Micro-Drama revenues in China set to surpass Box Office in 2025

By the end of the decade, advertising is projected to generate 56 percent of this income, while subscriptions will account for 39 percent and commerce for 5 percent. Across the world, the micro-drama market produced $1.4 billion in 2024 and could reach $9.5 billion by 2030, an annual growth rate of 28.4 percent. Subscriptions and in-app purchases are expected to remain the main revenue source at 74 percent, while the share of advertising will rise to 25 percent and commerce to 1 percent.

Micro-dramas are now a key part of Chinese entertainment. Revenues are on track to surpass $9.4 billion in 2025 as the audience expands beyond 830 million people, nearly 60 percent of whom already pay or make transactions.

The industry is led by ByteDance’s Red Fruit, Tencent’s WeChat Video Accounts and Kuaishou’s Xi Fan. Each company has developed dedicated short-form drama apps that operate separately from long-form video services and are closely linked to social networks and payment systems. They rely heavily on intellectual property from platforms such as COL, China

Literature and Tomato Novel, turning popular web fiction into serialized vertical dramas. A new premium phase is emerging with production budgets that often reach between $400,000 and $600,000 and with growing potential for franchises. Artificial intelligence is increasingly used throughout the value chain, from personalizing content discovery and testing genres to creating branching storylines and generating viral loops. Around the world, AI is still applied mainly for localization and dubbing, but its role in reducing costs is expected to grow.

The United States is the most lucrative market outside China, generating $819 million in 2024 and projected to reach $3.8 billion by 2030. Uptake there is strongest among affluent urban women aged 30 to 60 who are drawn to stories of romance, powerful executives and revenge.

DramaBox reported $323 million in revenue and $10 million in net profit in 2024. Rival ReelShort achieved a larger scale of about $400 million in revenue but remains unprofitable because of high marketing expenses and amortization.

Japan is emerging as the biggest Asia Pacific market after China and is forecast to exceed $1.2 billion in revenue by 2030, supported by the integration of LINE Pay and an increasing volume of local productions. Southeast Asia and Latin America show strong growth potential, while India remains in an exploratory stage as both domestic and international platforms test the market.

“Micro-dramas have evolved from a niche experiment into a multibillion-dollar global category,” said Vivek Couto, Executive Director of MPA. “Production is inexpensive, but distribution is costly, so success depends on speed, scale, and repeatable intellectual property. China’s ecosystem demonstrates the power of combining content with social and payment networks, while the United States proves the model’s global appeal.

“Markets such as Japan, Korea, India, Southeast Asia, and Latin America are next. The winners will be those who control distribution and monetization channels, manage customer acquisition costs, and build sustainable intellectual property pipelines,” he added.