After TikTok, Micro-Dramas May Be China’s Latest Blocking Global Entertainment

When Jeffrey Katzenberg launched Quibi (short for quick bites) in early 2020, it was probably too soon. The company closed after six months, consuming approximately $1.5 billion in capital.

Fast forward four years, and the global market (excluding China) for microdramas, or ultra-short fiction content produced for on-the-go consumption, is said to be worth $2 billion annually. It is expected to double by 2025.

More from Variety

Like Korean webcomics, microdramas are digitally native content made for audiences using mobile devices. This may be one of the reasons why streaming services that rely on TV sets and PCs (like Netflix and Disney+) have thrived during COVID lockdowns, and microdramas have taken off as people start commuting and traveling for entertainment again. Most scroll vertically, like social media and unlike a book or magazine.

But China is the world leader, with a market size probably equal to the rest of the world. And it is reportedly growing even faster, possibly at a rate of 250% annually. Chinese state media reported that the industry’s gross revenue is $5.2 billion (RMB 37.4 billion) in 2023; This equates to approximately 70% of the country’s theatrical cinema market.

Market leaders in China are Kuiashou, which appeared in the short user-generated video before the microdrama began, and which listed on the Hong Kong stock exchange in early 2021, and TikTok’s Bytedance-owned sister Douyin.

Typically microdrama shows can consist of 60-100 episodes, and the term ‘episode’ is used loosely. Running time of 30-120 seconds per episode is typical. It’s basically a scene.

But with a key difference from user-generated Reels or Shorts on leading social media platforms, microdramas are professionally created content where storytelling happens in the right places.
Chinese tech giant Tencent, which aims to be a facilitator of microdramas, recently touted the genre as having a high level of creativity: “Vampires in love. A woman who unknowingly married a billionaire. A homesick Chinese jade teapot that bravely managed to escape from a museum. “A chef time-traveling to the Ming Dynasty – to cook up a storm, naturally,” he said as an example.

More skeptical viewers argue that the category is full of crude tales of revenge and cheating husbands. And the package often comes in overly processed and basic pieces; This is in stark contrast to premium series, which are native long-form content from mainstream broadcasters.

Earlier this year, Douyin hires iconic Hong Kong film director Stephen Chow (“Shaolin Soccer,” “Kung Fu Hustle”) to mentor a group of creators interested in the format.

At the APOS media and entertainment conference in Indonesia this week, a handful of Chinese executives were on hand to pitch the new version of quick bites to 550 decision-makers from global media conglomerates, Asian entertainment players and private equity investors.

Presenters included: Nan Yapeng, Vice President of Crazy Maple Studio and General Manager of overseas market leader ReelShort; Zhou Jian, CEO of MicroshowTime and founder of Playlet Short Drama Platform, Will Ning, chief legal officer of MegaMatrix and FlexTV, and Liu Jin Long, CEO of ShortMax.

More analysis came from Ronan Wong, co-founder of AR, a Hong Kong-based aggregator that also has a mission to bring together talent, represent microdrama studios, and produce and distribute new content across Asia.

“The microdrama market does not compete with broadcasters or TV channels, but offers TikTok or YouTube users a better storytelling and viewing experience,” Wong said. Diversity.

Arguably as disruptive as the shows themselves is the array of business models on offer. Monetization comes in ad-supported video on demand (AVOD), subscription (SVOD), and transactional (TVOD) varieties. Or a hybrid. The freemium model, which consists of a half-dozen initial free episodes that entice viewers and drive them to episodes that require some form of in-app payment, is quite common.

This makes them very similar to the dominant video game model in China (where game consoles are rare), and at $20-$40 per season, they can be more costly than monthly, recurring subscriptions. Other platforms cost $20 per week or $200 per year.

The business is still developing rapidly and could be considered high risk if production prices were not so low.
Production cycles are as short as two to three months, and costs per episode can be as low as a few thousand dollars. This means the barriers to entry are relatively low and non-traditional media players are jostling with established companies.

Katzenberg’s Quibi reportedly spends $100,000-$125,000 per minute on its shows, which have episodes of up to ten minutes each. With much less investment, China’s hit show “Unparalleled,” produced by Xi’an Fengxin Culture, reportedly grossed $14 million in its first eight days of release in August last year.

“With production taking place in just two months and return on investment (for some) within 60 days, the landscape feels like science fiction,” says Anne Chan Wong’s partner at AR.

In fact, distribution and marketing costs can be significantly higher than investments in production. AR calculates that gamers spend approximately 80% of every dollar of revenue on advertising and user acquisition expenses. The other 10% goes to content and the remaining 10% is used for the operation of the platform.

Still, there are signs that the format is being imitated in parts of East and Southeast Asia (less so in India) and the US, and that Chinese companies are exporting their business models. Reelshort, which counts Tencent and Baidu among its backers, is the largest microdrama platform in the US

Three major Chinese-backed microdrama apps were downloaded 30 million times on both Apple’s App Store and Google Play in the first quarter of 2024, according to analytics firm Appfigures, and 71 million internationally, Reuters recently reported. dollars in revenue.

“The industry’s unique production, marketing and operational approach challenges traditional content creation norms. Success now depends on improved data points and capturing mass sentiment; which makes constant iterations vital to monetizing the show,” said Wong.

Best in Variety