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Indonesian audio app Noice readies to take on Spotify

Venture capital eyes music and podcast operator amid online streaming boom

Noice started as a radio streaming platform and subsequently added music and podcast platforms in October 2019.

JAKARTA -- Buoyed by a growing appetite for on-demand audio content in Indonesia, listed PT Mahaka Radio Integra (Mari) is enhancing its Noice app in a move to increase market share and explore monetization models.

Launched in June 2018, Noice is part of the Mahaka Media Group, founded by Indonesian business owner Erick Thohir, who currently serves as the government's minister for state-owned enterprises.

Apart from Noice, Mahaka Radio operates eight radio station networks. Noice started as a radio streaming platform, later adding music and podcasts in October 2019.

Explaining the shift to the podcasts, Mari President Adrian Syarkawie said "on-demand content has increased enormously globally," adding that if the company had stuck only to radio streaming, its business opportunities would be limited and challenged. "People can listen to radio from other media," he said. "We will enter user-generated content gradually this year," Syarkawie said, referring to the launch of Noice 2.0 last month.

By 2020, Noice content 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 comedy and horror. With its hyperlocal content strategy, Noice is expected to challenge Spotify in Indonesia.

According to a Spotify study conducted in June 2020, over 20% of Indonesian users listen to podcasts monthly, with the duration spent on podcasts growing tenfold in 2019. Additionally, Indonesia saw a 149% increase from June 2019 to June 2020 in the number of Spotify users. This coincided with a 220% increase in music streaming on Spotify across Southeast Asia.

According to Spotify research: "After a decade dominated by the evolution of visual media, we're entering a new golden age of audio. As Indonesians spend about [8 hours] online daily, screen fatigue is real, with 56% of Gen Zs and millennials in Indonesia telling us there is too much visual stimulation today and that audio is a nice escape from it."

Spotify's research also showed that Indonesia was the third-biggest country for use of its podcast creator platform Anchor after the U.S. and Brazil.

Mari is looking to launch Noice 3.0 by the end of this year to monetize the business, enable external content creators to share podcasts in the app, and integrate with other platforms.

"Our focus now is enlarging the customer base, strengthening the technology and content," Syakarwie said. "We will monetize the business in the fourth quarter when we expect advertisement and subscribers will contribute to our revenue."

Noice is among the few podcast platforms in the country that have lured venture capital. Last year, it secured funding from Alpha JWC Ventures and Kinesys Group, which 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, giving them an excellent edge," said Jefrey Joe, general partner of Alpha JWC, in an earlier DealStreetAsia report. "Mahaka's decades of experience also brings local market and audience understanding not many have, which will further accelerate customer and creator."

Willinoy Sitorus, head of research of Trimegah Securities, an Indonesian brokerage company, also chimed in: "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 monetization stage."

Sitorus added that the company can leverage its existing resources to compete with big names like Spotify and Joox. However, he said 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 base of 450,000. Noice is aiming to expand its active user base to 1 million this year.

The number of podcast listeners in Indonesia grew to more than 3.6 million and the average number of episodes heard per week increased by 10%, according to Nielsen research in February 2020.

Consulting firm Deloitte estimates that the 2020 global podcast market revenue hit just over $1 billion, with a potential of over $3.3 billion 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 earn revenue compared to audiobooks, as the Deloitte study found in the 2018 U.S. market.

For the original story from DealStreetAsia, click here.

DealStreetAsia is a financial news site based in Singapore that focuses on private equity, venture capital and corporate investment activity in Asia, especially Southeast Asia, India and greater China. Nikkei owns a majority stake in the company.

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