Full Transcript

Utsav Somani: Alright listeners, today it's me and Bisu for a very very special stream, stream number 119. Bisu is the founder and CEO of KUKU. Bisu, welcome to the show.

Lal Chand Bisu (Kuku): Thank you.

Utsav Somani: So what should we talk about today? There is a lot to cover today actually. Yes, yes. You have made a very exciting business.

Lal Chand Bisu (Kuku): Very excited to do this discussion.

Utsav Somani: So should we call it the KUKU group or should we like describe it in another way?

Lal Chand Bisu (Kuku): KUKU group will be the nicer because we have now group of apps.

Utsav Somani: Okay, so for our listeners let's introduce the company and the group.

Lal Chand Bisu (Kuku): Yeah, so like we started back in 2018 and we are in mobile premium content space. When we started back in 2018 then like we faced this problem that these mobile users don't have that much premium content on mobile optimized. So there are 4 types of content for mobile premium content. One is video, audio, then images and text. First we picked audio, we launched KUKU FM in 2018. Then we entered in video space back in 2024. We launched KUKU TV. Then now we are expanding other content types also. Now it's been more than 8 years.

Utsav Somani: But before that I think we go into the product and the company a little bit more. I think your personal arc is very very exciting and interesting. Like you used to know Shikhawat first. Then you joined IIT Jaipur in first batch in 2008 where you learnt literally everything. English, Hindi and other things. And then you started a test prep company which you exited to Topper easy prep. And then after that you spent some time with Topper. And then after a few months of break you started KUKU. So tell us about this journey. What all did you learn from this?

Lal Chand Bisu (Kuku): We are 3 co-founders in the company. Me, Vinod and Vikas.

Utsav Somani: And all of them are from IIT Jodhpur, right?

Lal Chand Bisu (Kuku): All of them are from IIT Jodhpur.

Utsav Somani: And IIT Jodhpur must have been a start-up even then. I mean you were in the first batch.

Lal Chand Bisu (Kuku): Yeah, I am from the first batch. I entered in 2008 and registered in 2012. And actually the interesting part is that I belong from a village. And I studied there till 10th class. In Rajasthan, in the village, we used to speak Shekhawati. There are 5 languages in Rajasthan. Marwadi, Mewadi, Harwati, Shekhawati and one more. So I used to speak Shekhawati till 10th class. Then I moved to Sikar. I learnt Hindi. Then I moved to IIT Jodhpur. There I started speaking English. So I can say that I belong to that root part of India. Where culturally there was a story-telling background. And I also connected the dots. There is a lot of disconnect between the top and the root people. In English, you will get everything without stories. But when you go inside, you get less content. And there is a huge gap on the internet of those stories. And even today, it is the same problem statement. The real stories of Rajasthan and other local places. We can take it globally. We are much behind as a country to tell stories. We picked this problem to solve in India first. And now we want to take the same thing globally also.

Utsav Somani: So in Jodhpur, my grandparents were from Pavta. So I used to go to Jodhpur for 5-6 years continuously in my summers. So I am very familiar with Jodhpur. What are the numbers of everyone?

Lal Chand Bisu (Kuku): So currently, we are in the phase to file for IPO. So I can't say that much detail for numbers. But overall, I can give you the sense that in public also. We have more than 10 million users. We have 3 apps. One is KUKU FM. That actually audio first app. And you can get fiction, non-fiction content on KUKU FM. Second is KUKU TV. That is mobile first vertical video. Today we call it micro-drama. So micro-drama platform KUKU TV. And third is Guru. In micro-drama and audio both, we are the largest platform countrywide. And we have more than 10 million paying users. We started with Hindi language. Today we are in around 10 languages. After Hindi, we have Tamil, Telugu, Malayalam, Kannada. Now we have Marathi, Bengali. Now we are adding Gujarati also. Punjabi also. And even we are going beyond India. With these same apps. And like different languages as well? Like foreign languages? We have started working in Indonesia. We are adding Bahasa. We started working for Middle East. In Middle East, we are already largest player for micro-drama. KUKU TV is the largest player. And we started some work for US market also.

Utsav Somani: And I think I read one statistic which is very interesting. You got more than 10% of paying users on the platform. Suppose 100 people were coming to you. You got 10% of them to pay versus the global average which is 3-5% for content. What was the secret sauce?

Lal Chand Bisu (Kuku): It depends on the product. How is your service? How is the product? And the user pays for that. And when we started, I will tell you a little bit about our product. We are in the content space. But the content is very wide. If we go to the old history, it started with theater. In theater, we used to watch 4-5 movies in a month. We didn't get more content than this. We moved from theater to TV. We started getting content every hour on TV. Then you got 100X more supply than theater. You got hundreds of shows. After that, the third wave came. On OTT. In OTT, content started being made for every niche. For example, Chernobyl is not for everyone. But there is a niche that will watch Chernobyl. It can watch it anytime. It is not fixed on per hour. This is the fourth wave. This is the mobile-first audience. You are making premium content for mobile-first audience. In these four waves, theater, TV, OTT, and mobile, if you see, the length of the content started dropping. Earlier, 4-hour movies were made. Then 1 hour came. Then OTT, 20 minutes came. Now mobile is 2 minutes long. The second fundamental change was that in the other three evolutions, you had to make a commitment. If I want to watch a 4-hour movie in theater, I should have 4 hours. If you are watching on TV, you should have 1 hour. If you want to watch a series on OTT, you need a weekend. It changed completely on mobile. Because you always have a mobile. You started watching in slots. In the day, you take out your mobile as soon as you wake up. Later, when you travel, you take out your mobile 10 times. You get around 50 slots in which you can consume content. Half the time, you do your utility stuff and social media stuff. Half the time, you consume premium content also. There are two types of content. One is UGC, which has YouTube, Instagram, and Twitter. The other side is PGC, which has Netflix, KUKU TV, and Jio Hotstar. The slots on the mobile increased a lot. You need content in slots. Because you have to fill literally 1 cm away. If you don't like it, you can change it. You need an insane high supply of content. In the beginning, there were 4 movies, now there are 100 in TV, now there are 1000 in OTT. Here, you need content in lakhs. You need a huge supply. When we enter the market, there is a big gap for premium content. People have UGC side. Instagram has an infinite feed. Everyone has a personal feed. Everyone can create content. But in PGC side, there are 4-5 movies that are released today. With internet, the supply didn't explode. In history, this is the first time where we are able to solve this premium content supply also. Today, just for your context, there are 4-5 movies on OTT every month. We are creating more than 200 movies for mobile customers.

Utsav Somani: And you want to scale that up. I read an interview that over 1000s.

Lal Chand Bisu (Kuku): We want to take it to 1000 movies. Same length. Today, we are riding on AI. AI is in early journey. If you see the content, day by day, it is going with high quality. We are at that point where you can't distinguish whether it is AI or real. Within 3 years, quality will be insane. Today, when we shoot and create, we will say that it is low quality. Your creativity and scale is going in insane direction. You can do anything with AI. I am giving an example. If you want to make history content or micro content, you need very large setups. It is so expensive. With AI, you can create so good and larger than life setup so well that you can't even match it in your traditional way.

Utsav Somani: In terms of cost, hardware, manpower versus now, that will be interesting. When you started in 2018, AI didn't exist. Video models have improved in a year. They have become realistic. Eventually, they will come to a better state. What has changed from 2018 or when you first started KUKU TV to now? In terms of costing, manpower, technology. Give us a rundown.

Lal Chand Bisu (Kuku): Let me give you the context of our industry also. Typically, the movies are made in 5-6 months. Typically, on average. More or less.

Utsav Somani: Now you do it in 15 days.

Lal Chand Bisu (Kuku): You spend around 4-5 CR. This is the typical setup of the movie creation. After that, when TV came, the cost of celebrity decreased. Your cost reduced to 1 CR. Later, it was reduced further. Now, for mobile first, it was reduced further. The value of celebrity fell further. Your number of content pieces increased. In mobile first, it was further reduced. Content supply is insanely high. Your celebrity cost is lower. You don't even know them. You don't even see them. Cost is like 5-6 CR then reduced to 1 CR. When we started back in 2018, we used to spend around 20 Lakh Rupees for 2 hours. The cost was 1 hour 10 Lakh. Today, we are able to create 5 Lakh Rupees per hour. If we use AI. We can see that by the end of this year, it will go 1-2 Lakh per hour. You need insane supply. You will have to reduce the cost by 2 CR. It used to take 5-6 months. Today, it is taking around 3 weeks. We have to reduce it to 1 week. You will have to bring the cost down to less than 1 Lakh. Then you are able to supply 1000 movies per month.

Utsav Somani: In content creation, have you figured out the science or is it just that volume and then there is something for everyone.

Lal Chand Bisu (Kuku): Actually, it is quite interesting. Till now, we used to feel that premium content is monthly content. But as premium content supply increases, as we are creating 200 movies every month. In China, there are 4-5 movies every month. On the other side, they are creating 4000 movies every month. We are in 200 movies and they are creating 4000 movies every month. With this supply, the behavior is close to UGC platform where you have infinite content and everyone has their own personal feed. The same thing is happening in the premium side. Everyone will have their own content. Even if you see the transition, there are 300 people in the theater and they know how to create monthly movies. If there is a TV outside, the whole family watches it. Then there are 2-3 people who watch OTT. Mobile is everyone's personal level. You have to create content for everyone. When 4000 movies are made per month, you have to think in the scale. It is more like a data game. Creativity is a risky word. You can't say that this is a data game. But this is happening. In extreme cases, TikTok and Reels have their own content. There is infinite content. With data, the filter goes up. The same thing is happening here. Instead of the number of Reels, there is a story arc. Every movie has a big arc that is revealed at the end. There are many small arcs. In microdrama, there are 5-6 small arcs. In microdrama, there are more than 100 arcs. The story runs very fast. A typical IMDb viewer will cringe. How can a movie run so fast? The arc works like data for us. We create personal content with the data. We are trying to create personal content for everyone. When 10,000 movies are made per month, everyone will have their own movie.

Utsav Somani: But it will take some time. Let's talk about the pricing. You didn't give me a clear answer about the pricing.

Lal Chand Bisu (Kuku): I was adding that the customer has to give value. When we started creating this instant supply of content, when we are making 200 movies out of 4 movies, the customer started feeling the value added. Now I am getting this premium content. Because of that, users are paying highly on our platform. Out of 100 downloads, 10 users end up consuming the content. Our content is also like Netflix. You have to pay and then you can consume. It is value added to the user's life. Value added is we are giving in terms of premium content.

Utsav Somani: They have never got this much content supply I think most of the products that we use typically in tier 1 metros are created by the Indiranagar and Koramangala crowd. You have gone beyond tier 3 also. And now doing international as well. So there must be some product learning from this which I think our listeners will find useful. So coins, auto pay, what was different in this which I think founders can learn and operators in the ecosystem can learn from your journey.

Lal Chand Bisu (Kuku): In terms of What did you do in terms of product?

Utsav Somani: Apart from just the content, maybe 3-4 things that you want to highlight and give a shout out to the team also.

Lal Chand Bisu (Kuku): We are in more bottom up product. Like we started in Hindi, then Tamil, Telugu, recently we added English like last year we added English. And now we are going outside India also. So like there are few nuances which work a little differently for the Indian public.

Utsav Somani: Any features like you can highlight and mention? Coins I think to unlock maybe the next term.

Lal Chand Bisu (Kuku): There are few things which work differently. One of the things is in monetization side sometime you have to win the trust of the user. You have to give trust to the person for whom you are signing up. That is a valuable product. You can actually innovate in monetization side. Like you can introduce coins or such a package in which they can buy 50 coins and they can consume first 5-10 episodes and after that they can consume more episodes. Or you can do like you don't have to buy a full platform subscription. You can buy one show. And after that if these users like content then they will end up buying subscription also. So these kind of monetizations work very well. And now our learning is that instead of focusing only on one monetization model like Netflix only subscription it works very well. You should have good user segmentation and today technology is so fast-forwarded that you can actually identify show subscription to users, show coins to users and show monthly plan to some people and show quarterly plan to some people and show yearly plan to some people. That works much much better than if you have a plan then take it. Otherwise don't come on the platform.

Utsav Somani: So that also works very well. And UPSA I am guessing monetization will also be very easy.

Lal Chand Bisu (Kuku): UPSA is something that it provides infrastructure and enables people to pay online. If you go like in India UPSA is the largest infrastructure through which you can do digital payment. So there are two types. One is you can do transaction. They can buy one content and other is you can take subscription so they will sign a mandate for author pay. In other countries it is a little different. Like when we go abroad like Indonesia or Middle East you have to figure out different kind of payment gateways and you will get different type of infrastructure like there credit card is more or debit card is more. So there people sign up. So like every country have their own infrastructure for enabling the digital payment. In India UPSA is the best. It doesn't match with anything else.

Utsav Somani: And pricing. So you presented and spoke at the AI India Summit you said 150 is the base paying capacity. And after that our pricing I think annual 399 and 899. FM and TV products. So how did you figure out pricing for market? And how do you test propensity that you can go higher?

Lal Chand Bisu (Kuku): Honest answer we don't put that much. Like in past we did lot of experiments to figure out the pricing but today what we have seen is that you should not think too much. The platform or telco companies or other OTT platforms that are charging users. Most of the charges are same. If you notice a little bit earlier they were charging 99. Today all of them have moved to 399 or 699. So keep yourself in that sweet spot. In that users don't think too much. This is like go to price in which I want to use a product. If I will like then I will continue otherwise I will drop. If you go above that then user actually thinks is it useful for me or not. Should I sign up for it or not. If you keep price more than 1000 then your conversion will drop heavily. Best thumb rule is keep your pricing close to telcos. If you are a massive product. Rest can be according to your product. But if you are a massive product then you can actually use that thumb rule and keep that pricing where user doesn't have to think too much.

Utsav Somani: And what is the split now? Like in terms of humans and machine on AI content on Cuckoo. Like what is the split? Is it 50-50? Is it 80-20? What is the split now? Human made vs machine made content.

Lal Chand Bisu (Kuku): So actually this is not that straight forward. Like we make UGC content. So in UGC typically either in one camera one minute video or photo or if you are making ACV then you get full content in one prompt. When you make premium content like 2 hours or 10 hours or 20 hours then there are steps to create that content. Like you start with your title then you write the script then you do the dialogue writing then you do the pre-production planning like who will be in this what will be the location then you go in the production side then post production like this is the typical cycle and every step has its own use. So when you are thinking about title or plot you use your tools to get the best title. You will get 10 options. In script writing you will get again like 5 options you will choose one. Then dialogue writing then your writer or creative person will actually think whether it will work or not. So there are two types of production. Like traditionally what used to be that you have to write the whole original script in that you make 0 content. We use one hybrid model in which these steps are 100% same. In script we do hybrid version where 10% AA works and 90% is actual script. That is like I will say overall 70% AA role will be there in end-to-end content. Now there is one more funnel of content production from last 2-3 quarters we started producing end-to-end AA content also. That is around 20% as far as I know. 20% is end-to-end and 80% is hybrid in which 70% is AA and 30% is real script. It is a different playbook for premium content creation. And I think startup companies they need actually premium content. If they are working for premium content then they have to use the same funnel. You can't use direct AA tools. You can't use chat GPT or any other tool. You have to create your own tool. First you will write the plot and then end-to-end. If you are in suit then preproduction planning will be done in AA. 10-10 seconds video will be made and then you will do post production. It is very different. It will need a dedicated team. But once it is set up, you will get insanely high results. Whatever the product, it doesn't matter. We are a completely content product. But at the end, you need content to reach out to the users. I think every company should have this team, in which end-to-end A content is being made. And I will recommend hiring freshers from college. They know how capable A is. They don't think there is another way. They think only A can do everything. And with that attitude, you get really good out of it.

Utsav Somani: You also started creative programs, right? KUKU TV, the Kala Kaar program as well. When you were designing these programs, what was the thought process and how were they unique?

Lal Chand Bisu (Kuku): So, we don't create content in-house completely. In the end-to-end, we are setting up the team inside. But till date, our content is done by the creator community. And we have around 50,000 creators, who make content for us. There are all types of roles in it. Some people write scripts, some record audio. Some edit it later. Then there is the shoot. There is a huge cast and crew on the shoot. We need all these people. We don't need only one type of creator. We need all these kinds of people. We have created this ecosystem and tools where they can directly get on board. If their work is submitted and we accept their work, then we give them two kinds of incentives. One is revenue share and the other is upfront fee. Some creators don't want revenue share. They want upfront money. So, these are the two monetization models for creators. But we work with 50,000 creators. They can get on board through our tools. And they can work for Google.

Utsav Somani: And just to understand your user a little bit better, for myself and for the audience, which wants to learn more about this segment. What are you competing against? Wallet share is limited here. Suppose they have 1000 rupees of disposable income in a month. Who are you competing against? When they deposit money or take a subscription on Cuckoo. Get us into the psyche of your average consumer.

Lal Chand Bisu (Kuku): That was the default dialogue of the founder of Netflix. Who is your competition? He says sleep is his competition. When the user goes to sleep, he doesn't consume content.

Utsav Somani: When real money gaming was banned, did you see a boost on spending on Cuckoo?

Lal Chand Bisu (Kuku): Yes, there was a 20% jump in overall revenue. There were two reasons. One is that the competition was low on Google and Meta. And the other is that the users had more time to spend on entertainment. The psyche of the user is like a black hole for content. No matter how much content you make them consume, they want the best entertainment in their life. As food is becoming essential, you need content in life. The only filter that users put is that they want better content. If you look at YouTube's journey, there were bad videos in the beginning of 2010, but we used to watch those videos. As its quality increased, if there was a 2010 video, we would not like it that much. We want this quality of video. Today, YouTube is also becoming more premium. Its content is getting better day by day. The same thing is here. We have to improve the quality over time. You can take another example. When TikTok first came to India, only tier 3-4 guys used it. People even use the term Chhapri. Now in every country, all the users use TikTok. The quality of the content is insanely high. We don't use TikTok, we use Reels. But everyone uses Reels today because everyone is creating the content. Same thing for our content. At the end, everyone wants content. It is just that today we are not able to fulfill the supply. Today we are able to make only 200 movies. Actually, we need to make 10,000 movies per month. But it will take time. The quality should improve and the number of content should also improve. They need content.

Utsav Somani: As a founder and CEO of the KUKU Group, do you spend more time thinking about product or do you spend more time thinking about content? Do you see yourself as a product company, a tech company or a content company, a production house?

Lal Chand Bisu (Kuku): At the end, I will say what is true for all companies is that the user is the most important. After the user, you think about what the user consumes, what the product is for them. For us, that is content. After that, you think about how you make it. If you are creating in a traditional way, then you think about the content creation in a different fashion. We are creating that content through tech. For us, tech is the most important part. How to sort the content supply. Actually, it comes from the user. They spend the most time. Today, they spend around 80-90 minutes on our platform. But they do it while looking at the content. That feature, that feature is there. They are valuable also for some users. But that is not the primary part. The primary part is the content. The content should be so good that the users spend 80-90 minutes on our platform. After that, how do we make it? It is made on our tools. I will say we are more tech platform. Even I will add AI also because we are completely on AI tools. That's where most of the time goes.

Utsav Somani: Tell us about your power cohort and your average cohort. Like I mean, average user you said spends 80-90 minutes on the app? Yes.

Lal Chand Bisu (Kuku): And this is across Google? 10 hours, I would say. Top users watch more than 10 hours. It's insanely high consumption. Or actually, that is true globally also. Consumption on a video is very, very, very high. If you are able to fulfill the supply. Even today, we are not able to meet the demand. But it's crazy.

Utsav Somani: And don't you try your ads in freemium?

Lal Chand Bisu (Kuku): Yes, we are launching freemium product also. So, we see India in two parts. One is where they have paying capacity. They have UPA access. They have medium to pay on digital platforms. Where there are 300-400 million user base who can come and pay. There is another India which either can't pay online or doesn't feel like paying. Or has a fear that if they do a digital transaction, something will go wrong. So, you need different kind of service for those kind of users. So, we are launching a different platform. Already launched actually, Free Drama. Where you can consume all the content for free. And we are focusing on ads monetization and share-share payments.

Utsav Somani: Interesting. We are coming to the close. You filed for an IPO. How does it feel? You will be one of the largest content and subscription business to get listed. If not the first. Am I wrong?

Lal Chand Bisu (Kuku): If you see the internet companies, then we will be the first one. For us, IPO will be a milestone. And actually, our main reason to go for IPO is also, I will say, to see this long-term picture more clearly. We want to work more fundamentally strong principles. We have a passion to see a 50-100 year old picture. We are not looking at this near-term picture. In the VC world, there are benefits also, but there is also a dangerous downside. You are raising, your peer is raising, and you are exploding. But if you go public, and if you keep your fundamentals strong, that you are running profitably, and you are actually growing maturely, then actually you can exist for next 50-100 years. very excited. But I will say this is a one milestone. We are looking for this longer picture.

Utsav Somani: And it's an exciting milestone. I think the team will be excited. And everyone should be pumped for this also. I think one question was left from me. Indian Institute of Zombies. Have you ever experimented with movies? Is that something that you want to continue doing?

Lal Chand Bisu (Kuku): Actually, I will say that if you come to Cuckoo, and see how our team works, we do a lot of experiments. At a time, more than 10 experiments are going on. Someone is making an app, someone is making something else.

Utsav Somani: Releasing a movie in the cinema.

Lal Chand Bisu (Kuku): Yeah, that was also part of the experiment. our fundamental thesis is that for the first time in history, the way of content creation is changing. Content is exploding. So, all the content formats will change. Even theater, OTT, mobile phones, are dependent on it. But everyone's fundamental way of creating will change. So, our thesis was can we make a movie and release it through AASA? We didn't know what ABCD was to release this movie. Somebody picked this experiment that we should make a movie and release it through AASA. So, we released this movie. It was a flop movie. But we learned that you can make a movie through AASA. You can go to the theater and show it on a big screen. So, that was one of the experiments. Even today, there are 10 experiments. I can mention 2-3 experiments. Please. One experiment is going on that the user will be the hero in the story. Your friends will be the side effects. It's not like on Instagram where you put an image with a filter to look smart. It's the same. It's a very good result. I will be the hero. I have powers. Today, we are not able to scale it because of the AI cost. It takes a lot of time. The rendering cost is very high.

Utsav Somani: Maybe in a year or 2 years.

Lal Chand Bisu (Kuku): But we started making the 2-3 response from the users. It's quite good. The second experiment is games. There is a very thin line between content and games. Why not into games? We are making games from AASA. The third experiment is when the content is going to be on such a scale then we should give options to the users to choose the plot of the story. In Game of Thrones, you can choose not to die. I want to see the story in different plots. These are 2-3 experiments that I am mentioning. There are more than 10 experiments at a time.

Utsav Somani: Your team must be going to these areas to spend time with the users to learn. Even the creators will be spending time in different parts of India to learn.

Lal Chand Bisu (Kuku): There is nothing more important than the users. Everything you have to start from the user. There is to set the culture that how you are thinking about every problem and what is the attitude when you do some execution. Our thumb rule is to go deeper to 3 levels. If you are doing anything, even if you are a leader, you should know the work of the team to 3 levels. If you are making content, you should know it to 3 levels. Even if you got some problem, you should ask 3 times why it happened. Then you will reach the course. Even if you work, you should go to 3 levels. In these 3 steps, you will get the user in between. Starting from the users is very important. You should have that connection. Otherwise, if you start working in silos or parts, then you will disconnect. That is the biggest problem of processes. Whenever we make a process, the team will do this and that. We make it for that time, but as soon as it is made, everyone does their work. But the larger picture when the service goes to the user, it gets disconnected. It's very powerful to connect with the users.

Utsav Somani: All the best. Thank you so much for coming on our show. I am taking a promise from you that you have to come back to our show on the next day of IPO to recap the journey. There are a lot of questions left. I couldn't ask the numbers. We will discuss it after the IPO. Let's meet sometime for Onion Kachori.

Lal Chand Bisu (Kuku): Yeah.

Utsav Somani: Sure. Done. Wishing you all the best. Have a wonderful weekend. We will see you on Monday at 4 o'clock for Stream 120. Thank you so much.