In a dystopian world ravaged by alien war, a boy who has been bullied at school discovers an ancient book left by the parents he never knew. It turns him into a vampire. And that’s only the first 10 minutes of My Vampire System, the most popular audio drama on Pocket FM, with more than 1.5 billion plays since it debuted four years ago. The story continues for another 4,192 plot-packed and cliffhanger-filled episodes. But if you want to listen to all of them, you’d better to get out your wallet.
An India-based audio entertainment company, Pocket makes its money almost entirely through microtransactions, charging users on a per-episode basis after an initial 30 minutes free each day. Theoretically, a user could listen to My Vampire System entirely for free, if they used their full allotment every single day for four years straight—or they could purchase Pocket “coins” and unlock episodes costing anywhere from just a few pennies to more than $3 each, depending on packages, promotions and episode demand. With no subscription or all-access options, some users pay several hundred, perhaps even more than a thousand dollars for the complete story. And they have—Forbes estimates the series has grossed nearly $90 million in total.
This business model—addictive, snackable audio content sold at high unit costs—has powered Pocket and other microdrama companies to exponential growth in recent years. Founded in 2018 by three friends in their mid-twenties in Bengaluru, India, Pocket has raised nearly $200 million across four fundraising rounds from investors, including tech heavy hitters Tencent and Lightspeed. They were members of the Forbes Asia 30 Under 30 class of 2022, and reached a valuation of $750 million in 2024 (Forbes estimates the founders retain around 15-20% of the company’s equity).
It was “pretty decent,” Pocket Entertainment cofounder and CEO Rohan Nayak tells Forbes, but the 33-year-old thought the growth was “too slow.” So he came to the same conclusion many microdrama studios have in recent years—content can be made faster and cheaper using AI rather than his network of contract writers and voice actors. “I was really hopeful that maybe if we just bet the house on us building AI creator tools,” Nayak says, “it would help us produce content at unprecedented rate, and that would help grow the business.”
Pocket began automating audio production with AI voices and offered a writing feedback agent to all of its users in early 2025, and the floodgates of user-generated content opened. More than 550,000 people have published to the platform since, lured by the promise of self-made riches—creators negotiate for a small percentage of sales, and Nayak claims Pocket has at least five creators who have earned more than $1 million. In August alone, more than 200,000 hours of new content were uploaded. All that content, of course, means a lot more slop, but it also means more potential hits, and Nayak says user retention increased by 50%. There are now more than 2.5 million paying customers, and the average user now spends 150 minutes on the platform each day, leading to more microtransactions and more advertising. In the last 12 months, Forbes estimates Pocket has recorded around $400 million in topline revenue (around 30% goes to App Store fees and a small percentage passes through to creators), more than double the previous year.
“I used be, like, Why is it so hard to get a hit show?” says Nayak. “Hit rate doesn’t matter to me now. Even if the hit rate is lower than professionally generated content, the absolute volume of hits is more than 10x.”
For Nayak, this AI boost is only the beginning. In the next two weeks, Pocket plans to release new artificial intelligence tools that will help creators ideate and write full show episodes, allowing nearly anyone to become what Nayak calls an “architect” of their own series. He is almost gleeful when thinking about all the new stories about the come online.
“More content is always great,” Nayak says. “Give me 100,000 great shows, I’ll give you $5 billion of ARR [annual recurring revenue]. That’s how I think about it.”
It’s a remarkably unromantic way to think about creating hit shows, but in an entertainment landscape where investors are constantly looking to minimize risk by backing intellectual property with any kind of existing audience, mainstream Hollywood has started to embrace micro content as a testing ground. Disney invested in Singapore-based microdrama producer DramaBox as part of its Disney Accelerator program in 2025; Fox Entertainment took a stake last fall in Ukraine-based Holywater; Sony, Paramount’s BET, and Versant all have vertical dramas in production.
“We collect a lot of data, minute-by-minute user data, and we can share it with the partners,” Holywater co-CEO Bogdan Nesvit told Forbes last year, just after the Fox deal was announced. “And this data can be really important for making decisions, like for example, what kind of movies they will produce next, because this is essentially IP incubation.”
Using AI to assist on some, or nearly all, of the production pipeline takes the same principle to its logical extreme. In 2024, the cost of producing an hour of content on Pocket was around $2,000—fractional compared to the many millions it costs for A-list movies or top TV shows, and less even than high-end podcasts or audiobooks—but that year, Pocket reported a nearly $20 million operating loss. After cancelling 200 writer contracts and going to an AI-powered, user-generated approach, production costs fell to just $30 per hour, according to the company. Pocket is now cash-flow positive and will generate around $10 million in profits this year despite heavy reinvestment, including expanding to more than 850 employees and opening an office in Los Angeles.
If there is any resistance to this amateur or automated content, it’s not showing up in the audience numbers. Brandan Dennehy, a 20-year veteran in Hollywood before being hired to launch and run U.S. content operations for Pocket in 2022, said it was “eye-opening” to see which stories found an audience. In fact, it seemed like the less he applied Hollywood storytelling techniques to series, the better they performed. So his team focused instead on lowering the friction for episode delivery and creating irresistible story hooks.
“One of the big learning curves for me was, I don’t mean this to sound like a negative towards audiences, but like, I think a lot of people just don’t care,” says Dennehy, who left Pocket in 2024 and now runs his own microdrama company Atomic Drama. “If you hand deliver things to people and it hooks them, I think a lot of understandings about what entertainment is supposed to be start to go out the window.”
And in contrast to most microdrama video platforms, which are hugely popular in China but have had difficulty breaking into the United States, around 80% of Pocket’s business comes from the U.S., and another 12% comes from Europe. Western audiences, who may be at least initially resistant to the uncanny valley effect of AI-generated video, appear far more willing to accept AI-generated audio content.
Dennehy says there were internal conversations about pivoting the company fully to video in 2024, after seeing how much bigger the potential video paydays could be, but the founders didn’t want to spook investors with such a big change. Early live action video productions proved unsuccessful, and in June, Nayak shuttered Pocket’s video microdrama app, Pocket TV, citing low user retention and more expensive production.
“We don’t think the current microdrama model works,” Nayak wrote on LinkedIn after Pocket TV’s shuttering. “Much of the category today is being supported by aggressive user acquisition budgets, dark patterns and auto-renewal mechanics, that’s not a game we’re interested in playing. If your business only works because cancelling is intentionally difficult, you don’t have product-market fit, you’re a marketing arbitrage platform.”
And yet, the video paydays have proven too tempting. Almost immediately after Pocket TV shut down, the company stealthily launched a new video app, called Pocket Saga, which Nayak claims is generating more than $1 million per month. He believes the AI technology is finally good enough, and Pocket’s IP library deep enough, to differentiate from other services. And while the company is starting with only its most popular series, to control costs, he believes eventual success will come through volume. “At a scale of 200,000 hours of content, turning all of that into AI video would be a significant undertaking,” he says. “But that’s going to happen.”
While some may believe this outlook on the future of entertainment to be nearly as dystopian as the fictional world of My Vampire System, Nayak is a true believer. In the not-too-distant future, he believes Pocket will not be the only platform democratizing its storytelling offerings.
“Is the future of Netflix a professionally generated content platform, or is it a platform where anyone can produce a movie? My view is that it should be user-generated content,” Nayak says. “If you can have single person studios delivering $100 million IPs, imagine what the world is going to become.”
Leave a comment