How three Indians used AI to build a $400 million content factory

With the assistance of AI technology, this popular audio microdrama platform generates 200,000 hours of user-generated content every month. A sufficient number of breakout hits have emerged from the content, leading the platform to believe that this is the future of the entertainment industry.

In a dystopian world ravaged by alien wars, a bullied schoolboy discovers an ancient book left by his parents, whom he has never met. As it turns out, the book turns him into a vampire. This is only the content of the first 10 minutes of My Vampire System, the most popular audio drama on Pocket FM, which has amassed over 1.5 billion views since its premiere four years ago. The story continues for another 4,192 episodes, with tight plots and nonstop suspense. If you want to listen to all of it, you have to be prepared to pay for it.

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Pocket, this audio entertainment company headquartered in India, makes money almost entirely through microtransactions.

Users can enjoy 30 minutes of free listening per day, after which they have to pay for episodes individually. Theoretically, if users use up their daily quota, they can finish listening to the entire My Vampire System for free, but it will take four years; or they can purchase Pocket's "coins" to unlock episodes, with prices ranging from a few cents to more than 3 US dollars per episode, depending on packages, promotions and the popularity of individual episodes. The platform has no subscription system and no all-you-can-listen option, and some users have to pay hundreds or even thousands of US dollars to finish the whole story. And they do exactly that. Forbes estimates that the total revenue of this drama has reached nearly 90 million US dollars.

Highly addictive, fast-paced short audio content paired with a business model of relatively high per-episode pricing has driven Pocket FM and other microdrama companies to achieve exponential growth in recent years. In 2018, three friends in their mid-20s founded Pocket FM in Bengaluru, India; the company has completed four rounds of financing, raising a total of nearly 200 million US dollars, with investors including leading tech institutions such as Tencent and Lightspeed. The founders were selected to the 2022 Forbes Asia 30 Under 30 list; in 2024, the company was valued at 750 million US dollars (Forbes estimates that the founding team holds a total of about 15%-20% of the company's equity).

Rohan Nayak, co-founder and CEO of Pocket Entertainment, said in an interview with Forbes that the growth at that time was "okay", but the 33-year-old CEO felt the pace was "still too slow". So he came to the conclusion that many microdrama studios have agreed on in recent years: instead of relying on an external network of contracted screenwriters and voice actors, producing content with AI is more efficient and lower-cost. "I was firmly convinced that as long as we went all in on building AI creation tools, we could produce content at an unprecedented speed, and thus drive business growth," Nayak said.

In early 2025, Pocket FM started to automate audio production with AI voices, and opened the writing feedback agent tool to all users, which unlocked the floodgates of user-generated content. Since then, more than 550,000 creators have published works on the platform, attracted by the prospect of making a fortune through creation: creators can get a certain percentage of share from the sales of their works. Nayak said that at least 5 creators on the platform have earned more than 1 million US dollars. In August alone, the duration of newly uploaded content on the platform exceeded 200,000 hours. Admittedly, a large amount of shoddy works are mixed in the massive content, but many potential breakout hits are also bred. Nayak said the user retention rate of the platform has increased by 50%. At present, the number of paying users on the platform has exceeded 2.5 million, and the average daily usage time of users has reached 150 minutes, driving the growth of both microtransaction revenue and advertising revenue. Forbes estimates that Pocket FM's total revenue in the past 12 months is about 400 million US dollars, more than doubling from the previous year. About 30% of that is used to pay app store commissions, and a small portion goes to creator shares.

Nayak said, "I used to always wonder why it was so hard to make a hit drama. Now I don't care about the hit rate anymore. Even if the hit rate of user-generated content is lower than that of professionally produced content, the absolute number of hits can reach more than ten times that of professional content."

For Nayak, the productivity boost brought by AI is just the beginning. In the next two weeks, Pocket FM plans to launch brand new AI creation tools to help creators conceive core ideas and write complete episodes, so that almost everyone can become the "architect" of their own episode series as he puts it. He can't hide his excitement when thinking about the massive amount of new stories that are about to go live.

"More content is always better," Nayak said, "Give me 100,000 high-quality series, and I can deliver 5 billion US dollars in annual recurring revenue (ARR). That's my business logic."

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This idea of creating hits completely strips away the romantic side of creation, but in today's entertainment industry, investors always tend to bet on IP with existing audience base to control risks.

Major Hollywood players have also regarded micro-content as an IP testing ground: Singapore's DramaBox was selected for the Disney Accelerator program in 2025; Fox Entertainment took a stake in Ukrainian company Holywater last autumn; Sony, Paramount's BET channel and Versant all have vertical microdrama projects in production.

Shortly after the Fox investment was announced, Bogdan Nesvit, co-CEO of Holywater, told Forbes in an interview last year, "We have accumulated a massive amount of minute-level user behavior data, all of which can be opened to partners. This data is critical for content decisions, such as what type of movie to develop next. Because microdrama is essentially an IP incubator."

Introducing AI assistance in some links of the production process, or even almost the whole process, is to implement this concept to the extreme. In 2024, Pocket FM's production cost per hour of content was about 2,000 US dollars, which was only a fraction of the multi-million dollar production cost of top-tier movies or series, and even lower than the cost of high-end podcasts or audiobooks, but the company still recorded an operating loss of nearly 20 million US dollars that year. According to the company's data, after terminating contracts with 200 screenwriters and fully shifting to the AI-driven user-generated content model, the production cost per hour of content plummeted to only 30 US dollars. Although the company is still making large-scale reinvestments, expanding its staff size to more than 850 people and opening an office in Los Angeles, Pocket FM has now achieved positive cash flow, with a profit of about 10 million US dollars this year.

If there is any resistance from audiences to such amateur or AI-generated content, that resistance is not reflected in user data at all. Brandan Dennehy, who worked in Hollywood for 20 years and joined Pocket FM in 2022 to lead the setup and operation of the U.S. content business, said that seeing which stories really resonate with audiences has "blown his mind". In fact, the less he applied Hollywood's traditional narrative techniques to the series, the better the works performed. As a result, his team adjusted their mindset and focused on lowering the threshold for users to follow series updates and creating cliffhangers that make people unable to stop watching.

Dennehy left Pocket FM in 2024 and now runs his own microdrama company Atomic Drama. He said, "One of my biggest mindset shifts is — I don't mean to belittle the audience, but a lot of people simply don't care (whether the production techniques are professional or not). As long as the content is delivered directly to users and grabs their attention, all the inherent perceptions of what 'entertainment should be' are thrown out the window."

Video microdrama platforms are extremely popular in the Chinese market, but have always struggled to break into the US market; unlike most of these platforms, Pocket FM generates about 80% of its revenue from the US, and another 12% from Europe. Western audiences may initially resist the "uncanny valley effect" of AI-generated videos, but they are obviously much more receptive to AI-generated audio content.

Dennehy revealed that the company had internal discussions in 2024 about a full shift to the video business — after all, the potential profit space of the video track is much larger, but the founders worried that such a major strategic shift would cause panic among investors. Early live-action video projects performed poorly, and in June this year, Nayak shut down Pocket's video microdrama app Pocket TV, citing low user retention rates and high production costs.

After shutting down Pocket TV, Nayak posted on LinkedIn: "We believe the current video microdrama model is not viable. A large part of the growth in this category today is driven by aggressive customer acquisition spending, deceptive design tactics and auto-renewal mechanisms, which is a game we have no interest in playing. If your business can only be sustained by deliberately raising the barrier to unsubscribing, it means your product has no product-market fit at all, and you are just a platform profiting from marketing arbitrage."

But the attractive profit level of the video business is ultimately hard to resist. Shortly after Pocket TV was shut down, the company quietly launched a brand new video app called Pocket Saga. Nayak said the app's monthly revenue has exceeded 1 million US dollars. He believes that AI technology is now mature enough, and Pocket's IP reserve is deep enough to differentiate itself from competing products. To control costs, the company is currently only adapting its most popular audio series into videos, but he believes that the ultimate success still relies on volume. "We now have 200,000 hours of content, and converting all of it into AI videos is a huge project," he said, "But that day will definitely come."

Some may think that this vision for the future of the entertainment industry is almost as bleak and absurd as the fictional world in My Vampire System, but Nayak is fully convinced of it. He believes that in the near future, Pocket will not be the only platform committed to popularizing story creation.

"Will Netflix's future continue to be a professional content production platform, or a platform where everyone can make movies? My view is that it will move towards the user-generated content model," Nayak said, "If a single-person studio can create an IP worth 100 million US dollars, just imagine what the whole world will look like."

Translated from: https://www.forbes.com/sites/mattcraig/2026/09/10/inside-pocket-fms-400-million-microdrama-content-farm/

Original Title: "More Content Is Always Better": An In-Depth Visit to Pocket FM's $400 Million Content Factory

This article is from the WeChat Official Account "Forbes" (ID: forbes_china), author: Matt Craig; translation: Elaine; proofreading: Lemin, published with authorization from 36Kr.