The Microdrama Boom: a Bloodbath in the Making

It feels like just one Quibi ago when microdramas were hailed as a savior to the sorry state of production in Los Angeles, giving out-of-work actors jobs and renting out soundstages otherwise hosting tumbleweeds. 

Indeed, the gold rush has produced a staggering amount of content. In just three months, the 16 leading vertical video apps outside China released 32,000 titles — more than 10,000 new shows a month.

But even 32,000 shows aren’t enough to guarantee success — or to yield even one show that would qualify as a category-defining “hit” that has permeated the larger culture (and thus prove the model).

The competition for viewers in a short period of time has become so fierce that microdrama apps, with alluringly cheap production costs, are spending half or more of their revenue on an expense I’ll tell you about below (hint: It has nothing to do with the actual shows). Some apps already are calling it quits. VeYou, launched earlier this year by Top Gun: Maverick producer Tommy Harper, is shutting down its standalone app on Nov. 6.

And looming over the entire business is — what else — AI. In China, where the phenomenon began, a whopping 91 percent of all microdrama releases in the third quarter were AI-generated, according to data from Owl & Co., the consulting firm led by Fox alum and Wondery founder Hernan Lopez. That’s a harbinger of what’s to come stateside, which trails about 18 to 24 months behind China on this format.

So is the microdrama gold rush already headed for a shakeout? Or, as Lopez believes, is the industry still one enormous hit away from changing everything?

The answer may depend on whether these companies can get one surprisingly expensive part of their business under control — before they run out of money trying.

Plus: I have a must-see list on the top-performing genres in verticals and no, it’s not all werewolves…