Microdrama industry overview: growth, China, unit economics

Size, growth and how to read the numbers

Omdia puts global microdrama revenue at $11bn in 2025 and forecasts $14bn for 2026 and $22bn by 2030. That series includes China, which Omdia says accounts for 83% of global revenue. Media Partners Asia measures the market excluding China. Its September 2025 vintage put that market at $1.4bn in 2024 reaching $9.5bn by 2030; its August 2026 vintage puts it at $2.7bn in 2025 and $3.6bn in 2026, reaching $9.5bn by 2031. The endpoint is unchanged between the two and the horizon has moved by a year, so the two vintages are not interchangeable. Sensor Tower measures a third thing again, consumer spend inside the app stores. Its 2025 figure is cited as $2.8bn outside China, up 116% year on year, and elsewhere as $2.98bn globally, up 115%; the two scopes have not been reconciled.

The three series are not alternatives to one another, and they are not directly comparable. Revenue in this category is published on three different bases: app-store consumer spend, gross in-app purchase value, and company revenue. Each captures a different slice of the money, and the app stores take a cut that separates the first from the third.

Scope differs as well. A China-inclusive figure and an ex-China figure are separated by the whole of the Chinese market, which on Omdia's estimate is most of the category. When two published numbers for the same year disagree, the basis and the scope usually explain the gap before the vendors do.

Where the audience is

Omdia's 2025 estimates of monthly active users put the United States first at 66m, followed by Brazil at 24m and Mexico at 20m. In Europe the United Kingdom leads at 8.2m, with Germany second at 4.4m.

The category's revenue concentration and its user concentration are not the same shape. Omdia places 83% of revenue in China while the largest single market outside it is the United States, and Sensor Tower ranks Germany fifth by revenue despite its smaller user base.

From paid coins to advertising

The paid-coin model, in which users buy tokens to unlock the next episode, built the two largest overseas apps, ReelShort and DramaBox. The largest app in China works differently. ByteDance's Hongguo (红果) is free and ad-supported, and has been reported at 100m daily active users and more than 300m monthly.

Its scale has put the coin economics under pressure elsewhere in the category. Free, ad-funded distribution and paid unlocking now sit side by side as the two ways the format is monetised, and the mix is shifting toward the former.

Unit economics

Growth has not translated into profit for most operators. At FlexTV, earlier filings put marketing at up to 71% of revenue; its FY2025 20-F gives selling expenses of 62% of revenue in 2024 and 47% in 2025, on a revenue base that fell about 28%. Variety, reporting from the MIP London market, quoted platform executives putting marketing at up to 90% of budget. Around 80% of operators are reported to be lossmaking, though that figure circulates without a named research vendor attached to it.

On those figures, acquisition spend rather than production is the dominant cost line in the business. Revenue growth and profitability have so far moved independently of each other.

Production cost and AI

AI-produced titles are reported to cost roughly $7k to $14k, a range that circulates without a named source, against $150k to $300k for a live-action equivalent. DataEye counts AI-made titles at 38% of China's top 100 in January 2026, up from 7% a year earlier.

Holywater, the operator of My Drama and My Muse, has disclosed matched-cohort figures from its own apps. It says AI-generated microdrama on My Muse converted at 23.6% against 23.9% for live-action, and retained as well or better on its flagship title. It says production time fell from 12 weeks to two, at more than ten times lower cost per finished minute, and that one team went from 20 to 200 finished minutes a month over eight months.

Those are company-claimed figures from a single operator and a single flagship title.

Engagement against the streamers

ReelShort users average 35.7 min/day on mobile, ahead of Netflix at 24.8 min/day, per Adjust and Sensor Tower figures published by ppc.land; other accounts credit the same figure to Omdia.

The comparison is one of intensity rather than reach. The same comparison puts ReelShort's US monthly active base at around 1.1m against roughly 12m for Netflix. That figure is hard to reconcile with third-party estimates of 50m to 55m monthly active users for ReelShort worldwide, with the United States its largest market, and the published accounts do not explain the gap.

Strategic capital

Established media and games companies have taken positions in the category. Disney has backed DramaBox, Fox has backed Holywater, Versant/NBCUniversal has backed GammaTime, Krafton has backed Vigloo and Kuku, and Katzenberg and a16z have backed Idilio.

Reported round sizes span a wide range. Vigloo, backed by Krafton, at $86m and Kuku TV at $85m, followed by Inkitt at $37m, Holywater at $22m, GammaTime at $14m, Idilio at $5.5m ($5m in an SEC filing) and Flick TV at $2.3m. Pocket FM's $103m sits above that band.

The pattern reads as validation and competition at once: the incoming capital confirms commercial interest in the format while adding to the number of funded operators chasing the same audiences.

Two content models

Two production approaches are visible in the market. The larger apps, ReelShort and DramaBox among them, commission high volumes of original titles built on repeating genre tropes, with speed to market as the operating advantage.

A second approach licenses existing television IP and reworks it in vertical form. RoseBerry Media's Epis app launched in July 2026 on reformat deals with A+E Global Media, All3Media International, Banijay Rights, Cineflix Rights and Fremantle, turning catalogue titles vertical; RTLZWEI has announced a vertical spin-off of its own running soap 'Berlin – Tag & Nacht'. The approach trades production volume and speed for recognisable titles and rights that already exist.

Who is watching in the West

Holywater has published audience data from its own two apps. It says the male share of My Drama's monthly active users rose from 1.1% to 30.3% over seven quarters, and the 22 to 27 cohort from 7.1% to 25.9%, a rise of 265%. It says 65% of its users have been watching the format for less than a year, and that 70% watch in bed.

On that data, the frequently used description of the microdrama audience as women aged 35 to 54 watching at night no longer matches the leading Western apps on gender or age. The night-time element holds.

The figures are company-claimed, cover one operator, and describe a self-selected user base. They are directional rather than a measurement of the market.