Warriors, time travel, successful sons-in-law making a comeback, and CEO's sweet love stories...
 
When you open a short video platform nowadays, you're bound to come across these intensely plotted and action-packed short video series.
 
This emerging video format, situated between movies and novels, typically lasts around 2-5 minutes per episode, featuring continuous storylines and multiple episodes, mostly presented in a vertical format commonly known as short dramas.
   
Once considered clichéd and melodramatic web fiction, these narratives are now sweeping across various video platforms. According to the "2020-2022 Micro Drama Development Observation Report," the total revenue share for micro dramas on major platforms, including Aiyouteng, Kuaishou, and Tencent, exceeded 1.5 billion RMB from 2020 to 2022, with over 600 million RMB in the first half of 2023.
 
As predicted by Xinwaner, the domestic market size for short dramas may surpass 20 billion RMB in 2023, equivalent to 66% of the domestic box office revenue in 2022. What was once considered a niche content format is now enthusiastically embraced by capital and the market, with platforms, producers, and actors all vying for attention through competitive scripts, production quality, and promotions.
 
Some astute individuals in China have leveraged this trend to extend their influence overseas. So, does the concept of short dramas hold up in international markets? Who are the key players, and what is their business model? What are the primary overseas markets, and what are their characteristics? In this observation, we delve into the wealth secrets of the global expansion of short dramas.
 
Analysis of the Current Situation of Short Dramas Going Global
 
In fact, short dramas began testing the waters abroad last year. The growth trend of overseas downloads for popular short drama applications, as tracked by data.ai, shows that these applications started their overseas trials in India and Southeast Asia from June 2022 and experienced a surge in downloads until May 2023.  
Reviewing the current players in the short drama overseas market, the majority are content-focused leaders. These include video platforms such as Aiyouteng and Kuaishou, online literature companies like Chinese Online and Xinyue, and small program short drama players represented by Jiuzhou Culture. Additionally, some individual players have entered the scene due to their optimism about the industry.
   
ReelShort, a player successfully implementing a business model, is boosting industry confidence on its own.
 
According to Sensor Tower data, ReelShort, a short drama product under Chinese Online, achieved a total download of 1.9 million in July 2023 on Google Play and the App Store, generating a monthly revenue of 6 million USD. This is within a year of its launch. AppGrowing also noted that ReelShort recently topped the U.S. iOS entertainment free list, surpassing TikTok in downloads.
   
Overseas short drama products can be categorized into translated dramas and original dramas. The former involves reworking domestic short dramas through translation and dubbing, resulting in lower costs. The latter employs local actors and production teams to create series tailored to local tastes, incurring higher costs.
 
According to the "TikTok Short Drama Overseas Marketing Strategy" report, the current products combining original and translated dramas account for a slightly higher proportion, about 43%.
  Business Logic of Short Dramas Going Global
 
Firstly, the market appeal of short dramas is evident. The compact and thrilling plotlines cater to users' fragmented reading habits.
 
In just a few minutes per episode, viewers are immersed in the essence and highlights, making short dramas increasingly addictive. The success of short dramas domestically implies that a considerable number of Chinese audiences are willing to pay. Moreover, the relatively lenient overseas content review system provides more creative space for short dramas.
 
Secondly, short dramas have a lower entry barrier. Compared to film and television productions, short dramas require less investment, show results quickly, and have shorter return cycles. Taking translated dramas as an example, with the integration of AI translation and dubbing tools, the production service chain is well-established, with costs mainly concentrated on purchasing copyright and promotion.
 
Lastly, the business monetization model for short dramas is still evolving, primarily focusing on single-episode payments, subscription memberships, and advertising revenue. Under the single-episode payment model, users can usually watch the first 10-20 episodes for free, while subsequent episodes need to be unlocked by purchasing coins within the short drama app, such as ReelShort, FlexTV, and GoodShort.
 
In the case of ReelShort, spending $15.99 can roughly allow viewers to watch a 60-episode short drama, equivalent to around 2 RMB per episode.
   
The subscription membership model involves users becoming quarterly or annual members after recharging a certain amount, granting them unlimited access to short dramas on the platform, such as GoodShort. Advertising revenue refers to in-platform advertising and product placements within the series.
 
According to industry insiders, current overseas short drama advertisers are mainly from industries such as real estate, banking, hotels, and car rentals, differing significantly from the consumer product-oriented product placements prevalent in domestic series.
 
 
Primary Markets and Characteristics
 
Currently, the consumption of short dramas overseas is concentrated in Europe, the United States, and Southeast Asia.
 
According to the "TikTok Short Drama Overseas Marketing Strategy" report, the top five choices for the overall short drama market are the United States, the United Kingdom, Canada, Thailand, and Australia. Among these, the United States is the preferred destination for short dramas going global.
   
Regarding content performance, love stories are universally popular. However, due to different historical and cultural backgrounds, users in different regions have varying interests in specific genres. In Europe and the United States, users demand high localization and fidelity in terms of actors, scenes, and favor female-oriented themes such as sweet romance, tragic love, and family conflicts. Conversely, male-oriented genres like successful sons-in-law, historical time travel, and urban fantasy struggle to gain traction in these markets.
 
In Southeast Asia, where the Chinese population is substantial, user preferences are similar to those in China, allowing creators to consider replicating finished domestic short dramas. Male-oriented genres like warriors, successful sons-in-law, and grassroots comebacks have a significant market, especially plots involving CEOs, love struggles, and conflicts between mothers-in-law and daughters-in-law.
 
In Latin America, users favor betrayal, twists, and suspense, with genres like gangster and religious themes having a certain user base in Brazil.
 
In summary, if short dramas in China are like a blazing fire, according to ITNIO, they are still in a relatively early stage overseas, with ample market space for exploration.
 
However, investors need to be cautious about risks, especially with the lower entry barrier for translated dramas. The influx of too many players in a short period could lead to a crowded race. Later on, with the maturation of the overseas short drama market, investors also need to be vigilant about the entry of major players like Netflix, known for producing high-quality long-form videos, which could potentially compress the space for survival.