Douyin, Kuaishou and Weibo are full, iQiyi, Youku, Tencent and Mango TV are chasing them. Who will run wild in the short drama industry in 2023?

Today, short dramas are popular. Not only are WeChat, Douyin and Kuaishou monopolizing the market, but traditional video platforms such as iQiyi, Youku, Tencent Video and Mango TV have also joined the short drama market, and a large number of independent short drama apps have emerged. In the new year, who will take the lead in the market?

After her parents were murdered, the heroine changed her identity and became the concubine of the enemy. The father and son fought over it and became estranged, playing a cat-and-mouse game of revenge...

The delivery boy turned out to be the heir of a wealthy family. Beautiful women, luxury houses and huge sums of money fell from the sky. He fired his boss, slapped his ex-girlfriend in the face, and became the richest man in the world...

These are the classic plots in the once popular "electronic pickled mustard tuber" - a short micro-drama.

Themes such as a domineering president falling in love with me, a life with a "golden finger", and tearing apart enemies after rebirth are common in online literature. Nowadays, "exaggerated" and "dog-blooded" plots are once again setting off a trend in the field of micro-short dramas. A large number of audiences can't stop watching and are willing to pay money to unlock the subsequent plots.

"Finish the script in 7 days", "Film 100 episodes in a week", "Sales exceeded 100 million in 8 days", just a few key sentences can create all kinds of "wealth myths" in the short drama market.

According to the iiMedia Research "2023-2024 China Micro Drama Market Research Report", the scale of China's online micro drama market is 37.39 billion yuan, a year-on-year increase of 267.65%. In the third quarter of 2023 alone, the number of Chinese online micro dramas released reached 150, nearly twice the total for the whole year of 2022. By 2027, the market scale will exceed 100 billion yuan.

The film and television industry and the stock market, which had been sluggish for a long time, were also strongly boosted by the explosive popularity of short dramas. In the short drama track, online literature platforms were the first to transform and "take the lead". Weibo, Douyin and Kuaishou took advantage of their natural media advantages to reap profits. iQiyi, Youku, Tencent Video and Mango TV entered the market with their regular troops. MCN agencies, live broadcast platforms, film and television companies, etc. all entered the market, vowing to get a piece of the pie.

With the popularity of micro-short dramas, illegal phenomena such as vulgarity, distorted values, and malicious hype have emerged one after another, seriously affecting the healthy development of the micro-short drama industry. It has also led to the fall of the regulatory hammer. Weibo and Douyin have conducted self-inspections and corrections, and removed the dramas from the shelves for rectification. The industry has ushered in a new turning point in development.

So, in 2023, which companies behind the popular short dramas made money?

1. Online writing companies transformed into short drama production and quickly became the top companies

Mini Program short plays were derived from online literature video formats. In the early days, most short plays were adapted from novels, and only later did original scripts gradually appear.

In the past, the main audience of online literature was male readers who lacked reading experience and had low requirements for the quality of online literature. Early short dramas also harvested this type of "audience who lacked experience in watching movies and TV series and had low requirements for video quality", mainly targeting the sinking market.

The overlap rate between new media novel readers and users of mini-program short dramas is as high as 80%. This is why online literature companies were the first to enter the short drama market. They control the content and know the user's preferences.

The payment model of short dramas is similar to that of online articles. The core goal of short dramas and online articles is to provide emotional value. In novels, a cool point is set every 200,000 words to create a payment point, and usually charging starts from the 20th chapter. Similarly, short weekly usually has 3 to 4 payment points, and charging starts from the 10th to 13th episodes.

Similar to novels, the commercialization of short dramas mainly adopts the recharge + distribution model. The producers sell the short dramas to video platforms, and then the platforms find distributors to place advertisements to attract audiences to recharge. Finally, the profits are divided according to the audience recharge amount and the distribution ratio. Therefore, the money-making logic of short dramas is: low-cost production + huge amount of capital investment and publicity + high unit price charges.

Image source: Guolian Securities

Guolian Securities Research Report mentioned that the main participants in the paid short drama value chain include content copyright providers, shooting and production teams, copyright holders, and distributors. Among all the costs, the most important part is the streaming cost, which accounts for nearly 85% of the cost.

Zhou Qing, who is in charge of the investment in short dramas, told us, "Platforms often decide the investment cost based on the actual output ratio. For example, if you invest 100,000 yuan first, the ROI generally reaches about 1:1.5. If the income can reach this profit target, then you can continue to invest. If not, you will abandon the project and the corresponding short drama will basically fail."

Since short dramas are an industry that is completely oriented towards the C-end, the short video ecosystem has a more accurate user portrait. After introducing the payment capabilities of WeChat and Alipay, short dramas can easily achieve the path conversion of "buying volume push-user payment-data feedback".

Short video platforms and WeChat mini-program platforms, led by Douyin and Kuaishou, have great control over the main channels for short drama broadcasting and investment, and are the "shovel sellers" who can make a profit regardless of drought or flood, while content providers bear most of the risks in the market.

Because streaming is the most expensive part of a short play, it is also the key to determining the success or failure of a short play.

In the new media novel field, if a user tops up a million yuan for a book, 90% of the money is paid to the CPS platform, while the content platform only gets 10%, and the author can only get half of this 10%. The revenue sharing of mini-program short dramas is even more difficult than that of novels. The platform takes almost 90% of the revenue, and the remaining 10% is left to the content producer as copyright income.

In fact, production companies that can get copyright fees must be tied to platforms, such as Jiuzhou and Liangliang, or online literature companies. However, many online literature companies currently invest in novel copyrights, and some directly produce short dramas, such as Dianzhong Technology and Migu Reading, which directly find contractors to produce. It is not easy for small and medium-sized teams to get the initial copyright fees.

The biggest profit of short dramas comes from user recharges, which is also the real focus of competition in the industry. The producer usually gets a commission based on the recharge amount, usually 3-5%; the distributor gets a profit of about 10%-15% of the turnover from the release; the platform is often the biggest winner, with revenue from direct user payments and 10-15% of the turnover from the distributor.

At present, the industry's leading platforms have established industry barriers by relying on content capabilities and channel capabilities. For example, Jiuzhou Culture, which frequently produces popular products, Dianzhong Technology, which has grown up with China Mobile's mobile reading, and Fanqie Short Drama, which has been nurtured by Douyin's traffic.

The success rate of a drama depends on the strategic combination of content, materials, channels and audiences, and is highly correlated with the delivery capabilities.

According to a research report by Soochow Securities, the leading companies need to release at least one new drama every day, with a box office of 3-5 million yuan and a monthly income of about 100 million yuan. In order to achieve high delivery efficiency, thousands of strategy models are often invested on the first day, with each model costing 1,000 yuan. Usually 90% of the models will be eliminated on the first day, while the profitable models will be retained and increased.

The average life cycle of a mini program short drama is one month, with 80% of the budget spent in the first week, decreasing in the next three weeks, and continuing to generate revenue through distribution after the life cycle ends. For small companies that have just entered the market, it takes three months to go through the production and purchase process, and another three months to replicate it to verify the effect. At this point, they are already behind several of the top processes.

From January to July 2023, the share of hits of Dianzhong and Jiuzhou was 17%, Huasheng Bookstore, Inke, Liangliang, and Bingtian were all 5-10%, and the top 10 companies accounted for 81%. And comparing the rankings from January to July this year with the rankings from May to July, the top 5 and top 10 companies only fluctuated in relative ranking.

Image source: Soochow Securities

Dianzhong Technology is currently one of the leading companies in the short drama track. In the early days, most of the company's revenue came from its mobile subsidiary. It promoted Migu Digital Media's books on its own APP and charged service fees as its main source of revenue, which also became one of the reasons for the company's subsequent IPO failure.

Later, the company developed its own library business including the "Kuaikan Novels" APP, "Free Novels Collection" APP, and "Xigua Free Novels" APP, focusing on digital reading methods based on WeChat, attempting to get rid of the dual restrictions of traffic entrances and high-quality content. However, the channel costs and copyright costs that were much higher than those of its peers still caused the company to fall out of the first echelon.

Dianzhong Technology, which transformed in 2022, encountered short dramas. After creating several popular works with revenues of over 100 million yuan, Dianzhong Technology, which once had sluggish growth in the online literature world, "turned around" and became the leader in the short drama industry. It is reported that it currently occupies about 25% of the short drama market share.

In an interview, Chen Ruiqing, chairman of Dianzhong Technology, said that nearly 80% of IPs have now been transformed from online literature into short dramas, and almost all online literature companies are making short dramas. As a company that started out as an online literature company, Dianzhong Technology's short drama revenue now far exceeds that of online literature platforms.

Although many people make money in this industry, short dramas are not a business that is guaranteed to make money.

According to the announcement released by Tianwei Video, its shareholding China Radio and Television Media Co., Ltd. has reached a cooperation with Dianzhong Technology, and has successively launched short drama products on WeChat mini-programs, quick applications, IOS and other platforms. The overall short drama business revenue is expected to account for 19% of China Radio and Television Media's annual revenue, but the short drama business is expected to make a profit of no more than 3 million yuan in 2023, and China Radio and Television Media's overall profit is expected to be a loss in 2023.

Wang Xiaoshu, the founder of Jiashu Technology (Bingtian Short Dramas), once spoke frankly at the 2023 Sohu Finance Annual Forum that the investment cost of short dramas is around 80%-90%.

Jiuzhou Culture, a leading company in paid short dramas, once disclosed data that the company launches 50 to 60 short dramas each month, with each costing 200,000 to 300,000 yuan. About 70% of them can break even, and the hit rate is 10%-15%. However, 30% of the dramas are not profitable, and 10% of them are clearly loss-making.

That is to say, the current domestic short drama hit rate is about 10%-25%. In a relatively ideal situation, if the ROI can be close to 1.2, even if you spend 1 million yuan on traffic, you can earn 100,000 yuan. Based on the production cost of 400,000 yuan, the traffic after going online must reach at least 4 million to avoid losing money. This is also the reason why large companies have an advantage in entering the short drama track, they have enough funds to withstand consumption.

However, with more and more players entering the market, the mass production of dramas and the serious homogeneity of content have led to aesthetic fatigue among consumers, making it difficult for short drama manufacturers to establish brand value. The industry is bound to "seize the sand with the waves" and ultimately leave behind players who can withstand the test of the market.

2. The construction of Douyin and Kuaishou content ecosystem, and the silence of third-party independent APPs

This year, the number of daily active users of short dramas on the Douyin and Kuaishou platforms has grown rapidly. Kuaishou's financial report shows that by the end of 2022, the number of daily active users of Kuaishou short dramas reached 260 million, and the cumulative number of views of short dramas exceeded 100 million, and in the first half of 2023, the total number of views of Kuaishou's Xingmang short dramas exceeded 60 billion.

As of June this year, the daily active users of Douyin short dramas were around 150 million, and there were more than 400 short dramas with over 100 million views. The DAU of Douyin short dramas increased by 67% year-on-year in 2021, and the number of views increased by 99%.

Guolian Securities also estimates that the short drama industry's annual advertising consumption in 2023 will reach approximately 18.3 billion. Assuming an ROI of 1.2, the turnover of short dramas within the ByteDance system alone will reach 22 billion. This does not include the two major short drama traffic pools, Kuaishou and WeChat mini-programs. The box office of mainland Chinese movies only broke 50 billion yuan in mid-November.

For the platforms, the user growth of short videos has almost reached its ceiling, and short video platforms urgently need to find new revenue growth points to alleviate their own anxiety. As the business that best adapts to the platform ecology, short dramas not only have strong commercialization capabilities, but also contribute a mature IP incubation path, which can bring "living water" of content traffic.

As short dramas were gaining momentum, Kuaishou began to develop short drama content at the end of 2019, established Kuaishou Small Theater, and successively launched platform support policies such as the "Photosynthesis Plan", "Star Plan", and "Drama Star Plan". In December 2020, Kuaishou's "Star Plan" upgraded the profit-sharing rules, and in 2021 announced that it would invest real money and tens of billions of traffic to create 1,000 Kuaishou exclusive boutique short dramas.

At present, the DAU of Kuaishou short dramas has reached 260 million people, and the number of short drama creators has reached 130,000. In 2022, the Star Project will produce more than 400 short dramas, of which more than 100 short dramas have a cumulative playback volume of over 100 million times.

The platform has accumulated a large number of mid-level creators and MCN agencies. For example, individual creator Zhizhu launched the hit short dramas "The Princess Is Above" and "Donglan Snow" after joining Kuaishou. The contracted talent @海予星辰Hi under Gumai Jiahe created "I'm a Group Favorite in the Entertainment Circle" and @于千穗Y's "The Counterattack of the Housewife", which have exceeded 300 million views on Kuaishou.

Data shows that Kuaishou's summer short drama "The Reason Why I Go Back to Seventeen" has been viewed over 470 million times, received 632.2w likes, and has been searched 422 times on the entire network platform, with a cumulative total of 2.55 billion readings on the entire network.

Image source: Kuaishou official Weibo

Kuaishou's Q3 financial report pointed out that the commercial customized short drama "Beauty Comes True" launched during the summer vacation brought 1.09 billion exposures to the title sponsor Tmall International, and also drove Kuaishou's online marketing service revenue to 14.69 billion yuan in the third quarter, a year-on-year increase of 26.7%.

Compared with Kuaishou, Douyin started micro-short dramas later and only officially launched its efforts in early 2021. However, Douyin has high-quality celebrity influencers and content organizations. In the early days, the "Chenxing Project" brought together ten leading film and television brands including Changxin Media, Lemon Studios, Noon Sunshine, Huace Film and Television, and Perfect World for co-creation.

This year, "Twenty-Nine", starring Yang Rong, is from Ningmeng Films. It gained more than 1 million followers within 72 hours of its release, and its cumulative Douyin playback volume has exceeded 830 million to date. "Full-time Househusband Training Program", starring Liu Yun, is from Perfect World. It received sponsorship from the beauty brand PROYA before filming, integrating the brand into the plot and broadening the possibilities of commercialization.

For example, after launching the matrix of short drama + live broadcast + short video, the beauty brand Hanshu has been investing heavily in short dramas, collaborating with super talents @姜十七 and @魔女月野 to launch a total of 7 short dramas including "A Beam of Sunshine and a Beam of Love" and "Heartbeat More Than a Moment", with a total of over 5 billion views on Douyin. In the first half of this year alone, the "Hanshu Red Waist Gift Box", a product embedded in the short drama, has sold over 1.5 million sets through all channels, and has been ranked No. 1 on the repurchase list many times.

Up to now, nearly 400 content organizations have participated in the production of short dramas on Douyin. It can be seen that Douyin has a good grasp of the creator ecosystem and has gradually established a creative collaborative ecosystem in which the head drives the middle and tail.

However, in the multi-billion dollar short drama market, all parties want to get a piece of the pie. As the Douyin and Kuaishou micro-platforms have attracted the vast majority of short drama users, it has become difficult for mid- and upper-stream practitioners to make money.

On the one hand, Douyin and Kuaishou have tightened their requirements for the review and commercial promotion of short dramas, and the penalties for illegal content are not limited to removal, blocking, and banning. In order to consolidate their own short drama content and industrial ecosystem construction, Douyin and Kuaishou have incubated independent APPs "Hongguo Short Drama" and "Xifan", gradually integrating mid- and upstream resources in the industry to obtain more market share and user groups.

The producer of the short drama Xiao Dongyu told us that the minimum incentive for an S-level project on Kuaishou with a duration of less than 5 minutes and about 20 episodes is 200,000 yuan, and the CPM (effective playback volume per thousand) unit price is 8 yuan. However, there are corresponding assessment indicators. If the average playback volume per episode is less than 1 million, you can only get the minimum 200,000 yuan. The incentive given by Douyin is even lower.

"Now the platform's threshold for short dramas to pass is getting higher and higher, and the incentive money is not even as much as the cost of content production. For a short drama shot with a cost of 400,000 yuan, we can only get 5%-7% of the box office, and we need at least 5 million yuan in top-ups to make a profit. Last year, the company launched 50 short dramas on Douyin and Kuaishou, and at least half of them were profitable. But this year, several dramas failed to pass the review and were removed from the shelves. Every time a new regulation is issued, more than a dozen films are left on hand. It seems that there will not be many years of hot money to be made in this industry."

On the other hand, the platforms have gradually introduced transaction fees for short drama payments. WeChat platform charges 20% technical service fee, and Douyin charges 30%. In addition to the technical service fee, the platform will also take a certain commission from the withdrawal of revenue from short dramas. For example, WeChat's commission rate for withdrawals is as high as 10%, which exceeds the profit level of most industry players. This means that the survival of content producers and investors is at risk.

In order to become independent from the Douyin and Kuaishou micro-platforms, and at the same time cultivate their own private domain traffic to accelerate commercialization, each company began to build its own independent APP.

Among them, the fastest growing is China Online. The company's dual-track strategy has blossomed in many markets, causing its stock price to double in November.

Image source: choice

The domestic short drama platform "Yexiang Theater" achieved a revenue of 6.7 million yuan in the first year of its launch, and the platform has accumulated more than 2 million fans and more than 1.1 million followers; the overseas short drama product "ReelShort" achieved explosive growth in November, and dominated the entertainment application list of the US App Store from November 11 to 13, ranking second in the overall list. According to market intelligence AppFigures statistics, ReelShort's estimated downloads in November exceeded 2 million, and the estimated net income exceeded 5 million US dollars.

Although the stock price has soared due to the concept of short dramas, from the perspective of actual performance, Chinese Online has continued to lose money in the past year or so. According to data from Eastmoney, since the first quarter of 2022, Chinese Online's non-net profit has been in the red for seven consecutive quarters, with a cumulative loss of 502 million yuan.

Worse still, the cash flow from operating activities of Chinese Online has turned from positive to negative. The financial report shows that in the first three quarters of 2023, the net cash flow from operating activities of Chinese Online was -66.38 million yuan, while the same period last year was a net inflow of 53.09 million yuan.

Even so, many companies are still flocking to the short drama market. There are state-owned media companies (Hippo Theater), animation live broadcast platforms (Tiantian Watching Drama), and game and film companies (Changfei Theater). After all, only a few stand out. Take Xiaomi App Store as an example, the download volume of most apps is only around tens of thousands.

Image source: Screenshot of Xiaomi App Store

Fundamentally, users need to have a certain amount of traffic to download independent apps. Compared with the strong conversion mechanism of "recommendation-payment-feedback" of mini programs and platforms, independent apps themselves lack the means to attract users who are interested in short dramas, and ultimately traffic will only be concentrated on a few leading manufacturers. In addition, the share of recharge income will be taken away by Android and Apple channel vendors. In order to acquire users, they also need to spend money to buy traffic, which runs counter to the original intention of leaving the short video platform.

What cannot be ignored is that a large number of short drama apps have flooded into the market, and users' consumption habits have gradually been cultivated. The improvement of the creation chain will prompt content upgrades, forcing players from all walks of life to focus on their core advantages. Only platforms that take the trouble to create value for users can truly survive.

3. Promote iQiyi, Youku, Tencent Video and Mango TV, and bring professional players to the stage, aiming for the hegemony of Douyin and Kuaishou

At the first Hangzhou Micro Drama Conference, Chen Ruiqing, chairman of Dianzhong Technology, said: "If we cannot get rid of vulgarity, excessive commercialization, and cultural connotation of our works, and cannot reach the level of quality, and the content continues to sink, we may not even make 5 billion.

With the increasingly fierce competition in the micro-short drama market, which has been developed for more than a year, it has become a red ocean. In order to stand out from the fierce competition, increasing investment and promoting big IP has become an industry consensus.

According to Datawin data, from October 1, 2022 to August 31, 2023, a total of 1,125 short dramas were launched on long and short video platforms, achieving a leapfrog step-by-step growth compared with 442 in 2022, 420 in 2021, and 103 in 2020.

By platform type, short video platforms accounted for 59.46% of the total short dramas, including 455 on Douyin and 214 on Kuaishou. Long video platforms accounted for 41.54% of the total short dramas, including 189 on Youku, 176 on Tencent, 66 on Mango TV, and 12 on iQiyi. Platforms such as Bilibili, BesTV, and Sohu Video gradually entered the market and released a small number of works.

Image source: Datawin Data

At present, short video platforms have an advantage in numbers, while long video platforms, mainly iQiyi, Youku, Tencent Video and Mango TV, tend to introduce more professional film and television teams to create short dramas, with rich content types and greater potential in the future.

Producer Hu Mi said, "In the past two years, you could make a short drama with 100,000 or 200,000 yuan, and 800,000 yuan was the top-end. Now, short dramas start at at least 300,000 yuan. For short dramas below 300,000 yuan, there are basically no more than ten people in the shot, and the scenes can only be used where the web drama was shot. Star projects of decent film and television companies are 2 million yuan and above. Now, for a single company conference room in Beijing, there are two charging standards: 1,000 yuan/hour and 10,000 yuan/day. If it is a private scene, it is 20,000 yuan/day, and overtime is charged at a unit price of 2,000 yuan/hour."

From the beginning of the year to the end of the year, a number of micro-short dramas such as "Provoke", "Feng Yue Chang", "Twenty-Nine", and "When I Fly Towards You" have become popular. Directors such as Zeng Qingjie, Yang Kenan, and Lin Qing, screenwriters such as Zhao Lin, Ren Xiaocong, and Zhang Fen, and production companies such as Wutang Culture, Datang Star, Haoyou Nengling, and Wentou Yida are becoming the leading forces in the micro-short drama market and are raising the threshold for micro-short dramas.

As an early long-video platform, Youku opened the "Small Theater" channel as early as 2019, and then launched the "Fuyao Project" in 2021 , building a bridge of cooperation for short drama producers and major literary and animation IP platforms, and participating in project creation through investment + profit sharing.

This plan brings together more than a dozen leading IP platforms such as Kuaikan Comics, Shuqi Novels, Qimao, and Fanqie, helping many high-quality micro-short drama projects to be successfully implemented.

"Love Locked for Three Lives", a short drama about the tragic love in the Republic of China, which was launched in May this year, has earned a total of 7 million in revenue in 11 days since its launch. During its broadcast, it topped the site's hot search list for 5 consecutive days and won the weekly championship on Maoyan's short drama popularity list. The number of readings of the topic on Weibo and the number of views on Douyin exceeded 1 billion.

"When I Fly Towards You" has a Douban score of 7.8 points and a cumulative box office of over 60 million, making it one of the highest-grossing films this year and continuing to broaden the market's cognitive boundaries for box office short dramas.

In 2022, Youku proposed the "Creation Plan" and "Good Story Plan", focusing on the investment, financing, incubation and research and development of online dramas, micro-short dramas and online movies. In 2023, it upgraded the incentive rules and cooperation methods for split-revenue short dramas, and launched a new "post-broadcast rating" cooperation model, which in disguised form encouraged film producers to improve content quality and promote the split-revenue drama market to reach more audiences.

In 2019, Tencent Video created the first IP-adapted micro-drama "The Spiritual Concubine". In 2020, Tencent Video launched "Mars Short Drama" and "Mars Project" to help the micro-short drama industry move towards high-quality and large-scale development. At the end of 2021, Tencent Video officially launched the industry's first micro-short drama brand "Shifen Theater", among which "The World of Aunts" scored 8.5 points on Douban, becoming the ceiling of micro-short drama reputation.

Judging from market performance, Tencent Video's micro-short dramas have always maintained a leading advantage in terms of work variety and real-time popularity among major micro-short drama lists.

In the TOP10 market share of effective playback volume of Yunhe's micro-short dramas on the entire network in 2023, Tencent short dramas occupy 8 seats. The best performing one is "Provoke", jointly produced by China Online and Wutang Culture. The drama not only set a record for the micro-short drama sharing this year with a box office share of over 20 million, but also broke the popularity value of Tencent Video 10 hours after its launch. 10 hours after the broadcast, it won the TOP1 on the short drama lists of Maoyan, Yunhe and other platforms.

Image source: Yunhe Data

"The Advanced Mistress", which has accumulated more than 6 million in revenue, combines elements of rebirth, revenge, and house fighting; "The Crazy Little Doctor" involves time travel and another world; and "Return to 1993" includes male frequency, time travel, and entrepreneurship. These short dramas combine the most classic and popular elements in the current market and have successfully penetrated into the basic user base of the platform.

iQiyi can be said to have "got up early but arrived late" in the field of short dramas. In December 2018, it opened the "Vertical Screen Control Theater" and launched the vertical screen short drama "Life Attacked Me", which mainly featured 4 to 10 minutes of vertical screen content. However, the entire short drama market had not yet been commercialized and failed to stir up much waves. In March 2019, iQiyi released a complete set of "Drama Short Video Paid Revenue Sharing Cooperation Instructions" for another 4 months.

It was not until the end of 2022 that iQiyi started to lay out in the micro-short drama track, stating that it would form "long and short complementarity" with long dramas, and launched the "Yun Teng Plan" to select a batch of high-quality IPs for development.

According to Datawin data, iQiyi released 11 new short dramas in the first three quarters of 2023. After the release of "Pianpian Chongai" at the end of July this year, it ranked second in Yunhe's August short drama dominance list and ranked TOP3 in Datawin's third quarter short drama boom index TOP30. As of October, the drama's revenue share has exceeded 3 million.

Under the principle of "quality", iQiyi's performance in the shared-revenue drama market in 2023 was quite outstanding. According to iQiyi statistics, as of the end of August, there were 7 projects with a shared revenue of over 20 million on the site. Among them, "The Lost Traces" was online for 19 hours, and the popularity on the iQiyi site exceeded 7,000. After four days of broadcasting, the shared revenue exceeded 10 million, setting a new record for iQiyi's shared-revenue dramas.

When opening the four apps of iQiyi, Youku, Tencent Video and Mango TV, users will find that Mango TV is the only long video platform that places short dramas in the navigation bar below, providing the most direct entry for viewers. This shows Mango TV's ambition to carefully build a short drama brand.

Mango TV APP screenshot

At the end of 2019, Mango TV officially launched the "Big Mango Project", thus entering the micro-short drama track. In 2021, the first commercial case of the Big Mango Project, "Let's Fall in Love, Game King", was born. At the end of the year, Mango launched an independent APP "Big Mango" to push short dramas and micro-variety shows to users.

In the first half of 2022, "Da Mang" created the short drama "Nian Nian Wu Ming", and continued to launch the micro-short drama "Xu Yan" in the second half of the year. The average Douban score was above 7 points, and the number of views exceeded 600 million.

This year, "Feng Yue Bian" became the first micro-short drama to be broadcast on satellite TV. As of the end of November, the play had been played more than 700 million times on Mango TV, and the total amount of joint investment has exceeded 13 million. In the third quarter of Datawin's micro-short drama boom index TOP30, "Feng Yue Bian" ranked first, and also ranked in the top three in the Q3 Yunhe network micro-short drama feature film effective playback volume market share TOP10.

Mango TV also announced a partnership with Douyin to jointly launch the "Quality Short Drama Support Plan", which will use the joint development of short dramas as a starting point to promote in-depth cooperation in secondary creative videos, brand marketing and other aspects, which may change the current micro-short drama market landscape.

Nowadays, short dramas with high reputation continue to emerge, proving that short dramas have gradually established order in their wild growth. The high-quality development of the industry has also made this huge traffic pool worthy of re-examination.

According to Mirror Entertainment statistics, from 2020 to 2022, the cumulative distribution amount of related short dramas on the three major platforms of iQiyi, Youku and Tencent Video alone was approximately between 150 million and 200 million. In the first half of 2023, this figure quickly exceeded 60 million. Obviously, the monetization ability of short dramas is continuing to increase.

With the participation of a number of professional bigwigs, the micro-short drama has officially started the second half of content upgrade, developing in multiple dimensions such as platform, producer, content, and monetization channels.

The short drama market has gradually produced leading content creation companies such as Wutang Culture and Lemon Studios, while film and television companies including Huace Film & TV, Yitong Production, and Happy Twist are also continuing to deepen their layout in the short drama track.

However, we should also see that leading companies like Silver Land and Datang Star are still very few, and there are still a large number of production companies that are in the exploratory stage. Some small and medium-sized production companies have even turned around and turned to the development and production of mini-program short dramas, further subdividing the track.

However, although iQiyi, Youku, Tencent Video and Mango TV are constantly upgrading and transforming, it is not enough to make Douyin and Kuaishou panic.

On the one hand, the popularity of short dramas on Douyin and Kuaishou largely relies on algorithm recommendations. Accurate recommendations based on content, information and social relationships make it easier to complete a closed loop of communication within a circle. The content operation chain of long videos may not meet the entertainment needs of consumers, and an atmosphere for watching short dramas has not been formed on the site. The overlap between core users of long video platforms and short dramas is not high.

On the other hand, the business model of micro-short dramas on long video platforms is still unclear. Advertisers are affected by the platform's broadcast cycle and have to wait and see when the dramas are gaining momentum during the schedule and wait for opportunities to place ads. The main payment model is still membership payment + advertising monetization.

The length of Douyin and Kuaishou short drama advertisements and the embedded content are more operational, and users have higher tolerance. Not only do they have diversified investment models such as theater sponsorship, slot cooperation, and brand customization, but they can also choose exclusive customized full-process marketing plans based on different nodes such as the short drama preparation period, hot broadcast period, and long-tail period, leaving sufficient execution space for brand cooperation.

In the dispute between iQiyi, Youku, Tencent Video, Mango TV, and Douyin and Kuaishou, the deciding factor is likely to be something other than content.

4. Final Thoughts

In December 2022, the State Administration of Radio, Film and Television issued the "Notice on Further Strengthening the Management of Online Micro-Short Dramas and Implementing the Creation Improvement Plan". It mentioned that all micro-short dramas must pass the content review of the radio and television administrative department and obtain the "Online Drama Distribution License", or complete the online audio-visual program filing in accordance with the relevant regulations on online drama management.

It is understood that the processing period for the three certificates takes 2-3 months. If you buy ready-made ones directly, the market price is about 50,000. The disorderly mass production of micro-short dramas will be curbed.

In April this year, WeChat, Douyin, and Kuaishou launched a series of heavy-handed rectification actions, and the three platforms removed more than 2,400 short drama mini programs. On November 28, Douyin issued an announcement on the review standards for mini programs; in December, Kuaishou cut off the promotion and delivery of third-party short drama mini programs.

Under this wave of reshuffle, there will be great changes in the content, shooting cycle, production level and commercialization direction of short dramas. Micro short dramas will move closer to the formal process of intensive cultivation, and the track will gradually become the territory of professional players.

At the rate at which the micro-short drama market is evolving, the year 2024 will probably see a repeat of the tragic situation of the “Thousands of Groups War”.

Author: Fan Wen; Editor: Zhao

Source: Oddity (ID: jioupai)