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Microdrama - small format, surprisingly big business (English version) · MicGyver Media

• 0:00
  SPEAKER_00: Microdrama, small format, surprisingly big business.
• 0:04
  SPEAKER_00: Hi, I work with strategy and business development in the media industry.
• 0:09
  SPEAKER_00: This is the audio version of an essay I've written about Microdrama,
• 0:13
  SPEAKER_00: one of the most explosive new storytelling formats in the world right now.
• 0:17
  SPEAKER_00: It's adapted from an introduction I've given at a couple of media conferences this year.
• 0:21
  SPEAKER_00: The goal is to answer two simple questions.
• 0:24
  SPEAKER_00: What is this thing and why should we care?
• 0:28
  SPEAKER_00: Part one, what is this thing?
• 0:31
  SPEAKER_00: Duan Zhu, vertical drama or micro drama?
• 0:35
  SPEAKER_00: A beloved child has many names, as we say in Norway.
• 0:39
  SPEAKER_00: The format originated in China,
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  SPEAKER_00: exploded around 2020,
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  SPEAKER_00: and has since mutated and spread far beyond the country's borders.
• 0:47
  SPEAKER_00: A bit like a certain virus, really.
• 0:49
  SPEAKER_00: The recipe is relatively simple.
• 0:51
  SPEAKER_00: Episodic, often quite soapy drama.
• 0:54
  SPEAKER_00: Each episode is just one to three minutes long and a series typically has somewhere
• 0:58
  SPEAKER_00: between 20 and 100 episodes.
• 1:01
  SPEAKER_00: They're shot in vertical format, made for your phone, and designed for binging.
• 1:06
  SPEAKER_00: Strong openings, a high pace, and a cliffhanger at the end of every single episode.
• 1:12
  SPEAKER_00: To give you a sense of what this looks like, let me read you a few completely random titles.
• 1:17
  SPEAKER_00: Revenge of the XXL wife.
• 1:20
  SPEAKER_00: Found a homeless billionaire husband for Christmas.
• 1:23
  SPEAKER_00: And tricked into having my ex-husband's baby.
• 1:27
  SPEAKER_00: So we're talking blatantly obvious titles and over-the-top storylines
• 1:31
  SPEAKER_00: with every cliche you can think of.
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  SPEAKER_00: Plot twists every minute.
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  SPEAKER_00: This is pulp fiction on steroids.
• 1:38
  SPEAKER_00: And it will hardly surprise anyone if I say that we're mainly talking about
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  SPEAKER_00: a female audience here.
• 1:43
  SPEAKER_00: As the sector matures, we do see more genre variety, but this has been the starting point.
• 1:49
  SPEAKER_00: So that's the recipe.
• 1:51
  SPEAKER_00: What about the business model?
• 1:52
  SPEAKER_00: By now it's well established, and I'll highlight four things.
• 1:56
  SPEAKER_00: The first is low production costs.
• 1:59
  SPEAKER_00: Unknown actors,
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  SPEAKER_00: few shooting days,
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  SPEAKER_00: and forward-leaning use of AI for scriptwriting, dubbing, and editing.
• 2:05
  SPEAKER_00: The first fully synthetic AI productions are now starting to appear too.
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  SPEAKER_00: The second is high volume and a fast publishing pace.
• 2:14
  SPEAKER_00: Low costs mean you can throw 100 series at the wall and see which one sticks.
• 2:18
  SPEAKER_00: This is very much a numbers game.
• 2:21
  SPEAKER_00: The third is distribution.
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  SPEAKER_00: Teasers and the first episodes are usually published on social media.
• 2:27
  SPEAKER_00: From there, viewers are sent on to dedicated apps to watch the rest.
• 2:31
  SPEAKER_00: And the fourth is the revenue model.
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  SPEAKER_00: Revenue comes from micropayments,
• 2:35
  SPEAKER_00: a bit of advertising, and a system that rewards continuous binging.
• 2:39
  SPEAKER_00: The inspiration from mobile games is obvious.
• 2:42
  SPEAKER_00: You earn tokens to unlock new episodes, with a steady stream of Dokamine hits along the way.
• 2:47
  SPEAKER_00: Part 2.
• 2:48
  SPEAKER_00: So why should we care about this curious phenomenon from the East?
• 2:52
  SPEAKER_00: Is it the next Gunpowder?
• 2:54
  SPEAKER_00: Or just the next Lububu?
• 2:56
  SPEAKER_00: As a business developer, an interesting place to start is always to follow the money.
• 3:01
  SPEAKER_00: And the numbers don't lie.
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  SPEAKER_00: This is starting to become big business.
• 3:05
  SPEAKER_00: Five years ago, Microdrama brought in around half a billion dollars.
• 3:09
  SPEAKER_00: This year, it will probably pass 14 billion.
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  SPEAKER_00: That's just under half of the entire global box office.
• 3:16
  SPEAKER_00: And in China, the format has already overtaken cinema.
• 3:20
  SPEAKER_00: As a film enthusiast, I found that statistic a little depressing, but that's how it is.
• 3:25
  SPEAKER_00: A growing share of the growth now comes from outside China, with the US as the largest market.
• 3:31
  SPEAKER_00: This is a train in motion, with forecasts suggesting it could start nudging
• 3:38
  SPEAKER_00: So what does this look like outside China?
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  SPEAKER_00: For now,
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  SPEAKER_00: most of the viewing happens on dedicated,
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  SPEAKER_00: partly Chinese-funded apps like Realshort and Dramabox.
• 3:47
  SPEAKER_00: The format has started to gain a foothold in the US,
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  SPEAKER_00: and last year there was a period when Realshort had more downloads than TikTok.
• 3:54
  SPEAKER_00: And now, Hollywood is jumping on board too.
• 3:57
  SPEAKER_00: Why?
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  SPEAKER_00: Is it just a desperate hunt for new revenue?
• 4:01
  SPEAKER_00: Probably a bit of that as well, but mostly because it addresses a real problem.
• 4:06
  SPEAKER_00: The mobile phone has now overtaken the TV screen in daily time spent across the population.
• 4:11
  SPEAKER_00: And among younger audiences, mobile is two to three times bigger.
• 4:16
  SPEAKER_00: I recently read an estimate that vertical video has passed $150 billion in revenue,
• 4:21
  SPEAKER_00: overtaking the global advertising economy for linear TV.
• 4:25
  SPEAKER_00: At the same time, the TV and streaming market is increasingly mature, with flattening growth.
• 4:31
  SPEAKER_00: The industry has to find new paths to keep growing.
• 4:34
  SPEAKER_00: And this is highly relevant closer to home as well.
• 4:37
  SPEAKER_00: Three numbers from Norway, where I work.
• 4:40
  SPEAKER_00: TV viewing has fallen from almost two hours a day in 2020 to well under an hour and
• 4:45
  SPEAKER_00: a half today.
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  SPEAKER_00: Nearly nine in ten households already have at least one streaming service,
• 4:50
  SPEAKER_00: so there's not that much growth left there.
• 4:52
  SPEAKER_00: And of all online video viewing in Norway, almost half now goes to social video.
• 4:57
  SPEAKER_00: So how is the industry responding?
• 5:00
  SPEAKER_00: There is no one single solution.
• 5:02
  SPEAKER_00: But OneTrack now being pursued by several streaming players is
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  SPEAKER_00: to introduce formats like vertical video, video podcasts and mobile games.
• 5:10
  SPEAKER_00: The idea is to become relevant across more of the day because the pattern is clear.
• 5:15
  SPEAKER_00: Mobile dominates the day and TV takes the evening.
• 5:19
  SPEAKER_00: The hypothesis is that this not only leads to more viewing on mobile,
• 5:23
  SPEAKER_00: but also drives more loyalty and engagement for the core TV product as a form
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  SPEAKER_00: of cross-pollination.
• 5:30
  SPEAKER_00: And in this picture, micro drama is a highly relevant format.
• 5:34
  SPEAKER_00: Part 3.
• 5:36
  SPEAKER_00: So, will microdrama gain a foothold in the Nordics?
• 5:39
  SPEAKER_00: No idea.
• 5:40
  SPEAKER_00: That's why they pay me the big bucks.
• 5:42
  SPEAKER_00: The only honest answer is that we'll have to wait and see.
• 5:46
  SPEAKER_00: There is a business logic and a relevant user behavior at the core of this.
• 5:50
  SPEAKER_00: But there are also three unresolved questions.
• 5:53
  SPEAKER_00: The first is about the business model.
• 5:56
  SPEAKER_00: What models can make this sustainable in small markets like ours?
• 6:00
  SPEAKER_00: We're nowhere near the scale that makes this work in China, India or the US.
• 6:05
  SPEAKER_00: Is it advertising?
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  SPEAKER_00: Is it about keeping subscribers?
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  SPEAKER_00: A combination?
• 6:09
  SPEAKER_00: And can micropayments, which we're less used to in the Nordics, be made to fly here too?
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  SPEAKER_00: The second is about technology.
• 6:17
  SPEAKER_00: What role can technology play in making up for the lack of scale?
• 6:21
  SPEAKER_00: And the third, last but not least, is about local adaptation.
• 6:26
  SPEAKER_00: How can this genre be adapted so that it actually resonates with a Nordic audience?
• 6:30
  SPEAKER_00: Only time will tell.
• 6:32
  SPEAKER_00: Thanks for listening.