Pocket FM pulls the plug on Pocket TV as rivals pile into microdrama

Pocket FM is cutting its losses on video. The audio entertainment startup is winding down Pocket TV, its microdrama vertical, sharpening its focus on audio dramas and overseas markets as it edges towards a public listing, according to at least four people aware of the development.

The retreat lands at an awkward moment. Short, vertical video dramas have become one of the hottest bets in India’s consumer internet market, and Pocket FM’s rivals are leaning in rather than backing off. Kuku Technologies and Mohalla Tech, the parent of ShareChat and Moj, are both doubling down on the format, even as investors grow wary of content-led businesses still struggling to prove they can retain users and turn a profit.

Kuku Technologies, parent of Kuku FM and Kuku TV, has confidentially filed draft papers with the Securities and Exchange Board of India for a Rs 3,500-crore initial public offering, targeting a valuation of around Rs 15,000 crore. Mohalla Tech is eyeing its own listing within 12 to 18 months, according to cofounder and chief executive Ankush Sachdeva.

One person familiar with Pocket FM’s thinking put the logic bluntly: the company is going back to what it understands best, audio dramas and overseas markets, because video is a different muscle altogether. It demands fresh content investment, production capability, casting, localisation and an operating rhythm the company has not built.

The closure also tracks a broader pivot towards profitability ahead of a potential listing. ET reported on 17th June that Pocket FM had begun discussions to shift its holding structure back to India for a domestic listing, even as it remains in the market for fresh private capital, and faces hard questions about its strategy.

A second person close to the company said the move frees Pocket FM to focus on audio, where it already has a content library and a working monetisation model, rather than continuing to bankroll a video arm that needs constant fresh production.

Confirming the move, a spokesperson for Pocket FM said Pocket TV was launched as a beta product to explore the emerging microdrama category and was never a material contributor to the business. Product experiments get evaluated periodically for performance and strategic fit, the spokesperson said, and this was part of that normal process. The company’s core focus, they added, remains building the world’s leading audio entertainment platform, with audio still accounting for the overwhelming majority of the business.

The episode has sharpened a wider debate over content versus distribution in microdrama. Pocket TV and Kuku TV sit closer to Netflix-style operations, producing and distributing professionally made shows. Mohalla Tech’s Quick TV follows a similar model, but the company’s bigger bet remains Moj, a distribution-heavy short-video platform closer in spirit to YouTube Shorts or Instagram Reels, according to industry executives.

That distinction matters more than it might sound. Investors generally rate distribution-led platforms as the stronger businesses, thanks to their network effects, user data and repeat engagement. One industry executive put it plainly: investors are not just looking at content anymore, they are looking at distribution, repeat usage, customer acquisition cost, and whether users return without constant marketing spend.

The numbers explain the rush. A Kotak Institutional Equities note last year said Kuku TV had crossed 100 million app downloads in its first year, with several shows topping 100 million views apiece. Kuku’s management has told analysts the company has around 10 million active paying users across its platforms and shoots more than 150 live-action productions a month. Kuku FM’s revenue rose 175 per cent in FY25 to Rs 241.5 crore, though losses widened 59 per cent to Rs 152.6 crore on heavier ad spending. Parent company Pocket Entertainment reported Rs 1,768 crore in FY25 revenue, up 68 per cent, without disclosing profit or loss.

Mohalla Tech expects to close FY26 with around Rs 1,000 crore in revenue, up nearly 39 per cent from Rs 720 crore in FY25, while slashing annual cash burn to about Rs 120 crore from roughly Rs 240 crore previously, Sachdeva said. The company now logs around 600 million episodes watched daily across Quick TV and Moj combined.

Artificial intelligence is quietly rewriting the economics of the category, cutting production time and costs and making it far easier to churn out content for tier-2 and tier-3 audiences. But it has also lowered the barrier to entry, triggering a flood of new apps, some of them leaning on racy or regulatory grey-zone content to grab attention.

The harder question is where the money actually is. For established players, the challenge has shifted from making content to keeping and monetising users once the initial novelty wears off. Unlike audio, where Pocket FM already had a ready catalogue, video demands a constant drip of new shows just to stay relevant. As one executive summed it up, in microdrama, content supply is retention, because users can binge through a library in days.

Anurag Ramdasan, partner at 3one4 Capital, reckons the category is generating $1 million to $1.5 million a year in subscription revenue today, still modest by the standards of the hype around it. Large catalogues pull users in, he said, but user acquisition across the industry remains overwhelmingly ad-led, and the players who crack a cheaper distribution model will always have the edge. Kotak’s note flagged content exhaustion as a genuine risk, warning that platforms will need to keep adding shows and features just to stop users churning out the back door.

For Pocket FM, the bet now is narrower and, on paper, safer: double down on audio dramas and overseas monetisation, and let the microdrama land-grab play out without it. For Kuku and Mohalla Tech, the opposite is true, microdrama is no longer a side bet, it is the centrepiece of their public-market pitch. India’s streaming wars have just picked their next battlefield, and not everyone is staying to fight.