Should Hollywood Take the Microdrama Boom Seriously?

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1:00Matt Belloni:This episode of The Town is presented by 20th Century Studios, Avatar, Fire, and Ash. Don't miss the movie Critics Are Raving is epic and exciting and gorgeous and heartbreaking and stands as one of the greatest films ever made. It's got incredible visuals, jaw-dropping action, and a cinematic achievement. Avatar, Fire, and Ash, now playing in theaters and now nominated for the Academy Awards for Best Visual Effects and Best Costume Design. It is Thursday, February 12th. Ever since the content recession started in 2023, Hollywood people have been looking for a path back to the peak TV boom times.

1:36Matt Belloni:What if the answer is in shows with episodes that last just 90 seconds? Microdramas. I feel like people in town won't shut up about microdramas. Though the business in this country is still pretty small, and surprisingly few seem to understand them. If you're not familiar, these are basically if social media clips were crossed with serial romance novels. Short bursts of content, often one to three minutes, designed for mobile viewing and to get you hooked, often for free, and then you pay to watch more via micropayments or subscription. The content is cheap and often low quality. A lot of ludicrous romances based on Chinese web novels, badly behaving billionaires, titles like Forever Was a Lie or Waking Up Married to My Crush, that kind of stuff.

2:19Matt Belloni:But they're clearly catching on, mostly in China and other parts of Asia, but increasingly in this country, where revenue from microdramas reached$819 million in 2024, according to one research firm, projected to rise to$3.8 billion by 2030. And globally, the microdrama market is projected to reach$26 billion by 2030. Tons of money flowing into the space, and a bunch of companies have popped up to try to capitalize. One of those is DramaBox. It's a Singapore-based app. They've got a big production studio in LA and participated in a Disney accelerator program. They're trying to hook US viewers on soapy, vertical dramas.

2:57Matt Belloni:And they did$55 million in revenue per month in 2025, 7 million in daily active users. It earns money through pay-per-view, subscriptions, it's even hoping to co-develop projects with Hollywood talent. So how is that possible when entire shows can cost less than $300 ,000? That's what I want to talk about with my guest, Shikone Zhu. She's the DramaBox LA-based head of studio. She's going to get into the microdrama market right now. What works in this genre content, how they make money, all of it. Today, it's the micro drama boom, big money from small episodes. From The Ringer and Puck, I'm Matt Bellany, and this is The Town.

3:39Matt Belloni:All right, we are here with Shikon Zhu, who is the head of studio and one of the top LA-based executives at DramaBox. Welcome to the show. Thanks for having me, Matt. So I want to get into this. We've been wanting to do a micro drama show for a while because as much enthusiasm as there is out there in the business for this kind of nascent genre, there's a lot of skepticism as well. And some of that has been voiced on the show before. Lucas is not a big fan. but I have been curious about this because we're at this time where everything is coming together. Instagram Reels is coming to television and Netflix is starting to look more like YouTube and micro dramas are sort of this middle ground.

4:25Matt Belloni:They're not quite social media video and they're vertical but they're not quite TV quality but there are some pretty effective TV style storytelling devices. So why don't you give us an overview, just a general overview of where the micro drama market is right now? Who's watching it? How big it is? What you are doing at DramaBox? Just give us your pitch. Yeah, absolutely, Matt. So I guess to just kind of break down what vertical drama is briefly, It is a bite-sized mobile-first content that are overall like 90 to 120 minutes long. And each episode is around a minute to three minutes long. So a whole show is broken down into around 50 to 90 episodes.

5:16And we normally release them all in one go so people can go and binge it. And it's normally operating on a freemium model, meaning that you can watch the free episodes and unlock the rest by paying. So where the market is right now, I think we're looking at a 12 billion to 14 billion global market by the end of 2026. And this format first started in China and the market has been surging. And also it's still 80 % of the market is still in China. but I think the U.S. is the fastest growing market right now.

5:53Matt Belloni:And why is that? What is driving that? What are the demos on the U.S. micro drama market? I think in the beginning, because I joined this industry in early 2023 and by that time, it's mostly women over 45. So I think by that time, 70 % of the demo were women over 45. And now it is starting to shift already we're seeing 46 % of the audience who are 18 to 34, still women. But the highest spender right now are women aged 35 to 55, particularly in the US and the UK. And it's a lot of romance. There's a lot of fantasy romance, sort of heightened romance stuff, you know, my secret billionaire boyfriend, that kind of stuff.

6:42Exactly. Yes.

6:44Matt Belloni:Is that the only kind of content that performs in the microdrama format or are there others? I know you guys have you've talked about doing more, but is it primarily the kind of romance and click to see the next little, you know, next little iteration of the romance? Yeah, it's I think it first started with most of it being romance because this format was born from the web novel space. Like these Chinese web novels. Yes, serving the female readers, female audience with romance. But as the format grows, it is starting to shifting towards a lot more male oriented content and also just family dramas in general with no romance involved.

7:29But overall, I would say the genre is still heavily revolving around anything drama because it just serves this dopamine cycle for shorter format for the smaller screens. So drama right now, I would say, would be the number one genre in this space right now.

7:45Matt Belloni:It's funny that we're talking about this because obviously Quibi was trying a version of this five years ago, six years ago, and they flamed out after six months in part because everything was just so expensive. And I don't think people were quite willing to go to a separate app to watch the kind of stuff that they could watch on YouTube. But you do have a separate app and you guys are getting people to go to this. Is it just that the model has changed and you can only do this kind of content on a hyper micro budget model? Is that the secret sauce here? A lot of things have changed since Quibi.

8:24For example, during COVID, people really started to cultivate this habit of scrolling on their phone, and they started to consume content in a very different way compared to before. I think that really helped people getting used to this mobile-first format with the vertical dramas. Also, yes, the shows are made really cheap. I think we're looking at around$2 ,000 per minute.

8:53Matt Belloni:$2 ,000 per minute. How is that possible? I think people in Hollywood are going to hear that and their jaws will drop because you can't get out of bed for less than a couple million dollars an episode for a typical Hollywood show. And these are being made at a price. I mean, obviously you're not using union labor. You are not using locations. You're filming a lot of these in the same place. But you oversee. How many do you oversee now? Like how many are going at a given time? Right now, I think we have around 16 shows in different various stages. Last year, my team produced over 80 shows and launched them online.

9:33Matt Belloni:And how do you do them so cheap? I think, first of all, like you said, we do non-union. Second of all, because it is for a smaller format, it is for the phone screen. I think in the early days, in early 2023, we were outputting 540p resolutions. But now, you know, the platform's really optimized the streaming. So now we can do 1080p like before. But still, I think what matters shifts when you're doing a mobile-first content. For example, you don't need a vast location anymore because the screen is so narrow. You focus more, you put more resource on costume, makeups, and very attractive actors.

10:14So those all contribute to a smaller budget. Of course, we're still treating people nicely. We do 12-hour shoot days and all that, but it is definitely nowhere near as the union scale.

10:26Matt Belloni:Hot people can go a long way. Yes, exactly. So do you have the typical audition process? What do you pay an actor for 12 hours of work? In the beginning, early 2023, you pay$400,$500 for a 12-hour shoot day for the main leads who nearly appears in every single scene. So they're basically working for 7 to 10 days, 12 hours a day, nonstop. But now, you know, we're starting to have a quote-unquote a list in the space now who have several hit shows under their belt, who are, I think I'm seeing as high as$2 ,500 a day for lead talent. But I think most of them are still ranging from$1 ,000 a day. these are not SAG-AFTRA actors.

11:15Matt Belloni:And presumably, if you want to make it in the industry, you want to ultimately be in the unions. Do these performers for your movies, your microdramas, do they fear that they're not going to be able to get into the big guilds when they're doing this kind of work? Or have you found that the guilds recognize that this is sort of entry-level stuff and that someday these people can be in the traditional Hollywood guilds? That's a really good question. I think in the beginning, people are stepping into this industry because first of all, it was in the beginning of 2023. It was during the strike and a lot of people are fresh faces trying to make it, but found no work in Hollywood.

12:02Matt Belloni:Yeah. Well, that's persisted. Yes. And they rather start working and paying their rent than sitting at home drinking coffee. So I think that's what propelled a lot of people to enter the industry, not only the talents, but also crews, any creative, key creatives to enter the space in that early stage. And in 2024, last year, and now it is starting to become a consistent, sustainable work for a lot of people. So I think the guild is also catching up. I don't know if you've heard, but last year SAG basically put out a SAG agreement for vertical dramas. And I think we're in that kind of twilight zone right now where we don't know where the format belongs.

12:46But I do feel like it's not stopping people from being able to enter the guild if they want to. And eventually we will.

12:54Matt Belloni:You're getting the talent that you want. Yes. Yes, we are. What about writers? Sorry, I just want to add one more. We definitely want to work with union actors, of course. But right now, we're not tapping into that pool yet. Well, you're going to have to pay for them. And the budgets will go up. It could throw off your entire model. All of a sudden, you got Teamsters taking people in golf carts from one place to another and charging you$30 an hour. Yeah, that is a luxury for sure in this space. Writers. because it's a particular skill to be able to build to some kind of a cliffhanger every 90 seconds.

13:31Matt Belloni:And it's a unique way to watch this stuff and it's a unique way to write. So is there a community now of micro drama writers that are just very good at this stuff? Like where do you find your writing talent? Yeah, I think for writers, it might surprise people because in the early days, I started with this company called Real Shore in my early days. And I found that a lot of writers in that company are actually having a game background. So they either wrote for visual novels or interactive novels in the beginning. So they're not screenwriters. And for vertical drama, they transitioned from that space to film and TV, which is very interesting.

14:17And I think they're one of the earliest writers in the space who came from web novels and interactive novels. And now more and more actual screenwriters are also entering into the space. But definitely we're seeing a learning curve here because this format is just so mobile driven. It is so emotional driven. So it's not plot driven. So it is basically, I think it is different than a lot of the things that are taught in film schools right now.

14:48Matt Belloni:So this is in the long tradition of soap operas. This is basically a spliced up, emotionally driven soap opera, largely for women. They can watch late at night if they're lying in bed, you know, fantasizing. And this is like the next iteration of that. Yes. All right. So this is all about a scale business, right? It's not about the individual. So how long does it take to shoot a 120-minute microdrama show that's going to be split up into 50 segments? Are you doing one of these a week? Is this like the Hallmark holiday movie pipeline where it's just bang them out in two weeks? What is it? Oh, it is very similar to the Hallmark pipeline.

15:30Actually, we see a lot of talent and crews that came from that space. That's not a surprise. Who work really well in this space right now. Yes. So yeah, so I can maybe just take you from the top, like from script ideation to ready for production. That normally is a month and a month and a half process. And once the production team get the script, they normally have a three to four weeks prep. That's a good amount of prep in this space. And then they shoot the, you know, a hundred pages script in the time span of seven to 10 days. and after that, posts would take around a month or a month and a half.

16:08So in total, you're looking at around four months from script ideation to screen. So that's the turnaround for these kinds of projects.

16:17Matt Belloni:That's about what I would expect. Someone screams in a meeting, he's a billionaire, but he also has a secret, but he also has a secret child and then the child comes back and then boom, you're off. Right, right, yeah. Very, very, very accurate. I'm auditioning right now. I could do this on the side.

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18:05Matt Belloni:This episode is brought to you by Spectrum Business. Fast, reliable internet means everything for your business and even this podcast. That's why I trust Spectrum Business. They keep companies of all sizes connected with internet, advanced Wi-Fi, phone, TV, mobile services, plus 24-7 US-based support. Millions of business owners already trust Spectrum Business. So visit spectrum.com slash business to learn more. Restrictions apply. Service is not available in all areas. This is screaming for AI, is it not? How is AI going to impact the production of these micro dramas? First of all, AI has always been that kind of sword hanging over our head in the past two years.

18:49Matt Belloni:Because it could completely disrupt you, but it also could be a big tool. and there's no rules, there's no guild rules preventing you from putting some prompts into ChatGPT and saying, make it like my best friend billionaire, but have it be set in the Bahamas. And all of a sudden, ChatGPT spits out a script. Right, I think that is sort of what a lot of the platforms are dreaming of because, you know, way easier for them to produce more scripts. But still, like, I'm not seeing that being used in this way yet because I think AI is just still not able to write in the way that human writes right now even though yes we do a lot of kind of reboots quote-unquote and reskins or reiterations of the same storyline but you can still clearly see that human when you need the human creatives to take part in this to have some heart into the process and to be honest I think in the early days some of the platforms actually tried the way you said, and it did not output anything that's even legible for any production to use, for any platform to seriously consider using them.

20:06But on the other hand, AI has been very, very helpful for post-production, for the post-production workflow. It's helping with optimizing the quality of a lot of VFX, and that's been actually in practice right now as we speak. But we know how cautious we want to be around this area. You don't want to feed any actor's image into the AI and regenerate anything like that.

20:33Matt Belloni:You don't do that. You don't combine your five hottest actors into one AI-created super hot actor? Definitely not because we know if we do that or any of the platforms do that, that will create a lot of ethical issues, basically. And that's not something we want to step into. But, you know, if we're making a werewolf show and we need a really good-looking werewolf, we can generate that through the AI. And that's fine. Yeah, that's really funny. Why should traditional Hollywood filmmakers explore this format? I think you must know that, you know, Fox Entertainment recently took an equity stake in Hollywood, which is the company behind my drama.

21:15And they're committed to producing 200 vertical series.

21:18Matt Belloni:Don't you guys have a small investment from Disney? I mean, you were part of the accelerator program at Disney. So what does that entail? Are they involved in helping you? Are they, you know, you say you want to work with more Hollywood talent. Is Disney helping you there? Well, I think we're definitely trying to find a middle ground or it's a mutually learning process. We're kind of feeding into that curiosity from the whole industry about this genre, about the business model, because I think even before last year, vertical drama is still very, very niche. And I think last year at some point we hit the tipping point where the mainstream media starts to take note of what's happening right now in this space.

22:00And a lot of them are curious. A lot of them want to know more about how the business operates. How are we able to make the show so cheap and also make money? How does marketing works? And that's sort of an ongoing process where we're exchanging a lot of information with our partners. But yeah, back to your question, why should Hollywood care? Why should Hollywood people join in on this style or this new format? I guess, I think it is the future of storytelling, but it's not going to completely replace traditional legacy media. So for anyone who's interested to just explore a new outlet of telling stories, they can try they can drive i think it's really fun because i also come from a film background i went to film school at usc i worked at in development from at ternan's entertainment and three body universe and before that i just never heard of a thing of vertical drama um so once i i discovered this is completely a different business and this is high frequency narrative and compared to legacy media where you develop a story and you make it in five to six years, we make several shows in four months.

23:18And on day three of the release, we're able to learn whether it's a hit or it's a flop. So it is a very fast cycle and it is high frequency.

23:28Matt Belloni:That could be appealing to Hollywood people who are often so frustrated by how long things take. And you can work on a project for 10 years And finally, it either comes to a decision on you, whether you make it or you're not like here, you get some at least, you know, the ambition is obviously much lower than your typical Hollywood production. But you guys are upfront about that. And it's not, you know, it's not like you're pretending that you're making art here. You are making emotional driven videos that will appeal to the audience and the data will tell you where to go. I've read interviews with you where you said that the biggest challenge is customer acquisition costs.