Buoyed by a growing appetite for on-demand audio content in Indonesia, listed radio firm PT Mahaka Radio Integra Tbk (MARI) is building up its multi-platform app Noice as it draws up plans to increase market share and explore monetisation models.
Launched in June 2018, Noice is part of the Mahaka Media Group, founded by Indonesian businessman Erick Thohir, who currently serves as state-owned enterprises minister in the government.
Apart from Noice, Mahaka Radio operates eight radio station networks. Noice started as a radio streaming platform and subsequently evolved into a radio streaming, music, and podcast platform in October 2019.
Explaining the shift to the podcast strategy, Mahaka Radio president director Adrian Syarkawie said, “we see the content on-demand has increased enormously globally. If we only rely on radio streaming, [the business prospects] are less attractive. Moreover, people can still listen to radio from other media.”
“We will enter user-generated content gradually this year,” Syarkawie said, on the launch of the Noice 2.0 version last month.
By 2020, the majority of content on the Noice platform was dominated by podcasts. Unlike global rival Spotify that has partnered with podcast content creators in Indonesia, Noice builds its entire repertoire in-house with an emphasis on popular genres of comedy and horror. With its hyperlocal content strategy, Noice is widely anticipated to be the challenger brand to Spotify in Indonesia.
According to a study conducted by Spotify in June 2020, over 20% of Indonesian users listen to podcasts monthly. The duration spent on podcasts grew ten-fold in 2019. Additionally, Indonesia saw a 149% increase from June 2019 to June 2020 in the number of users on Spotify in Indonesia. It also saw a 220% increase in music streaming on Spotify across Southeast Asia in the same period.
“After a decade dominated by the evolution of visual media, we’re entering a new golden age of audio. As Indonesians spend about 7 hours and 59 minutes online daily – the screen fatigue is real – with 56% of Gen Zs and Millennials in Indonesia telling us that there is too much visual stimulation today and that audio is a nice escape from it,” as noted in the Spotify research.
Spotify’s research stated that Indonesia was the third biggest country for the usage of Anchor, its podcast creator platform, after the US and Brazil.
MARI is looking to launch the Noice 3.0 version by the end of this year to monetise the business, enable external content creators to share their podcasts in the app, and integrate with other platforms.
“Our focus now is enlarging the customer base, strengthening the technology and content. We will monetise the business in Q4 2021 when we expect advertisement and subscribers will contribute to our revenue,” Syakarwie said.
Noice is among the few podcast platforms that have grabbed venture capital interest in the country. Last year, it secured funding from Alpha JWC Ventures and Kinesys Group who together hold a 25% stake in the platform while MARI owns the rest. Meanwhile, Noice is also close to sealing a deal for an undisclosed sum from an Indonesian unicorn.
“Noice is built upon Mahaka’s vast content library (radio, music, original podcasts), giving them an excellent edge. Mahaka’s decades of experience also brings local market and audience understanding not many have, which will accelerate further customer and creator,” said Jefrey Joe, co-founder and general partner of Alpha JWC, in an earlier report in DealStreetAsia.
“NOICE’s strategy to focus on its original podcast combined with its expertise in the radio business will result in unique and substantial competitive advantages. This will bring the firm closer to the monetisation stage,” said Willinoy Sitorus, head of research of Trimegah Securities Tbk, an Indonesian brokerage firm, in the company’s research paper.
Sitorus added, the company can leverage its existing resources (radio and hosts) to compete with big names like Spotify and Joox with MARI’s strong presence in the radio industry. However, the company should grow its monthly active users and increase engagement to over 60 minutes per user to generate revenue from advertising and subscription.
Currently, the platform has 170,000 active users with a total user base of 450,000. Noice is targeting to reach an active user base of 1 million this year.
The number of podcast listeners in Indonesia grew to more than 3.6 million listeners and the average number of episodes heard per week increased by 10%, per Nielsen research in February 2020.
Consulting firm Deloitte estimates the global podcast market revenue in 2020 at just over $1 billion with a potential to grow up to $3.3 billion-plus business by 2025.
Podcasts enjoy multiple revenue streams such as advertising and sponsorships, subscriptions, events, merchandise, content marketing, contracts for branded podcasts, and individual listener donations.
However, despite a higher number of users, podcasts might be harder to book revenue compared to audiobooks, as the Deloitte study found in the US market in 2018.