CBN Friday Special丨“The double life of a billion-dollar industry”: Mini drama boom and regulation

Three minutes - The time it takes to eat an apple, drink a cup of tea or listen to a song. Such a short period of time is becoming the perfect slot for young Chinese to watch an episode of what is being called a Wei Ju, or mini drama.

As a new medium, the Internet has not only changed the one-way communication mode of traditional TV but also given birth to the new artistic form of self-produced dramas on the Internet.

It’s no secret that mini dramas on China’s short video platforms — which include the likes of ByteDance’s Douyin, Bilibili, and Kuaishou — are becoming virtually impossible to ignore.

Recently, big hits like “The Double Life of My Billionaire Husband” and “Never Divorce a Secret Billionaire Heiress” on ReelShort, a mini drama app on Google Play, took overseas audience by storm.

Examining industry growth, mini dramas indeed are enjoying a golden period of rapid expansion. Statistics from a professional team with the Communication University of China reveal a significant increase in the number of micro-drama releases on five major domestic video platforms, from 276 micro-dramas in 2022 to 298 in the first seven months of 2023, reflecting the industry's robust momentum.

More and more film and television production houses and MCN (Multi-Channel Network) agencies have begun to invest in short dramas, eager to get in on the trend to promote their in-house IP and rosters of talent.

There are probably more than 100 short drama crews starting up in Hengdian World Studios alone, and more than 200 crews are in preparation. Some leading MCN agencies have released over 100 productions this year, according to one industry insider.

Completely different from traditional TV series in the aspects of creativity, script design and filming style, mini drama is a brand-new field that many are hoping to monetize from.

Industry predictions estimate that the market value of micro-dramas will approach 25 billion yuan in 2023. Currently, the daily market value of paid short dramas on all domestic platforms is around 60 million yuan. During peak seasons such as the National Day holiday, the market value exceeded 1 billion yuan.

As of December 2022, the short video user base reached over 1 billion, with over half of the billion users having watched micro-dramas and other short content, lasting less than 3 minutes, in the past six months. Among them, users under 19 years old accounted for more than 50 percent, according to an industry report.

To cash in the micro-dramas' popularity, Douyin has tested its paid mini dramas last week, and users can choose to purchase each episode or the entire drama. Once purchased, the videos can be watched repeatedly without time limits.

China Literature, a subsidiary of China's tech giant Tencent, which owns a plethora of popular novel copyrights, has officially ventured into producing short dramas. Weishi, the short-video sharing app owned by Tencent, announced last year it would invest 1 billion yuan to support mini dramas, and cooperate with China Literature, Tencent Animation and Comics, and Tencent Games in IP creation.

Phenomenal boom from home to abroad

While short dramas are currently making waves in China’s A-share market, the same trend has also swept across international markets. A short drama app under a Chinese enterprise even briefly surpassed TikTok, claiming the top spot on the US iOS entertainment list.

The online short drama app ReelShort, featuring episodes like “Goodbye, My CEO” and “The Double Life of My Billionaire Husband” each lasting less than two minutes, has unexpectedly gained traction in the North American market.

Recently, it even briefly top the US iOS entertainment chart, gaining 1.9 million downloads so far in the month of November alone. Earlier this month, the app also hit a daily record in terms of both downloads and revenue, with 326,000 new installs and $459,000 in net revenue — the latter meaning the revenue it retained after paying app store fees.

Fueled by the trending topic of short dramas, the share price of the Chinese publishing company, COL Group, which owns the drama app, hit multiple daily limits. The company has seen its share price jumped from a recent low point of 11.95 yuan to 30.10 yuan on November 14.

The app operates on a per-episode payment method, with the cost to watch the entire series exceeding $10, making it pricier per unit compared to Netflix’s unlimited monthly subscription.

The immense popularity of these micro and short dramas, infused with distinct Chinese characteristics, have not only become a popular cultural export but also highlighted China’s unparalleled business innovation prowess in the mobile internet sector on a global scale.

Differing from the earlier practice of clumsily adding English subtitles to domestic short dramas, the current wave of popular overseas short dramas features authentically European and American accents and faces.

In the US, the company set up three film and TV studios in Los Angeles which deployed a differentiation strategy and engaged in developing different types of film and TV projects, the company said.

ReelShort streams short plays characterized by short running time, low production costs, many episodes, and filming periods of less than a week. All these features enable a short business verification period and high return efficiency.

As a short play series generally comprises 80 to 100 episodes, each one to two minutes long, they are usually very dramatic and feature many plot twists and powerful climaxes in order to attract viewers.

However, the storyline bears a striking resemblance to the explosively popular Chinese web novels from a few years ago, which were saturated with themes like “high-handed CEO falling in love with me.”

Regulation reeling in

Akin to miniature episodic soap operas, short dramas have a relatively long (by internet standards) history in China, with Kuaishou among the first to introduce the format with its 2013 series “Never Expected”.

Yet short dramas took nearly five years to hit their stride, steadily gaining viewer interest over the past three years. In 2020, China’s powerful media regulator, the National Radio and Television Administration (NRTA), began formally including short dramas — which it defined as programs with episodes of less than 10 minutes — under its supervision.

This year, 2023, is believed to be the first hugely profitable year for micro-dramas in the Chinese market. Short dramas have become a hot investment project throughout the year, creating one instant millionaire after another.

With each episode lasting one to two minutes, the format’s average cost ranges from hundreds of thousands to millions of yuan. Featuring melodramatic and clichéd plots, straightforward payment options, and tapping into the vast user base of short video platforms, short dramas, once ridiculed by the industry in the past two years, are now viewed to be the “most lucrative track of 2023” due to their remarkable cost-effectiveness, attracting investments from various capital sources.

Chinese enterprises have already mastered a complete system, ranging from script creation, shooting, broadcasting platforms, to the entire marketing ecosystem.

The popularity of micro-dramas stems from their ability to meet people's demand for fragmented entertainment. In today's fast-paced lifestyle, individuals find it challenging to dedicate extensive time to watching lengthy TV series or movies. Micro-dramas, with their concise and engaging narratives, provide viewers with a quick yet satisfying viewing experience.

Along with these micro-dramas' huge popularity, vulgar content is also abundant. As early as November 2022, the NRTA started a special rectification campaign for the mini-program type of online micro-dramas.

In a three-month campaign, a total of 1.365 million episodes of short dramas containing pornographic, violent, and vulgar content were taken offline, according to media reports.

The administration issued regulations last week to further manage vulgar content, along with a "blacklist" mechanism for online micro-dramas. A more sophisticated monitoring mechanism will also be applied to censor vulgar content in micro-dramas.

On the industry side, major short-video platforms like Douyin, Kuaishou and WeChat have also announced concrete measures to crack down on non-compliant and low-quality micro-dramas.

Last week, Douyin revealed that it had taken down 119 non-compliant micro-dramas within a short period and penalized 1,188 accounts involved in the improper promotion of micro-dramas. Kuaishou also announced a targeted initiative against non-compliant micro-dramas, removing more than 10 such productions and imposing penalties on 13 accounts based on the severity of their violations.

Although mini dramas have opened up a new window for smaller film studios with smaller budgets, they face challenges in terms of industry positioning, experts said. As a newly popularized mode of communication, some micro-dramas, especially commercial ones, may skirt the edges of compliance.

Introducing detailed review guidelines and establishing a "blacklist" mechanism will help regulate industry development in China, ensuring the transition of micro-dramas to a more sustainable path. This also provides a model for the healthy development of burgeoning micro-drama markets around the world.

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

Presented by SFC

编委: 于晓娜

策划、编辑：李艳霞

播音：李莹亮

撰稿：李莹亮

音频制作：李莹亮

设计：郑文静、廖苑妮

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