The news: Microdramas may be the next big thing on mobile, at least that’s what a new Hollywood startup is hoping.
MicroCo plans to use AI to help create 1- to 3-minute vertical-video shows meant for the mobile screens. Microdrama seasons would be 30- to 100-episode arcs—think telenovelas in short bursts.
The venture is focused on a freemium model: Consumers can watch the first few shows for free and then buy credits for more episodes, but the company might also rely on advertising for monetization.
MicroCo is trying to learn from predecessor Quibi’s failure. Episode costs of up to $125,000 a minute led to its downfall. MicroCo co-creator Lloyd Braun said AI will help cut costs.
Monetization opportunities: The format is gaining ground in the US. Millions of US consumers have downloaded Chinese microdramas, and analysts expect it to be a $10 billion business outside of China by 2027, per Sensor Tower data cited by The New York Times.
The US is a lucrative market. Even though it only made up only 8% of global microdrama app downloads in Q1, it accounted for 49% of the format’s revenues, per Sensor Tower.
Latin America leads in microdrama app downloads, covering 27% of the market.
Is vertical the future of viewing? TikTok popularized the format, and numerous platforms adopted the style, including YouTube Shorts, Instagram and Facebook Reels, and Snapchat. It’s a great time for MicroCo to capitalize on a growing market.
Key vertical stats:
- Gen Z prefers short-form videos over other formats, with 64% naming TikTok as their top platform.
- YouTube is leaning into its vertical venture, Shorts, on connected TVs (CTVs) by prioritizing them in its TV feed.
- Netflix is testing a vertical feed on its mobile app.
Our take: Microdramas are a growing venture and are ideal for the quick-hits crowd occupying social media. MicroCo could come out ahead if it can create and monetize buzzworthy content.
While brands have the opportunity to advertise within short videos, they might fare better creating their own microdramas to appease consumers who are tired of ads. Nike’s “You Can’t Stop Us” and BMW’s Met Gala microdramas entice consumers with compelling storytelling that doesn’t feel like advertising.