As Kuku FM grows, attracting and retaining top talent is going to remain a crucial part of the journey, especially in tech and content creation, which are key to delivering a smooth, engaging experience

3. Content Creation Costs

They spent ₹11 crores on producing and curating audio content, which makes sense since content is the backbone of Kuku FM’s business.

4. IT and Technology Infrastructure

Finally, roughly ₹15 crore went into IT and tech. This includes costs for cloud storage, streaming technology, and the AI that powers Kuku FM’s personalised recommendations.

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Market opportunity

1. Partnering with EdTech for Audio-Based Learning

India’s e-learning market, the second largest globally, is set to grow from $6 billion to $10 billion by 2025.

Kuku FM can tap into this massive opportunity by partnering with EdTech players or offering its own audio-based courses in regional languages. With over $4 billion invested in EdTech and 692 million internet users, India’s mobile learning market is expanding fast, creating a perfect ground for audio-based education.

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Further, with micro-credentialing growing by 50% and recognised by 65% of employers as valid skill indicators, Kuku FM can offer tailored learning that boosts engagement and retention.

Plus, reports that remote learning boosts content absorption by 5x at one-third of the cost, while mobile users see a 43% productivity increase mean that Kuku FM’s focus on vernacular content, combined with EdTech collaborations, could reshape India’s education landscape.

2. Tapping into Mental Health and Wellness Audio Content

The growing mental health awareness in India post-pandemic has opened the door for audio content focused on wellness, meditation, and motivation.

With 85% of individuals in low-income countries lacking access to mental health treatment, India’s underserved regions present an enormous opportunity for vernacular audio content in mental well-being.

Collaborating with mental health professionals to create engaging audio resources can help address the 80.4% treatment gap for common mental disorders. Furthermore, the Mental Healthcare Act of 2017 and National Mental Health Policy underscore the growing importance of accessible care.

Platforms like Kuku FM can cater to this underserved audience by providing audio-based mental health resources in regional languages.

3. Gamification of Audio Content Consumption

Gamifying content with rewards, badges, and listening streaks was said to drive user engagement by up to 60%.

The global gamification market is expected to grow from $10 billion in 2022 to $116.68 billion by 2032, with engagement rates increasing by 15-20%.

Kuku FM could harness this trend by introducing interactive features, enhancing user retention, and increasing average time spent on the platform.

Challenges

1. Audience Engagement

The music segment has engagement down to an art, but non-music content still has to struggle with this.

A murder mystery audiobook can keep a listener hooked for hours— but the same can’t be said for an informational podcast.

Every content type needs a unique strategy to keep listeners hooked. Kuku FM, being a non-music platform, struggles to strike that balance, especially when attention spans are short, and competition is high.

2. Monetisation Vs. Losses

Freemium models are bleeding platforms dry.

Kuku FM, for instance, spent 57% of its total expenditure on advertising, with their unit economics being brutal—₹4.02 spent for every ₹1 earned.

The big question is: how do they scale without burning cash? And with such thin margins, one wrong move could derail their path to profitability. The challenge isn't just about growing users but figuring out how to grow without growing losses.

3. AI dominance

AI's growing presence is a serious threat to Kuku FM and similar platforms.

Sure, AI enhances user experience with curated playlists and recommendations, but it's also capable of creating original content, including audiobooks or podcasts.

This could drastically reduce reliance on human creators, making it cheaper for competitors to flood the market with AI-generated content. For a platform like Kuku FM, which relies on paying creators and delivering fresh content, AI’s rise could make it harder to justify subscription fees or stay relevant.

If users flock to AI-generated free alternatives, Kuku FM's already thin margins could take a massive hit.

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