Chinese-made short dramas boom in overseas markets
Insights into Chinese-made short dramas boom in overseas markets: trends, challenges, and opportunities
Chinese-made short dramas are taking the overseas markets by storm, particularly in North America, with apps like Reelshort leading the way. These drama episodes are known for their simple, dramatic, often cliché but fast-paced storylines. They have gained popularity in China's internet landscape over the past few years due to their addictive ability to capture the audience's attention. However, the rapid expansion of short drama companies in China has resulted in a saturated domestic market and stricter regulations. Profit distribution and copyright disputes, caused by changes in cooperation models between platforms and production companies, have become challenging issues to resolve. Consequently, there is a need to shift focus to the international market.
Recently, there has been a surge in the popularity of Chinese-made short dramas in the overseas market. These dramas are localized with Western accents and faces, while still retaining the familiar themes and storylines from Chinese web novels. If you are interested in getting a sense of what these short dramas look like, feel free to check out one of the most popular series called The Double Life of My Billionaire Husband on YouTube.
The burgeoning cultural exports with distinct Chinese characteristics, however, face various challenges such as high production costs, content supply, actor availability, and platform accessibility in overseas markets. Despite these challenges, there is untapped potential in the overseas short drama market, and companies are leveraging their resources to demonstrate business innovation prowess to grab a slice of the pie in this booming industry.
In today’s post, we share one of the widely read independent blogs on WeChat to offer insights into the trends, challenges, and opportunities of recent Chinese-made short dramas boom in overseas markets.
Below is Baiguan's translation of the original article:
Overseas markets get fleeced by the storyline of trophy wives in China’s soapy micro-series
"We’ll give you the money if you marry Sebastian Klein in my place."
The female protagonist is forced to marry the "notorious" male protagonist due to her mother's serious illness and urgent need for substantial funds. The male protagonist, who has a rumored reputation as a loser after a prison stint, is later revealed to be a secret billionaire. This storyline is taken from the popular overseas micro-series called The Double Life of My Billionaire Husband on YouTube.
After being "repackaged", the sundry elements of family feuds, trophy wives, high-handed CEOs, dual identities, and so forth, which are already familiar and somewhat "old-fashioned" to Chinese audiences, render foreigners hooked on them and can’t get enough of the suspense and plot twists.
These cheesy plots are not only “fleecing” foreigners by paying for viewing, but also propelled Chinese online short drama app Reelshort to surpass TikTok, claiming the top spot on the US iOS entertainment chart for a period of time. Open this app, and you will see these cheesy words such as "Spoiled Wife," "Noble Family Life," "I' Got Married Without You" and so on.
According to TechCrunch, an overseas business and technology media, as of November 2023, ReelShort has reached a total of 11 million downloads on both iOS and Android, with a net revenue of 22 million dollars.
Although ReelShort's current ranking on the iOS entertainment chart has dropped to around ten, its brief rise to the top has undoubtedly showcased the enormous potential of the overseas short drama market. This is especially significant in the Chinese context, where the domestic short drama industry faces considerable challenges and increasingly stringent regulations.
"In the past few months, the overseas short drama market has become more active," said Lu Guangzhong, Deputy General Manager of Shui Ye Da Shan, a company specializing in customizing overseas short dramas, to reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular WeChat financial media platform in China known for its insightful perspectives]. Lu added, "Companies with numerous domestic short drama projects are actively seeking cooperation with overseas platforms; Additionally, the demand for our overseas short drama production has also increased several times compared to the first half of the year."
China's domestic industry groups, along with social platforms like WeChat Moments, Xiaohongshu, and Weibo, are inundated with information regarding cooperation opportunities for exporting short dramas. Both local and international production teams are currently overwhelmed with work. According to a report by The Paper [Baiguan: The Paper refers to an influential online media outlet in China and Chinese-speaking regions], more than 90% of Chinese film and television teams in Los Angeles are involved in casting for short dramas, and the directors' schedules are typically arranged for the period after March next year.
Similar to the discovery of a new continent, people are eagerly diving into the vast ocean of overseas short dramas, hoping to strike it rich overnight. The target audience for these dramas has expanded beyond North America and Europe to include countries like Japan, South Korea, and Brazil. However, it seems they have forgotten that setting sail from the harbor does not always guarantee smooth sailing; there may be hidden reefs and rough waves along the way.
Chinese short dramas sought their luck abroad and became a surprise hit
Although short dramas boom in overseas markets in recent months, they are not a new concept that debuted in China. Early works like Shock Me and Life Plays Tricks On Me can be considered micro-dramas. As the format of short dramas continues to evolve, a clearer and more profitable business model has emerged. This model involves soapy micro-series primarily hosted on WeChat mini-programs or apps, presented in a vertical screen format, with each episode lasting less than two minutes. The storylines of these micro-series are relatively continuous and complete. The first 10-20 episodes are free, but subsequent episodes require payment to unlock and watch further instalments.
In this fast-paced and content-driven era, users in the lower-tier market highly appreciate this format, leading to numerous “strike gold” legends. For example, the epic drama called Unparalleled had a production cost of less than 500,000 yuan. However, within 8 days of its release, the recharge amount exceeded 100 million yuan.
It goes without exaggeration that short dramas took the overseas market by storm in 2023 and struck a great deal of wealth.
According to media reports, the daily recharge amount generated by paid short dramas on domestic platforms is approximately 60 million yuan. During holidays, this amount can even exceed 100 million yuan. Data from Ocean Engine [Baiguan: Ocean Engine is a comprehensive digital marketing service platform of TikTok Group] reveals that as of November 2023, there are over 4,000 registered micro-dramas in China. These micro-dramas contribute to a daily turnover of 80 million yuan in the short drama market.
However, the boom came to a sudden halt in November 2023 when a crackdown on online micro-dramas occurred. Stricter requirements for releasing short dramas were implemented, leading to the removal of over 20,000 illegal micro-dramas. As a result, the once chaotic and disorderly domestic micro-drama industry has been thoroughly cleaned up.
How can practitioners in the online micro-drama industry hedge against the challenges?
Some companies continue to penetrate the domestic market by producing more refined short dramas, while others have shifted their focus overseas.
"Many companies that previously held domestic short drama projects and waited for a good price are now desperately trying to sell them at low prices to Southeast Asia, the Middle East, and other overseas video platforms," said Lu Guangzhong. "They used to ask for five thousand yuan, but now they might sell it for only one or two thousand."
In addition to the flourishing market for short drama copyright transactions, platforms, and production companies are actively seeking change by starting to produce targeted dramas for both domestic and overseas markets. One such company is Shui Ye Da Shan, which specializes in customizing overseas short dramas.
This short drama production team, established in 2019, consists of less than 40 members. They have previously worked on game-buying video services and domestic mini-program short drama business. Since April 2023, they have commenced collaborating with novel websites such as Dianzhong and Jiashu to specialize in customizing overseas short dramas. Currently, they have finished four European and American short dramas.
Lu Guangzhong, the Deputy General Manager of Shui Ye Da Shan, explained the reason for shifting their business focus overseas. He stated that it is closely related to the changing cooperation model with platforms this year. "Starting from 2023, platforms are increasingly expecting production companies to finance half or all of the production costs for short dramas, thus transferring more risks to the production companies. However, the domestic market for short dramas has become saturated, resulting in a decline in their popularity. On the other hand, there is enormous and untapped potential in the overseas markets.”
The transformation of the cooperation model involves issues of profit distribution and copyright disputes. For example, the production party transitions from a supplier role to a project shareholder, and the revenue model shifts from a simple production fee to profit sharing. Yet most short drama platforms do not provide transparent back-end data, making it difficult to assess the fairness of revenue sharing.
Another example is that after the production party becomes a project shareholder, the capital relationship behind a short drama becomes complex, from the script to the production team, and then to the platform. Allocating copyright in this scenario is also a hard nut to crack.
Instead of the production side, it may be the heads of online literature and short drama companies who have detected the hidden crisis beneath the "calm water surface" earlier.
Several production companies with experience in producing short dramas overseas mentioned that they had been introduced to the business of exporting short dramas through their communication with nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives]. They revealed that many top online literature or short drama companies had been formulating relevant strategies and releasing production demands, creating opportunities for collaboration.
The above-mentioned short drama product ReelShort was launched overseas as early as August last year. This app is developed by Crazy Maple Studio, the overseas subsidiary of Chinese digital publishing company Chinese Online, and focuses on localizing short dramas for overseas markets. After nearly a year of survey, it finally produced the hit drama "The Double Life of My Billionaire Husband". Currently, the compilation video of the first ten episodes of this drama has reached an impressive 5.88 million views on the platform.
"The underlying logic of short dramas is to meet users' needs for fragmented and fast-paced content consumption. This demand is universal among humans, and we believe there is untapped potential in overseas markets as well. Additionally, our team members possess talent and resources in areas such as production and traffic distribution in overseas markets, making it natural for us to export products after producing short dramas domestically," said Chen Yiyuan, Chairman of Hangzhou Guanguan Holdings Group Co., Ltd., in an interview with reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives]. "We began building a team to expand our overseas business in June of this year, and in October, our self-developed overseas short drama product GGTV was launched. As of mid-November, the number of registered users has exceeded 1.5 million.”
Thus, the sundry production teams start to collect scripts and search for overseas projects, hoping to grab a slice of the pie in the booming overseas short drama market.
Giants v.s small and medium-sized platforms: two different worlds
Regardless of whether it is in China or abroad, the short drama industry indeed began to gain popularity in the middle of 2023.
data.ai Intelligence [Baiguan: data.ai Intelligence refers to the 1st Unified Data AI Company to combine consumer and market data with the power of artificial intelligence to fuel insights] indicates that the surge in overseas short video application downloads started in May 2023. By extensively promoting and advertising ReelShort, the overseas downloads of popular short video applications approached 3 million in July, with a month-on-month growth rate exceeding 300%.
According to the recollection of Ye Xin, an overseas short drama producer, during May and June of 2023, while he was in contact with overseas drama projects, he discovered that several top platforms were beginning to expand into the overseas market. However, his colleagues around him were primarily focused on studying the domestic drama market with great enthusiasm and rarely discussed exporting short dramas.
In the second half of the year, several overseas production teams informed reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives] that they had observed an increase in the number of project demands they were receiving.
Chen Xiufeng, co-founder and executive producer of Shanghai Funcola Culture Media Co., Ltd., expressed his amazement after discussing overseas cooperation with multiple platforms. He noted that there was a high level of enthusiasm among everyone involved, with some platforms currently developing apps and others preparing for imminent launch. Meanwhile, Funcola has been laying the groundwork since August and has already released two short dramas overseas in just three months.
However, Lu Guangzhong mentioned that the overseas short drama market is still in its early stages of development. The main investors in localized short dramas are primarily the top platforms with financial backing, while others are mostly spectators who are hesitant to invest. These platforms primarily acquire domestic short dramas that are suitable for the overseas market in terms of themes and production, aiming to enhance their own apps or websites.
"The current business model of overseas short dramas is not very mature yet, and the production costs are high. The actual demand for projects given to production teams is limited, so many small platforms adopt a 'wait and see' attitude," said Lu Guangzhong.
Instead of exhausting all resources to shoot localized short dramas overseas with high costs, small and medium-sized online literature and drama companies prefer to revitalize their existing dramas by exporting them to the overseas market.
Vswork market partner Zhang Shanshan, who focuses on online literature and short drama platforms, told reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives] that they have currently created a website on Google specifically for domestic online literature and short dramas. They have already launched hundreds of short dramas and feel that more projects are using AI technology for translation and dubbing, compared to the localization of short dramas that often cost tens or even hundreds of dollars. Their short dramas only cost a few dollars to watch and complete.
According to Zhang Shanshan, a market partner at Vswork specializing in online literature and short drama platforms, they have recently developed a dedicated website on Google for domestic online literature and short dramas. They have already released hundreds of short dramas and have observed a growing trend of projects utilizing AI technology for translation and dubbing, instead of the costly process of localizing short dramas. Their short dramas are accessible for viewing at a significantly lower cost, with each view priced at just a few dollars.
However, Zhang Shanshan also pointed out that the pay rate for translating short dramas is low. This has led to the consideration of shooting localized short dramas instead.
Small and medium-sized domestic online literature and short drama companies have indeed expressed the need for localized short drama production. However, they often struggle to reach an agreement with overseas production companies due to their limited budget. Deng Dongli, the founder of Misty Forest Production Ltd., stated that the market price for outsourcing a short drama in the UK is typically between $60,000 and $80,000, while smaller platforms may only provide a budget of $20,000 to $30,000, which is insufficient to cover the production costs.
On the contrary, public information indicates that ReelShort currently releases approximately two short dramas per month, with a total of around 20 short dramas available on the platform. ShortTV updates 3-5 short dramas filmed overseas every month, with a total of 10 updates to date.
Chen Yiyuan informed reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives] that GGTV currently has over 100 domestic short drama adaptations, with a monthly production of more than 20 short dramas. They are also planning to shoot 10 North American dramas and are actively seeking cooperation opportunities this month.
A foreign short drama practitioner stated that the demand for overseas short drama projects is actually limited compared to domestic ones.
The media reports that some Chinese directors' schedules are arranged until after March next year because platforms tend to prefer experienced teams, and there are only a few of these teams available. While the overseas short drama industry may seem thriving, in reality, there is a limited number of people working in it. Both project demand and talent are also limited, with more spectators than active participants.
Is it a promising business?
To attract more overseas paying viewers, it has become a consensus among overseas short drama practitioners that localizing scripts, actors, and even shooting is necessary. However, this also means higher investment costs, especially in the current overseas short drama market where the business model is not clear.
Based on feedback from multiple professionals, reporters from nfc-yancaijing [Baiguan: nfc-yancaijing is a popular Wechat financial media platform in China known for its insightful perspectives] have learned that the production cost of an overseas short drama is approximately $100,000 to $150,000, with some variation depending on the region.
For instance, location fees in the UK are 2 to 3 times more expensive than in the US, but actors are relatively cheaper. However, the production cost of certain high-quality localized short dramas may be 3 times higher than domestic short dramas. If foreign actors are chosen to shoot in China, the cost can be kept below $150,000.
Unlike the Chinese market, which has clear user profiles and genre preferences, it remains unpredictable whether the localized short dramas will appeal to overseas audiences. Currently, the genre that has been proven to be successful is the Werewolf, a mythical creature in Western folklore. The image of the Alpha is widely used in various fantasy genres, including the recently popular short drama "Alpha of Aberdeen".
According to China News Weekly, Jia Yi, the founder of Crazy Maple Studio, stated that 70% of short dramas fail to attract attention, even though some of them have gained popularity. He and his team still have strong anxieties about creating a hit.
In general, production teams that have successfully created popular short dramas overseas are more likely to create the next hit. However, the nascent overseas short drama market leads to a scarcity of talent who understand the preferences of overseas audiences. As a result, experienced teams face soaring production costs.
Chen Xiufeng said, "Especially in New York and Los Angeles, the expenses for individual directors of popular short dramas have already increased to $20,000."
Furthermore, the high costs of overseas traffic placement have also plagued practitioners. It is known that the overseas channel fees are high, and if using Google in conjunction with an app, a 30% cost must be paid to the Google platform.
Chen Xiufeng added that including expenses for traffic placement, the cost of producing a short drama overseas can reach as high as 1 million yuan, which is 2 to 3 times higher than domestic production.
Overall, overseas short dramas are still a cash-burning industry that involves considerable capital.
Director Huang Mingxiao from Zhitao Film and Television Media Co., Ltd. [Baiguan: Zhitao is a short drama production giant in China], who is fluent in both Chinese and English, stated that the short dramas that captivate Western audiences, and for which they are willing to pay, are quite different from domestic short dramas. However, many people tend to easily lump them all together amidst overseas propagation, leading to deviations in the stages of implementation or production and yielding undesirable outcomes.
According to Lu Guangzhong, the high-cost issues mentioned above are due to the immature industrial system of overseas short dramas. For example, in terms of content supply, there are scarce teams overseas that can produce localized and authentic short drama scripts. Similarly, limited production teams can capture the enjoyable aspects and meet the aesthetic demands of overseas audiences, both of which are crucial in determining whether the audience will pay for views.
Another issue is the high cost of ad placement, which is caused by the insufficient functionality of various platforms for overseas advertising. Lu Guangzhong said, "Without strategic ad placement, it is difficult to achieve desirable data. Nowadays, major overseas channels lack convenient ad placement functions like those in China, and there are also fewer advertisers.”
As a result, customized overseas short dramas often fail to hit the market. Media reports indicate that some leading domestic platforms have released 19 unsuccessful short dramas, and there was even a platform that incurred a loss of 30 million yuan.
Challenges and opportunities in the overseas short drama market
Striking gold abroad is a tough nut to crack. In addition to the significant cost, short drama producers still face various challenges.
The first aspect is content supply including script writing and shooting.
When it comes to scriptwriting, China faces a shortage of exceptional scriptwriters who are familiar with overseas cultural environments and the selling points in English-speaking regions. Additionally, cultivating overseas script talents requires time. A particular overseas short drama writer once mentioned receiving an Alpha script targeted towards overseas audiences, but they were even confused with the basic character settings of Alpha, Beta, and Omega.
Lu Guangzhong also pointed out that overseas audiences have higher expectations for the rationality and logic of the plot development compared to the fast-paced plot of domestic short dramas.
Actors are another factor that bothers short drama producers. On one hand, the cost of hiring overseas actors is indeed higher than that of several hundred yuan domestically. On the other hand, overseas actors often prioritize their personal lives and have a lower willingness to work overtime. Even if they are offered additional compensation, they may not be willing to stay up late as agreed upon in an 8-hour work system. This could potentially hinder the progress of the production team in terms of efficiency.
According to Huang Mingxiao's recollection, while shooting a short drama in Europe, they noticed that the on-site efficiency was not satisfactory due to the European party culture. While the crew was occupied with shooting, Europeans were busy partying, with about twenty to thirty people squeezed into a small house.
Furthermore, the challenge of foreign actors' willingness to perform is also significant. Deng Dongli stated, "British actors are generally reluctant to perform choppy and hammy short dramas as they perceive it to be vulgar.”
Then comes the challenge regarding platforms that can tune in to short dramas.
In fact, domestic short dramas are primarily found in mini-programs, which provide a more convenient way to access them. Apps with a large user base, such as TikTok and Kwai, also have dedicated channels and payment links for these dramas.
Yet the overseas market lacks a mini-program ecosystem. Many overseas users still rely on using the Google search engine. If they want to watch short dramas, they are required to go to the app store, download an app, register, and pay to unlock content. Unfortunately, most overseas short drama apps have a limited number of shows available, making it challenging to retain users for an extended period of time.
In addition to widely used localized shooting strategies, numerous domestic companies have amassed a large number of novel intellectual properties (IP) and short drama productions. However, these companies face challenges such as a lack of overseas drama platforms and demands for voiceovers and face changing. According to Chen Yiyuan, "The number of languages the drama can be adapted to directly affects its market size, and the voices must closely resemble real human pronunciation and fit the character settings.”
According to Zhang Yi, Chief Analyst at iiMedia Research, short dramas actually target fundamental human nature, such as greed, vulnerability, and concerns. While short dramas have been successful in China, they also have significant market potential overseas. However, corresponding companies still need to explore suitable content, operations, and layout methods to truly seize a share of the pie in the overseas short drama market.
In this ever-changing era, no one can confidently answer this question. The only certainty is that the short drama market is a vast blue ocean with immense and untapped potential. As one player falls, another steps into the breach, tirelessly “fleecing” the promising overseas market like gold diggers, all hoping to strike it rich overnight.