Vertical Observer

The vertical-drama business, sourced
UPDATED 23 October 2026 216 REPORTS · 172 COMPANIES

Guide

How do microdrama apps make money?

Microdrama apps make money in three ways: selling coins that unlock episodes, selling weekly or yearly subscriptions, and showing advertising in free-to-watch apps. The largest apps combine them. User acquisition is a heavy cost: selling expenses equalled 47% of FlexTV's 2025 revenue, per its annual filing with the US Securities and Exchange Commission.

By Vertical Observer Published

Coins and pay-per-episode

The paid-coin model, in which viewers buy virtual coins to unlock episodes, built ReelShort and DramaBox, the two largest overseas apps (market overview). Germany's Snaxx, due to launch on 1 November 2026, describes the mechanism: the first episodes of each series are free, after which viewers either unlock single episodes with pre-purchased coins or subscribe (Snaxx launch). Under coin unlocks, the total cost of finishing a series is not fixed at the point of entry, a contrast drawn in coverage of the UK pay-per-view service Amavizion, which sells a season outright (Amavizion pricing).

Most large apps sell coins alongside other products. ReelShort sells coin packs and in-app purchases and offers ad-unlocked episodes. NetShort sells coins, subscriptions and in-app advertising through Pangle, and ShortMax combines coins with advertising.

Coin pricing has drawn regulators' attention. China's Order No. 16 requires clear disclosure of charging information for paid content and forbids algorithm models that induce addiction or excessive consumption. The EU KIDS Act, proposed by the European Commission on 17 September 2026 and not in force, would require purchases made with virtual currency to display their value in real money for minors on social networks and video-sharing platforms; a standalone coin-funded app is not among the services it lists.

Subscriptions

Subscriptions run alongside coins at the largest apps and replace them at some newer ones. DramaBox sells a subscription at about $20 a week. Holywater says subscription accounts for about 70% of revenue at its apps, which include My Drama, with advertising and in-app purchases making up the rest (company).

Newer apps have tried flat pricing. Sweetz in France lists weekly and yearly passes with no coin tier in its App Store listing. SoonShot in South Korea says more than half of its active paying users are on annual plans, with monthly subscription retention of about 70% (company; SoonShot metrics). EiLiN in Germany says it will not bill per episode with coins.

Published microdrama subscription prices

Published microdrama subscription prices
AppPriceNotesBasis
LimeShorts (ByteDance)$20 a week or $200 a yearPay-per-episode coins as an alternativereported
SoonShot$9.90 a month or $39 a yearMore than half of active payers on annual planscompany
Sweetz€4.99 and €6.99 a week; €39.99 and €49.99 a yearNo coin tier in the App Store listingcompany
Snaxx (Black Forest Studios)€4.99 a month with ads; €9.99 withoutSingle episodes also unlockable with coins; not yet on salecompany
EiLiNUnder €15 a month, plus season passesNo per-episode coin billingcompany
Amavizion£1.49 for a full season, paid onceShambles: 36 episodes, 45 minutes in totalcompany

Advertising and free-to-watch apps

The third model gives episodes away and earns from in-app advertising, known in the trade as IAA. In China, ByteDance's Hongguo leads on this model, with 356m monthly active users in May 2026 on QuestMobile's estimate (Hongguo's May 2026 user figures). Kunlun Tech runs both models: FreeReels is free with in-app advertising, while DramaWave sells a VIP subscription, coins and advertising. Kunlun said monthly gross billings at the two apps exceeded $65m at the end of June 2026 (Kunlun Tech results). TikTok's PineDrama opened free and ad-free, has since begun testing advertising and coins, and accounted for more than half of 63bn views tracked by Owl & Co in the third quarter of 2026.

Advertising is also growing inside some paid apps. At FlexTV, advertising revenue rose to $1,468,800 in the first half of 2026 while in-app purchase revenue fell 32% to $8,467,700 (Mega Matrix H1 2026). In Dentsu's 2026 survey, 35% of viewers said they watch microdramas only for free on social media.

Brands also pay for production directly. TikTok launched Mini Dramas for brands on 1 July 2026, and Channel 4's first microdrama was made with Sol de Janeiro. In Germany, the trade site MikroDrama.de reported on 3 September 2026 that brand budgets finance most local microdrama production (brand funding).

What is a paying user worth?

Filed user economics come mainly from one listed pure-play operator. Mega Matrix, which runs FlexTV, reported average revenue per user of $3.42 for 2025, up from $3.15. In the first half of 2026 it counted 309,973 paying users, with average revenue per paying user of $27.32, down from $34.16 a year earlier.

Third-party estimates show revenue concentrated in developed markets. Diandian put revenue per download between August 2023 and June 2024 at $4.70 in the United States, $2.30 in Europe and $0.70 in South-East Asia (estimate). Sensor Tower estimated the United States at 49% of global short-drama app in-app purchase spending in the first quarter of 2025, about $350m. Lumikai put average revenue per paying user in India at about $15 in 2025, against about $35 for streaming services (estimate).

A Snap-commissioned Ipsos study found Snapchat users who watch short dramas spending more than $50 a month on average on short-drama platforms; the figure is a survey response rather than measured spending, and the research was commissioned by a company that sells advertising to short-drama apps (Snap and Ipsos).

Where the money goes: marketing

Operators and trade reports describe user acquisition, rather than production, as the dominant cost line. Timothy Oh of COL Group put a series' production cost at $150,000 to $250,000 and said marketing budgets can exceed $1m, because viewers are served opening episodes directly in social feeds rather than reached through conventional publicity (COL Group interview). Variety, reporting from the MIP London market, quoted platform executives putting marketing at up to 90% of budget (reported).

Filings put numbers on it. FlexTV's selling expenses were $12,301,300 in 2025, or 47% of revenue, down from $22,391,900, or 62%, a year earlier, against a revenue base that fell about 28% (FlexTV FY2025). COL Group's selling expenses were RMB 254.2m in the first half of 2026, against group revenue of RMB 577.9m. Kuaishou's results for the period to 30 June 2026 reported that marketing spend driven by short plays more than doubled year on year.

The bills reach the ad platforms. In an arbitration COL Group disclosed on 24 September 2026, an advertising agency claimed $12,119,538.43 in unpaid Facebook and TikTok advertising fees for October 2025 to February 2026 from COL Group's FlareFlow unit, a claim the group contests (FlareFlow arbitration). Mintegral puts the cost per install in Europe at 5.9 times the Android baseline. Shortical arranged $100m of non-equity user-acquisition financing with PvX Partners in July 2026.

Are microdrama apps profitable?

Filed results show losses giving way to profit at some operators in 2026, on narrow evidence. ReelShort's operator, Crazy Maple Studio, posted a net loss of more than RMB 85m for 2025 and a net profit of RMB 55.7m for the first quarter of 2026, per figures disclosed by COL Group, which holds 49.24% and does not consolidate it (COL Group H1 2026). FlareFlow's 60.3% net margin in the first half of 2026 sits on an entity with negative net assets; DataEye read it as most likely an artefact of prior-year spending converting into current-year profit, and the filing itself says only that the platform reached monthly operating break-even ahead of schedule (FlareFlow margin).

Elsewhere the picture is contested or loss-making. DramaBox's profitability is disputed: press reports describe it as profitable, while the chairman has put the segment's net margin below 1%. Kuku TV in India reported a net loss of ₹153 crore on revenue of ₹242 crore for FY2025. More filed figures are in the filings table and microdrama funding.

Filed revenue and profit or loss at microdrama operators

Filed revenue and profit or loss at microdrama operators
OperatorPeriodRevenueProfit or lossBasis
Crazy Maple Studio (ReelShort)FY2025RMB 5.72bn (about $805m)Net loss of more than RMB 85mofficial
Crazy Maple Studio (ReelShort)Q1 2026RMB 1.57bnNet profit RMB 55.7mofficial
FlareFlow (COL Group)FY2025RMB 352.5mOperating loss RMB 469.4mofficial
FlareFlow (COL Group)H1 2026RMB 252.7mNet profit RMB 152.4m; net assets minus RMB 305.2mofficial
FlexTV (Mega Matrix)FY2025About $26.1mNet loss about $34.3mofficial
FlexTV (Mega Matrix)H1 2026$10,471,500Net loss $6,302,500official
Kuku TVFY2025₹242 crore (about $28m)Net loss ₹153 croreofficial

Frequently asked questions

How do microdrama apps make money?

Through three revenue lines: coins that unlock episodes, weekly or yearly subscriptions, and advertising in free-to-watch apps. The largest overseas apps, ReelShort and DramaBox, were built on paid coins and also sell subscriptions or ad-unlocked episodes. ByteDance's Hongguo, the largest platform in China by users, is free and funded by advertising. Brands also pay for productions directly.

Are microdrama apps free?

Some are. Hongguo in China and FreeReels outside it are free and funded by in-app advertising, and TikTok's PineDrama opened free and ad-free before testing advertising and coins. Paid apps also offer free routes: ReelShort and GoodShort let viewers unlock episodes by watching ads. Dentsu found 35% of viewers watch microdramas only for free on social media.

How much does a microdrama subscription cost?

Published prices vary widely. DramaBox sells a subscription at about $20 a week, GoodShort lists VIP tiers at $5.99 to $19.99 a week, and ByteDance's LimeShorts is reported at $20 a week or $200 a year. Newer apps price lower: SoonShot at $9.90 a month or $39 a year, and Sweetz from €4.99 a week. EiLiN in Germany plans a monthly subscription under €15.

How much do microdrama apps spend on marketing?

Filed figures give a partial answer. FlexTV's selling expenses were $12,301,300 in 2025, or 47% of revenue, down from 62% a year earlier, per its annual filing. COL Group's selling expenses were RMB 254.2m in the first half of 2026, against group revenue of RMB 577.9m. Variety, reporting from the MIP London market, quoted platform executives putting marketing at up to 90% of budget.

Are microdrama apps profitable?

A few report profits, on narrow evidence. ReelShort's operator posted a net profit of RMB 55.7m for the first quarter of 2026 after a 2025 net loss of more than RMB 85m, and FlareFlow reported a first-half 2026 net profit on negative net assets. FlexTV and Kuku TV report losses. DramaBox's profitability is contested.

What is IAA in microdrama?

IAA stands for in-app advertising: the app is free to watch and earns from ads shown to viewers, instead of selling coins or subscriptions, which are known as in-app purchases (IAP). ByteDance's Hongguo, at 356m monthly active users in May 2026 on QuestMobile's estimate, is the leading free IAA platform in China. ShortMax combines IAA and IAP revenue.

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