Imagine being caught in the hustle and bustle of city life, your daily commute feeling like a never-ending loop. Suddenly, amidst the chaos, you discover a world of captivating stories, waiting to be explored with just a tap of your smartphone. Welcome to the transformative realm of audio series!
In an age where screens clamor for attention and digital fatigue is all too real, audio series are emerging as a beacon of immersive entertainment, offering an escape from the visual overload. With a simple pair of headphones, listeners are transported to realms of imagination, where storytelling reigns supreme.
But what’s driving this audio renaissance globally? Why are new vertical players sprouting in the industry? Beyond the allure of storytelling, it’s the promise of large addressable users and profitability that’s truly captivating. As streaming platforms vie for a slice of the audio pie, they’re not just offering entertainment; they’re pioneering a new era of digital engagement.
In the first part of this 2-part series, we talked about the growth of audio series, the amount of time each user spends, the consumer behaviour and the average amount of time they are spending on consuming the audio series content and also the few key players in this upcoming industry.
In this article, we’ll dive deep into the strategies behind the increasing user base for audio series, exploring how platforms are leveraging innovative monetization models to boost their paid user penetration. This landmark audio series report by Redseer will also help you navigate the total addressable market and other revenue opportunities of the audio series market. We will also talk about the prevailing economies of scale and how it is fueling the growth of this nascent industry.
The Audio Series Phenomenon: Post Product Market Fit
In recent years, the Indian entertainment landscape has undergone a significant transformation, with the emergence of audio series as a compelling and immersive form of content consumption. With more that 80% of audio series users being transactors or mature internet users, audio series now accounts for ~50% of total M&E spends for users who pay for audio series, indicating high monetization potential. It’s crucial to understand the dynamics driving this evolution, so our Redseer industry expert, Mukesh Kumar dives into the key growth factors contributing to quick adoption and success of Audio Series.
Increasing Monthly active users
One of the most striking aspects of the audio series phenomenon is its ability to attract a diverse audience, including both traditional media consumers and digital natives. As an easy to consume platform, audio series are quickly gaining new monthly active users, and is set to capture a larger part of the media and entertainment pie. Paid user penetration in Audio Series is catching up fast with other entertainment formats in places like India. Even though it’s still a nascent industry with only 1-2 years since it launched, it has already captured an audience base at par with other mature video streaming and OTT platforms, with 10-11% of them being paid users.
Rising Disposable Income leads to Higher Paid User Acquisition
Micropayments have been a game-changer, with more than 80% of users opting for bite-sized payment packs to access their favorite content, rather than shelling out for the whole library. This model not only makes payments more frequent but also keeps users hooked with its affordability. And guess what? Combined with innovative pricing models and high user engagement, Audio Series are holding their own when it comes to average revenue per paying user (ARPPU), matching or even surpassing other formats like video streaming in the US and audio streaming in India. ARPPU of a pay-per-content for audio series is 25% higher than an annual subscription, as users continue to spend on pay-per-content because of the sticky nature of the Audio Series reflecting its high engagement.
Plus, as users get more comfortable with the platform, we’re seeing a demand for longer-term subscriptions from the mature users, which are climbing from 5% to over 13% within just two years of platform usage. But wait, there’s more – subscription/pay per view models account for over 90% of the revenue generated by Audio Series, even though paid users comprise only 10% of the user base, thanks to the high-quality relatable content in an increasingly visually overloaded digital world.
Total Addressable Market
The TAM for audio series is vast and rapidly expanding as it represents a lucrative market opportunity for content creators and platforms alike. When we look at the big picture, we’re talking about a whopping 1.3 billion potential users worldwide who are tuning into audio series. That’s a huge market opportunity, that’s up for grabs.
Now, let’s zoom in on India for a sec. Almost 27% of this 1.3Bn of this total addressable users come from India alone in 2023. And it’s only going to get bigger! Talk about growth! As digital infrastructure continues to improve and disposable incomes rise, the total addressable user base (TAM) for audio series is poised to grow exponentially in the coming years.
Unit Economics at scale
With increasing demand and engagement in the audio series market, supply is quickly catching up as well. Audio Series is fast becoming a lucrative vertical for budding content creators. Since creator visibility and selection process are more democratic compared to other formats, the supply is predominantly driven by the creator community. Creators can reach a large market easily with zero or minimal costs, unlike entertainment formats such as OTT Video, where high reach comes with escalated costs. This lets economies of scale kick in and work their magic.
Plus, Audio Series platforms are tapping into the awesome power of the creator community, which means they’re raking in a whopping 70% of contribution margin for every hour of content created! And the best part? With more and more folks jumping on the Audio Series bandwagon and finding clever ways to make money from their creations, those profit margins are only going to climb higher.
As things scale up, we’re looking at some amplification in both contribution margins and revenues by 2027. And as users spend more time soaking up content and content prices go up, our revenue just keeps on climbing! It’s a win-win situation all around.
Market Outlook and Way Forward
With the fast evolving Audio Series Market growth, there’s a few key strategies in play. First up, we’ve got content monetization, where platforms charge users directly for their content. But here’s the thing – pricing and flexible payment options are key areas for improvement, so we’re seeing some positive tweaks in this space. Then there’s advertisements, which are a goldmine for platforms with attractive, digitally savvy audiences. But the game is evolving, with a shift towards non-disruptive advertising to keep users engaged. As for content licensing, platforms are eyeing up opportunities to license their popular originals to other platforms, bringing in some sweet revenue. And let’s not forget about dynamic pricing and innovative subscription models, which are shaking things up and boosting revenue per user. It’s all about finding new ways to make money while keeping users engaged and happy!
To summarize, the rise of audio series as a burgeoning longform entertainment category in India is transforming the media landscape, offering a wealth of growth prospects and avenues for innovation. Armed with Redseer’s insights, businesses can navigate the audio series market with precision, positioning themselves to capitalize on the abundant opportunities that lie within the realm of audio series.
And as we peer into the future, the scope of growth is boundless. With India’s rising smartphone penetration, internet connectivity, and insatiable appetite for fresh content, the Total Addressable Market (TAM) for audio series is primed for exponential expansion. From urban millennials craving on-the-go entertainment to rural audiences hungry for vernacular stories, the possibilities are endless.
So, grab your headphones and join us on this auditory odyssey as we unravel the mysteries of India’s audio series landscape, where every listen is a step closer to unlocking the vast potential of this dynamic entertainment medium.
Need more insights into the Audio Series industry’s growth? Talk to our Industry Expert – Mukesh Kumar today. And for more such insights, subscribe to our newsletter to stay ahead of all industry trends.
