Audio entertainment startup Pocket FM is winding down Pocket TV, its microdrama vertical, as it sharpens focus on audio dramas and overseas markets ahead of a potential public listing, at least four people aware of the development told ET.The move comes as short, vertical video dramas have become one of the hottest bets in India’s consumer internet market. Kuku Technologies and Mohalla Tech, the parent of ShareChat and Moj, are doubling down on the format, even as investors remain cautious about content-led businesses that have yet to prove durable monetisation and retention.Kuku Technologies, the parent of Kuku FM and Kuku TV, has confidentially filed draft papers with Sebi for a Rs 3,500-crore IPO, targeting a valuation of around Rs 15,000 crore. Mohalla Tech is also planning an IPO in the next 12-18 months, cofounder and chief executive Ankush Sachdeva told ET.“Pocket FM is going back to what it understands best — audio dramas and overseas markets. Video is a different muscle. It needs fresh content investment, production capabilities, casting, localisation and a very different operating rhythm,” said one of the people cited above.The closure also reflects Pocket FM's shift to prioritising profitability, ahead of a potential IPO. ET reported on June 17 that the company has started discussions to shift its holding structure back to India for a domestic listing. The company has also been in the market to raise fresh private capital, but is facing questions over its strategy, ET reported last week.Another person aware of the company’s plans said the move would help Pocket FM focus on audio, where it already has a content library and monetisation in place, rather than keep funding a video vertical that needs fresh shows and production capabilities.Confirming the development, a spokesperson for Pocket FM said, "Pocket TV was launched as a beta product to explore the emerging microdrama category and is not a material contributor to Pocket FM's business. As with any product experiment, we periodically evaluate performance and strategic fit, and any decisions related to Pocket TV are part of that normal process." "Our core focus remains building the world's leading audio entertainment platform. Audio continues to account for the overwhelming majority of our business, and we remain focused on scaling the category globally," the spokesperson added.Pocket FM's move to shutter Pocket TV has sharpened a broader debate on content versus distribution in microdrama.Pocket TV and Kuku TV are closer to Netflix-style businesses, producing and distributing professionally made content. Mohalla Tech's Quick TV is similar, but the company's larger bet remains Moj, a distribution-heavy short-video platform more comparable to YouTube Shorts or Instagram Reels, industry executives said.The distinction matters because investors tend to view distribution-led platforms as stronger businesses, given their network effects, user data and repeat engagement. “Investors are not only looking at content. They are looking at distribution, repeat usage, customer acquisition cost and whether users are coming back without heavy marketing,” said an industry executive.Rising competitionA Kotak Institutional Equities note last year said Kuku TV had crossed 100 million app downloads in its first year, with multiple shows crossing 100 million views. Kuku’s management has also told analysts the company has about 10 million active paying users across platforms and produces more than 150 live-action shoots a month.Kuku FM reported a 175% rise in FY25 revenue to Rs 241.5 crore, while losses widened 59% to Rs 152.6 crore on higher ad spends. Parent Pocket Entertainment reported Rs 1,768 crore in FY25 revenue, up 68%, without disclosing profit or loss figures.Mohalla Tech expects to close FY26 with around Rs 1,000 crore in revenue, up nearly 39% from Rs 720 crore in FY25, while cutting annual burn to about Rs 120 crore from around Rs 240 crore earlier, Sachdeva told ET. “We have about 600 million episodes watched every day across Quick TV and Moj,” he said.Artificial intelligence is helping microdrama companies cut production time and costs, making it easier to produce large volumes of content for tier-2 and tier-3 audiences. But it has also lowered entry barriers, triggering a rush of apps, including some that rely on racy or regulatory grey-zone content.Where's the money?For incumbents, the challenge is no longer just creating content but retaining and monetising users after the initial rush. Unlike audio, where Pocket FM already had a library and licensed catalogue, video needs a steady stream of fresh shows. “In microdrama, content supply is retention,” said an executive. “Users can binge through a library quickly.”“There’s adoption for microdrama. The category is generating about $1 million or $1.5 million a year in subscription revenues today,” said Anurag Ramdasan, partner, 3one4 Capital. “While players with large catalogues drive a lot of users to the platform, user acquisition in the industry is still ad-led. The players who can find a cheaper distribution metric will always have an edge.”Kotak’s note flagged content exhaustion as a risk, saying users can burn through libraries quickly, forcing platforms to add shows or features to reduce churn. For Pocket FM, the bet is now to deepen audio dramas and overseas monetisation. For Kuku and Mohalla Tech, microdrama remains central to their public-market story.