Short dramas are gaining momentum.
With each episode lasting 1-3 minutes, a creation cycle as short as 3 days, and filming completed in as fast as 7 days, earning a staggering 100 million in 8 days... These data vividly outline the exciting reasons behind the short drama/micro-drama industry - short cycle, low cost, quick and lucrative returns, making it another gold rush target favored by the public, the market, and capital in 2024.
While this wave of enthusiasm sweeps across the country, many platforms and producers are also turning their sights to the overseas market, doing business with "foreigners." Whether it's modern-themed plots like marriage before love, sweet romance, tragic love, or love stories with billionaires, or high-drama, high-visual-impact themes like werewolves, vampires, etc., they are all "virally" surging towards overseas audiences.
"The current overseas micro-drama market consumes (amount) between USD 800,000 to USD 1 million a day on average, and it may be even more on weekends. The average daily consumption has doubled or tripled since the middle of last year," revealed Nick, the editor-in-chief of a short drama platform, in an interview with EqualOcean. The enormous audience base and astonishing willingness to pay continuously drive the "wealth creation myth" of overseas micro-dramas to a new climax. "Just at the beginning of this year, at least 50 large, medium, and small companies entered the market, and the number is still growing," according to Guohai Securities' forecast, the central hub of the offshore short drama market is about USD 36 billion.
However, at the current time, with giants lurking around and "internal competition" imminent, how should entrepreneurs and content creators seize the opportunity to enter the market? EqualOcean interviewed several practitioners in the overseas short drama industry, attempting to glimpse into the new trends in industry development from the perspectives of production, screenwriting, platform operation, and producers.
Going Overseas: The New Route for Short Dramas
In 2021, domestic video platforms like iQIYI were the first to make efforts, attempting to launch international versions of their apps and increase international visibility while also releasing vertical short dramas on platforms like YouTube and TikTok. At the same time, Kwai's overseas version, Telekwai, launched micro-drama brand. However, their attempts did not cause much of a stir at that time.
It wasn't until August 2022 that the short drama platform app ReelShort, focusing on the North American market under Crazy Maple Studio, was launched, that the trend of short dramas going global began to take off. In October of the same year, another leading company in the overseas web novel market, Anyue Network, also launched FlexTV, mainly targeting Southeast Asian markets such as Thailand and the Philippines, achieving a more localized production.
After experiencing the exploration period of the first-generation "boss drama," in July 2023, ReelShort's launch of two micro-dramas closer to the preferences of overseas audiences, "Fated To My Forbidden Alpha" and "The Double Life of My Billionaire Husband," officially ignited the enthusiasm of overseas viewers, even surpassing TikTok multiple times, reaching the top of the free entertainment rankings on the US iOS charts, achieving a powerful breakthrough. According to TechCrunch, on November 11, 2023, ReelShort's net income after deducting app store fees was USD 459,000, approximately CNY 3.28 million. As of November 17, the cumulative net income had exceeded USD 22 million, approximately CNY 160 million.
Seeing the prospects and "money-making" potential of overseas micro-dramas, many domestic web novel companies and top short drama production companies have started to focus on overseas markets. In the mid and late 2023, platforms such as GoodShort, MoboReels, Mini Episode, ShortTV, 99TV, and pandavmcn successively launched overseas versions. Dotc United Group, which has been focusing on overseas web novels for 6 years, also entered the market with DramaBox in April of the same year, after seeing the huge growth potential of overseas short dramas.
With this, the overseas short drama market has entered a stage of explosive development. According to SensorTower, the total downloads of leading short drama platforms reached 28.23 million in 2023, and the net revenue exceeded the USD 50 million mark, reaching USD 56.71 million, achieving explosive growth.
Seizing the Opportunity: Understanding the Market and Localization
The rapid rise in the popularity of overseas short dramas even surprised practitioners.
"In late 2023, overseas short dramas were actually at a stage where everyone thought the prospects were good, but it was far from being as crazy as domestic short dramas. At that time, we were shooting in Romania and felt this very rapid change. People kept calling to ask if we were still shooting, if our schedule allowed for another one, and so on. When we returned to China later, short dramas suddenly became an industry that everyone was excited about," shared Zhu Guli, content director and producer of Zhi Tao Films, with us. Upon closer examination, the reason for its rise in the overseas market may be attributed to the joint efforts of the times, the market, and capital.
For example, "fragmentation" - one of the most typical features of our era, is the biggest factor in the rise of the short drama industry. People have neither the time nor the interest to watch long videos anymore. "Watching a movie in one minute, finishing a TV series in three minutes" is becoming a new fashion. In this situation, the emergence of short dramas with compact plots and strong atmosphere quickly captures the audience's emotions in a few minutes, keenly grasping the audience's "enjoyment" points.
Several interviewees also mentioned TikTok as a driving factor. With platforms like TikTok becoming popular worldwide, user engagement is increasing, reshaping users' information browsing habits: from primarily searching and discovering long texts and videos to preferring precisely targeted short video content. Users' attention and time are becoming more fragmented.
In addition, according to Nick, the editor-in-chief of an overseas short drama platform, benefiting from the increasingly mature short drama industry in China, practitioners in the industry have become more proficient in the entire chain and closed-loop business model of short dramas. Content has also appeared that can be accepted both domestically and internationally, and performance methods that have been successfully verified in the domestic market have accumulated enough funds. Therefore, they are gradually trying to expand overseas. "If this had happened two years ago, or even just a year ago, it might not have been feasible."
"The slight decline in the quality of creative works in the European and American film and television industry, coupled with the Hollywood strike, has also had a certain impact on the development of the short drama/micro-drama industry, giving Chinese practitioners some space," Zhu Guli added. "The huge audience base and their strong consumption power in overseas markets, especially in North America, are also important factors supporting the rapid development of the (overseas short drama) industry."
Same but Different
The "Mary Sue"-style sweet romances and rapid plot twists always trigger a dopamine rush in the minds of viewers worldwide; however, due to cultural differences, audiences in different countries have slightly varying preferences for short drama themes, keywords, and styles, even with similar plotlines. Therefore, understanding the cultural nuances and consumption habits of overseas markets and ensuring content localization becomes crucial, a topic repeatedly emphasized by several interviewees involved in various aspects of the overseas short drama industry.
For example, Huang Mingxiao, the founder of Zhi Tao Films, and her team expressed during interviews that the fast pace, multiple plot twists, and strong suspense are the reasons why short dramas are popular domestically. However, after going global, these elements might not resonate with overseas audiences. There is a different set of preferences abroad. Huang believes that a successful overseas short drama needs to feature lead actors who fit the foreign aesthetic standards, with good chemistry between them, sparking audience interest in their story and emotional connection.
Moreover, in terms of plot development, successful overseas short dramas typically have a slower pace, which differs significantly from the fast-paced nature of Chinese productions. Therefore, directly transplanting the domestic short drama model abroad is not advisable. According to Zhu Guli and EqualOcean, short dramas are often consumed during relaxation or solitary moments, or when there's a need for emotional companionship, especially among female viewers. Thus, they emphasize aesthetics, lighting, and visual quality, with music leaning towards lyricism. Audiences prefer soft and comfortable scenes, necessitating the creation of entirely different short drama products. Once viewers are immersed in the content and feel a connection, they are more willing to pay for subsequent episodes or even the entire series.
In addition to comprehensive adjustments to the script, achieving content localization also involves making the team as localized as possible because foreigners understand foreigners best.
ReelShort serves as an excellent example. By bringing in foreign screenwriters to help produce works that better suit local preferences and habits, the platform gradually found themes that resonate with the North American market, such as werewolves. After the series became a hit, ReelShort increased its investment in this theme. Some media reports even mentioned that it engaged the Hollywood production team of "The Wandering Earth" to shoot werewolf short dramas and produce fantasy effects. This approach has enabled ReelShort to outperform other short drama teams in terms of content and revenue.
Huang Mingxiao also understands this point well. As the first Chinese-controlled European short drama production team, the Zhi Tao Films team has brought together film and television talents from China, Poland, Hungary, Germany, and even signed with MyCasting, an overseas film and television casting team. They even set up filming scenes in Romania, known as the "land of vampires." In interviews, Zhu Guli shared that to cultivate localized thinking among screenwriters, they not only have them watch a large amount of American cultural film and television content, especially scenes that interest American women with the "Mary Sue" feel, but also arrange for them to travel abroad as much as possible. The team believes that immersion in short dramas is key to allowing audiences to relax and immerse themselves in the short drama world. Only by continuously training screenwriters to construct imagination in their minds can they produce more short dramas that are in line with local cultures and gain more bargaining power in negotiations with platforms.
A highly localized team implies that overseas short dramas are inevitably moving towards boutique development. Currently, the overseas short drama track is undergoing increasing internal competition and is beginning to "normalize" and become more like Netflix. According to Du Zhiqiang, a screenwriter for a short drama platform, overseas short dramas are richer in content and have a higher level of sophistication, resulting in higher production costs. Therefore, in the face of significantly increased costs, increasing audience stickiness and achieving long-term profitability are key to the success of short dramas going global.
One Step at a Time
Everything about overseas short dramas is still in its infancy. Keywords like dividends, sudden wealth, huge profits, and daily income of over 100 million yuan may continue to emerge, but the reality requires a splash of cold water: this industry is still in flux and faces many challenges, including a long profitability cycle, limited reach channels, difficulty in maintaining traffic, and high user acquisition costs; overseas short dramas are far from being a guaranteed profitable and highly certain business.
After interviewing multiple practitioners in the overseas short drama industry, EqualOcean has also summarized some suggestions in the hope of providing some reference for entrepreneurs who want to enter this field.
Firstly, do not change the business model arbitrarily. Currently, the business model of the overseas short drama industry is relatively mature. It has undergone the transition from domestic to overseas development, and some details have been perfected through the practice of predecessors. "There are no major problems with the current development path." If this business model is changed at will, including the length of video content, traffic distribution, payment mechanisms, and even the entire production chain, everything will need to be changed.
Secondly, long-term thinking and localization are crucial. "Overseas short dramas are a blue ocean, but they require long-term thinking," Nick told EqualOcean. Continuous cultivation in a certain field will eventually produce some hit works, thus ensuring survival in this industry. "The core of short dramas going global lies in understanding the local narrative framework and the true emotional needs of users. Understanding these is not difficult, as it can be learned based on the feedback from a large number of short drama works that have been online previously and continuous feedback," screenwriter Du Zhiqiang told EqualOcean. He emphasized in the interview that "there are no shortcuts to this. Only through practice can you understand the true taste of the other party, and then you can produce works that are both imbued with Chinese cultural characteristics and in line with local tastes."
Thirdly, as newcomers, it is best to choose markets that are similar to China, such as Southeast Asia, and themes with low trial and error costs. "Narratives mainly aimed at women, focusing on romantic love, including werewolves, vampires, and campus themes, can all be tried. These are all themes that have been verified in the European and American markets previously," Nick shared with us. "You have to do the first step well to have a chance to try the second step; confidence needs to be accumulated slowly, so don't start with niche themes right away, as you might just end up losing money." Wang Xiaoshu, founder and CEO of Jia Shu Technology, also advised during a media interview, "North America is now dominated by big companies and is already a red ocean. If your company's strength is not that strong, it's best to choose a country and language region that suits you. The overseas market is quite fragmented, so there are still opportunities."
Fourthly, overseas short dramas burn more money, so it's essential to have sufficient ammunition. Currently, the production costs and barriers to entry for overseas short dramas are increasing. There are higher requirements for the quality of content, professionalism of actors, and fidelity of scenes. "Last year and this year, the average filming period for overseas short dramas was around 10 to 15 days; however, costs have increased significantly. The production costs in Europe, America, and Australia were approximately between USD 150,000 and USD 200,000 last year, but now the production costs of many dramas have reached around USD 300,000," Mr. You, the operations director of Jia Xian Culture, revealed to EqualOcean during an interview.
Finally, determination and a clear strategic vision are crucial. "Overall, our industry still values certainty. Before starting, you really need to have a very good content reserve. If you don't have a particularly confident grasp of the content and the entire business chain and business model aren't very clear, don't rush into it," Nick told EqualOcean.
Bottom Line
During the interviews, industry insiders generally believed in the vast potential of short dramas going global, expecting 2024 to be a year of continued expansion in the trend of going global and cultural output. However, the answer to the question, "Is this a good business?" is not entirely consistent. And that's reasonable. In such a nascent industry with the potential for significant returns, there will always be those who enter with a purely profit-driven mindset, leading to the inferior driving out the superior and rampant industry chaos. Standing amidst the current chaos, no one can provide a definitive answer.
As Nick said during the interview, "This industry needs ambitious and capable people to pioneer it, rather than just coming over to cash out and cut the grass; this would be very damaging to the entire industry, including platforms and content." At the same time, some industry insiders are calling on Chinese practitioners of overseas short dramas to band together, raise their profile, and "only when the audience for short dramas grows will Chinese people have a greater influence in the vertical short drama industry," Zhu Guli stated.