Xiaomi and Huawei's new battlefield: a billion-dollar battle for the short drama market

Xiaomi and Huawei, two giants, have recently taken eye-catching actions to enter the short drama market. Xiaomi is recruiting for a series of positions such as short drama screenwriters and post-production, clearly showing its determination to create high-quality short drama content. Huawei has launched a short drama application called "Short Drama Collection App" and tested the short drama payment function to explore new profit points through the payment model. Although the paths are different, they all show that traditional Internet giants are exploring the commercial potential of the short drama market.

The entry of Xiaomi and Huawei shows that the short drama market is becoming a field with great potential. According to the "2023 Short Drama Industry Research Report", the domestic short drama market size will reach 37.39 billion yuan in 2023, and it is expected to exceed 100 billion yuan by 2027. This growth trend has attracted the enthusiasm and increased investment of many traditional Internet giants. The entry of Xiaomi and Huawei into the short drama market is a new trend worthy of attention. Their actions and strategic intentions show their attention to this emerging field.

In the past two years, short short dramas have been very popular, especially this year. Recently, the industry has welcomed a new player. Xiaomi Group has posted information on recruiting short drama screenwriters and producers on the recruitment platform, which has aroused widespread speculation that it is preparing to enter the short drama field.

Recruitment information shows that Xiaomi is recruiting for short play scriptwriters, post-production, short video planning and directing and other related positions. Among them, the short play scriptwriter position offers a 13-month salary of 20-30K, only 1-3 years of work experience is required, and the education requirement is only a college degree. It can be said that this position has a "low threshold and high salary", which shows Xiaomi's urgency to hire people. In addition, the job descriptions of its "Product Operation Manager" and "Browsing Information Product Operation" also clearly mention the need to "be responsible for assisting in the research, testing experiments and product function development of internal innovation projects (such as videos, short plays, etc.)".

In fact, among the Internet giants, Xiaomi is not the only one to cross over to make short dramas. Previously, Baidu, NetEase, 360 and other companies have competed to enter this red ocean market. On May 22, Huawei launched a new "Short Drama Collection" quick application and started public testing (independent of Huawei Video). Why did this short drama, which was not of high quality in the eyes of film and television professionals at first, make traditional Internet giants have high hopes? It is because they saw the huge potential and value of short dramas in attracting traffic and increasing user stickiness.

1. It’s no surprise that “boss” Lei Jun plays short dramas. Xiaomi has already made plans.

Anyone who has watched short dramas knows that the overbearing CEO is the most popular theme. After Lei Jun officially released the Xiaomi SU7, netizens were happy that Lei Jun had turned the "cool life" and "cool male protagonist" into reality, which was widely discussed on social media platforms. In a previous interaction with actor Zhang Songwen, Lei Jun said he would give him a Xiaomi SU7. This interaction was jokingly called by netizens as a real-life interpretation of "the overbearing CEO fell in love with me."

In addition, at the first delivery ceremony of Xiaomi cars, Lei Jun personally opened the door for the car owners, which was very impressive. The car owners who enjoyed Lei Jun's service couldn't help but sigh: "The billionaire president opened the door for me, even the best stories don't dare to write like this." It can be seen that Lei Jun, who is worth tens of billions, has a "dominant president" image that is deeply rooted in people's hearts, which is very consistent with the theme and tone of the short drama. Based on this, it seems reasonable for Lei Jun, who is well versed in marketing, to lead Xiaomi into the field of micro short dramas.

In fact, Xiaomi has already made plans in the film and television field. In 2021, Xiaomi registered the "Shengcang Pictures" trademark and entered the film and television content industry. Industrial and commercial information shows that the legal entity of the trademark is Beijing Wali Culture Communication Co., Ltd., and the registered address is the Science and Technology Park in Changping District, Beijing (where the Xiaomi Smart Industrial Park is located). Goods and services include advertising for movies, TV commercial production, and commercial management of actors.

On April 3 this year, the official Weibo account of Shengcang Pictures released a message saying: "Shengcang Pictures has produced a new boutique short drama, which has been completed. New track, new breakthrough." After inquiry, Shengcang Pictures has invested in or released many film and television dramas (online movies), variety shows and short dramas since its establishment. For example, "Hi! Hot Mom", "Strike Black", "Deep in the Murder Case", etc., focus on the family's OTT large-screen scene. "The King of Hot Pot", produced by Shengcang Pictures and jointly launched by Xiaomi OTT (Internet TV), has a relatively large volume. As a continuation of the popular IP "The King of Barbecue", "The King of Hot Pot" has received high attention as soon as it was launched, and through the recommended position on the first screen of Xiaomi TV and the movie channel recommendation, it has reached more than 10 million family living room scenes.

△The filming of the short short drama "Fireworks" produced by Shengcang Pictures was completed. Source: Shengcang Pictures' official Weibo

Judging from the information disclosed so far, Xiaomi has multiple considerations in its layout of the short drama business. On the one hand, the short drama content will connect the software and hardware advantages of Xiaomi mobile phones, Xiaomi TV, Xiaomi Video, and Xiaomi OTT, and explore new commercialization paths for Xiaomi's Internet business in different scenarios.

On the other hand, short dramas have unique advantages in increasing brand exposure and user activity, and can strengthen the marketing of Xiaomi's various businesses and brand promotion.

2. Traditional Internet giants enter the micro-drama market, and their development paths are different

However, unlike Xiaomi's "silent development", Baidu and NetEase are much more active in the field of short dramas. As a top search engine platform in China, Baidu announced its entry into the field of micro short dramas in October 2021 and launched a micro short drama plan called "Breaking the Shell Plan", linking Baidu's ecological resources to incubate high-quality micro short drama content.

On the eve of the 2024 Spring Festival holiday, Baidu App and Haokan Video APP both launched "Short Drama" channels, and launched the "Spring Festival Short Dramas for Free" campaign to directly hit the pain points of a large number of users, using free viewing of high-quality short dramas as a gimmick to cultivate users' habit of watching short dramas on Baidu App.

△ Screenshot of Baidu App’s “Short Drama” channel

From the current situation, Baidu's micro-short dramas mainly started through procurement + self-production. Baidu App claims to have gathered thousands of high-quality short dramas, covering many themes such as sweet pets, time travel, counterattack, domineering pets, sadomasochism, rebirth, etc. These short dramas have achieved good data and influence. According to people familiar with the matter, micro-short dramas are regarded by Baidu as the most likely breakthrough point for improving user activity in addition to AI applications. This "bet" has its foundation. On the one hand, the 1 billion-level user base of all ages in the Baidu ecosystem has become the soil for the vigorous growth of various short drama themes. On the other hand, with the advantages of "search + push" integrated traffic aggregation and distribution, Baidu is definitely a traffic field that short drama players cannot ignore.

Among the traditional Internet giants, NetEase has the most comprehensive layout. Since 2023, various forces under NetEase have gathered and entered the short drama track one after another. In just over a year, at least three business departments of NetEase (NetEase Antelope, NetEase Youdao, and NetEase News) have been involved in the short drama business, which is enough to show NetEase's expectations for the short drama business. Within NetEase, short dramas are also listed as key projects of the group.

In 2022, the NetEase Antelope team in Hangzhou (NetEase Antelope is affiliated to NetEase Cloud Reading) was the first to test the waters in the short drama business. It can be said that it is the "first to try" department in the NetEase Group. In the short drama industry chain, NetEase Antelope mainly plays the role of the producer of short dramas, responsible for funding and bearing production costs, and the shooting and production of short dramas are the responsibility of the contractor. Backed by the online literature platform NetEase Cloud Reading, NetEase Antelope also plays the role of the copyright holder, exports novel IP, and is responsible for producing scripts. It can be seen that NetEase Antelope is involved in the three simplified links of short dramas (scripts, production, and delivery). NetEase Antelope is currently also the main department for the layout of the short drama business within the group.

According to Sanchuanhui Cultural Industry Observation, in 2023, NetEase's subsidiary NetEase Youdao also entered the short drama track, mainly responsible for the overseas business of short dramas, and relying on its specialty "translation" to help localize the content of short dramas. In addition, there is also a department within NetEase that is involved in micro-short dramas, that is NetEase News. As an old media platform, NetEase News mainly plays the role of a distributor, mainly responsible for the distribution of short dramas, and owns short drama mini-programs such as "Shuangwaiwai Small Theater", focusing on the domestic market.

In this micro short drama feast, Zhou Hongyi of 360, who is also good at marketing and short videos, was naturally not absent. In the navigation interface of 360 search, there is a fixed short drama area called "Sweet Shrimp Theater", which is the entrance to 360's micro short drama business. It can be seen that there are advanced on-demand and limited-time free short dramas, as well as a VIP area. According to Qichacha data, 360's short drama business started relatively early, but it was not taken too seriously before, and it was more like a "placeholder" mentality for the new business format. However, it was recently discovered on the Boss Direct Recruitment page that 360 Group's job recruitment also has a large number of short drama-related positions, and it is suspected that it is preparing to increase its short drama business.

△ Screenshot of 360 short drama business area "Sweet Shrimp Theater"

Why have the above-mentioned Internet giants entered the new trend of short dramas? In fact, the intention and logic are very clear. For many Internet companies that are trapped in peak traffic and weak growth, it is a matter of course and a top priority to compete for new traffic and find new business channels. What is certain is that the short drama business that relies on traffic has brought a spring breeze to Internet giants that need to find growth momentum.

In general, Baidu, NetEase, Xiaomi and other large companies have the following advantages in entering the short drama industry:

The first is the rich resources of online novels. Different from long and short video platforms, Internet giants are involved in the field of micro-short dramas, often from another perspective, that is, online literature. Baidu, NetEase, and Xiaomi are no exception. Baidu has an online literature platform, Qimao Chinese Network, based on which it launched short drama businesses such as "Qimao Micro-Short Drama" and "September Theater". NetEase owns the online literature company NetEase Cloud Reading, which has 60W+ massive novel resources, and a large number of online novels can be adapted into micro-short drama scripts. For example, many short dramas produced by NetEase Antelope are adapted from NetEase Cloud Reading IP. At present, the short drama scripts of Internet giants are mainly adapted from online novels.

Online literature platforms have a natural advantage in developing short dramas. The audience of short dramas highly overlaps with the target audience of online novels, and novel users are very likely to be converted into short drama users. What is not well known is that Xiaomi's built-in software Duokan Reading also has super rich novel resources. Based on these online literature resources, Xiaomi launched the short drama product "Duohua Short Drama" in 2022 to test the monetization model in the short drama field.

△ Screenshot of Xiaomi's short drama app "Duohua Short Drama"

Second, compared with small and medium-sized players, they have stronger financial strength. Compared with small and medium-sized players, Internet giants have capital advantages and relatively strong financial strength. This allows them to have a higher tolerance rate in exploring the new business of short dramas, and also have more room for independent play. The fact that three departments/subsidiaries of NetEase Antelope, NetEase Youdao, and NetEase News have all been involved in short dramas is the best proof.

Third, they are endorsed by big brands and have a good reputation. Compared with new players, Internet giants have certain brand advantages and user bases when they enter the short drama market. These giants have a large user base and many loyal fans. Users have a high level of awareness of these brands and have established a certain level of trust in them.

3. Hypothesis: Xiaomi has already started a micro-short drama, so how long will Huawei be able to stay behind?

The traffic competition between Xiaomi and Huawei has expanded from the mobile phone industry to the car industry. Now, the two "old rivals" are moving to a new track. Some time ago, a famous film and television planner made a guess in the program "Four Poisonous Uncles": Xiaomi will enter the micro-short drama market? Will Huawei be far behind?

The answer is yes. According to Sanchuanhui Cultural Industry Search, Huawei recently launched a new short drama collection APP, which brings users an unprecedented viewing experience. Huawei Short Drama APP is an application carefully created by Huawei's video department. Its core concept is "Watch a large number of short dramas". Huawei Short Drama APP also provides a paid short drama unlocking experience. Users can unlock more high-quality short drama content by recharging their accounts. At the same time, the APP also provides functions such as viewing history, account recharge records, and purchase records, so that users can view and manage their viewing records at any time.

△ Screenshot of Huawei's "Short Drama Collection APP"

Among the major domestic Internet companies, only ByteDance and Kuaishou have launched independent short drama apps. Huawei may become the third major company to launch an independent short drama platform.

It is worth mentioning that Huawei has a natural traffic entrance and has hundreds of millions of domestic users. After the launch of the Short Drama Collection App, Huawei can increase the exposure of its "own son" through "App pre-installation". According to the latest report from Canalys, in Q1 2024, Huawei's shipments in the Chinese mainland market reached 11.7 million units, with a market share of 17%. Assuming that all Huawei phones will be pre-installed with the "Short Drama Collection App" in the future, the growth potential of the Short Drama Collection App will be considerable.

Conclusion

As digital content consumption becomes increasingly popular, Internet giants will certainly not be absent from the nearly 100 billion market space. On the one hand, the rapid rise and potential of the short drama market have attracted the attention of large companies. Short dramas have the characteristics of low production costs, short cycles, and quick returns. For large companies, this is a relatively small investment area, and they can try to explore new business models and profit opportunities. In addition, short dramas have a wide audience and can attract a large number of users, bringing more traffic and user stickiness to the platforms of large companies. By getting involved in the short drama business, large companies can further enrich their content ecology and meet the diverse needs of users.

On the other hand, Internet giants have advantages in terms of capital, technology, user base, etc., and are capable of making in-depth layouts and developments in the field of short dramas. For example, large companies can use their strong technical strength and data analysis capabilities to provide support for the production, promotion and operation of short dramas; through their large user base and traffic advantages, they can provide a broader platform for the dissemination and commercialization of short dramas.

Xiaomi and Huawei, two giants, have entered the short drama market one after another. This move has not only attracted widespread attention in the industry, but also made people full of expectations and speculations about the future development of the short drama market. Of course, there are also views that Xiaomi, Huawei, 360 and other players are more of a "trial entry" mentality for short dramas - seeing the trend of short dramas, they enter the market with a small cost to try it out. If they can make money and become a new growth point, it would be the best. If they can't make money, it won't cause much loss to the company.

So, are the Internet giants getting involved in short dramas for fun or for real? As more of their business paths are revealed, this question will gradually become clear.