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China's $5 billion micro drama industry is booming

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Bytedance and competitor Kuaishou ( KUASF ) among successful first

movers

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Companies with Chinese ties creating short videos for U.S.

customers

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Micro dramas often feature revenge or rags-to-riches

stories

By Antoni Slodkowski

ZHENGZHOU, China, Sept 21 (Reuters) - On a film set that

resembles the medieval castle of a Chinese lord, Zhu Jian is

busy disrupting the world's second-largest movie industry.

The 69-year-old actor is playing the patriarch of a wealthy

family celebrating his birthday with a lavish banquet. But

unbeknownst to either of them, the servant in the scene is his

biological granddaughter.

A second twist: Zhu is not filming for cinema screens.

"Grandma's Moon" is a micro drama, composed of vertically

shot, minute-long episodes featuring frequent plot turns

designed to keep millions of viewers hooked to their cellphone

screens - and paying for more.

"They don't go to the cinema anymore," said Zhu of his

audience, which he described as largely composed of middle-aged

workers and pensioners. "It's so convenient to hold a mobile

phone and watch something anytime you want."

China's $5 billion a year micro drama industry is booming,

according to Reuters' interviews with 10 people in the sector

and four scholars and media analysts.

The short-format videos are an increasingly potent

competitor to China's film industry, some experts say, which is

second in size only to Hollywood and dominated by state-owned

China Film Group. And the trend is already spreading to the

United States, in a rare instance of Chinese cultural exports

finding traction in the West.

Three major China-backed micro-drama apps were downloaded 30

million times across both Apple's App Store and Google Play in

the first quarter of 2024, grossing $71 million internationally,

according to analytics company Appfigures.

"The audience only has that much attention. So obviously,

the more time they spend in short videos, the less time they

have for TV or other longer format shows," said Ashley

Dudarenok, founder of a Hong Kong-based marketing consultancy.

The leader in the space is Kuaishou ( KUASF ), an app that accounted

for 60% of the top 50 Chinese micro dramas last year, according

to media analytics consultancy Endata.

Kuaishou ( KUASF ) vice president Chen Yiyi said at a media conference

in January that the app featured 68 titles that notched more

than 300 million views last year, with four of them watched over

a billion times.

Some 94 million people - more than the population of Germany

- watched more than 10 episodes a day on Kuaishou ( KUASF ), she said.

Reuters was not able to independently verify the data.

Initial episodes on such apps are often free, but to

complete a micro drama like "Grandma's Moon," which has 64

clips, audiences may pay tens of yuan.

Douyin, the Chinese version of TikTok which is owned by

internet technology firm Bytedance, is also popular with micro

drama fans.

Alongside other major Chinese social media apps like

Instagram-like Xiaohongshu and YouTube competitor Bilibili ( BILI )

, it has announced plans to make more.

In the United States, micro drama platform ReelShort, whose

parent company is backed by Chinese tech giants Tencent ( TCTZF )

and Baidu ( BIDU ), has recently outranked Netflix ( NFLX ) in

terms of downloads on Apple's U.S. app store, according to

market researcher Sensor Tower.

"China discovered this audience first," said Layla Cao, a

Chinese producer based in Los Angeles. "Hollywood hasn't

realised that yet, but all the China-based companies are already

feeding the content."

'LOW-BROW AND VULGAR'

Many popular micro dramas, including "Grandma's Moon," have

narratives that revolve around revenge or Cinderella-like

rags-to-riches journeys.

Tales of how circumstances at birth are deterministic and

can only be changed by near-miracles have struck a chord with

viewers at a time when upward mobility in China is low and youth

unemployment high.

The micro dramas often "show people who one day are lower

class and the next day become upper class - you get so rich that

you get to humiliate those who used to humiliate you," said a

26-year-old screenwriter known by her pen name of Camille Rao.

Rao recently left her poorly paid job as a junior producer

in the traditional film industry for what she described as the

more dynamic and less hierarchical world of micro dramas. She

now writes and adapts scripts for the U.S. market.

"Social mobility is actually very difficult now. Many people

perceive this as a social reality," said Xu Ting, associate

professor of Chinese language and literature at Jiangnan

University.

This has fuelled interest in stories about billionaires and

wealthy families, she added: "Everyone desires power and wealth,

so it is normal for these type of stories to be popular."

In the U.S. market, by contrast, fantasy stories about

werewolves and vampires are particularly popular, several

creators told Reuters.

The boom in micro dramas in China has brought scrutiny from

the Communist Party.

Between late 2022 and early 2023, the National Radio and

Television Administration regulator said it organised a "special

rectification campaign" during which it removed 25,300 micro

dramas, totalling close to 1.4 million episodes, due to their

"pornographic, bloody, violent, low-brow and vulgar content."

As Chinese leader Xi Jinping promotes values such as loyalty

to the Communist Party and heteronormative marriages, the

state-owned China Women's News outlet in April complained that

some micro dramas "portray unequal and twisted marriage and

family relationships as a common phenomenon" and "deviate from

mainstream social values."

In June, the government began requiring some creators to

register micro dramas with NRTA. The regulator didn't respond to

Reuters' questions for this story.

Key to the commercial success of these films are plot twists

that keep people paying as they scroll while commuting or in

line at a grocery store. Episodes often end with a hook - such

as a boyfriend walking in on his partner with another man - and

viewers have to pay for the next episode to find out what

happened.

"The plot of these micro dramas is exaggerated," said Zhu,

the actor. "It has plot reversals, it's nonsensical, so it

catches people's attention and a large audience wants to see

them."

Zhu is a lover of cinema and an avid fan of Ingrid Bergman

in "Casablanca". Like many of his colleagues in micro dramas, he

thinks the genre has limited artistic value. "I see it as fast

food: a longer drama is a kind of sumptuous meal, and a micro

drama is fast food."

But its dedicated viewers disagree. Huang Siyi, a

28-year-old customer service agent, said she enjoyed watching

romantic micro dramas because "the acting is good and the male

and female leads are good-looking."

"It's easy to be obsessed with micro dramas," she said.

EXPLOSIVE GROWTH

Vertical filming and distribution through social media apps

mean micro dramas can be made with small overhead costs. Budgets

for such films range from between $28,000 (200,000 yuan) and

$280,000 (2 million yuan), according to market researcher

iResearch.

In the central Chinese city of Zhengzhou, "Grandma's Moon"

is being made with a compressed budget and timeline. When

Reuters visited the set in July, the filming day stretched until

2 a.m. The crew then moved to a new location and began shooting

again at 7 a.m.

The show was shot in just six days, and Zhu, a muscular man

with a wide smile and boundless energy, says he plays table

tennis after hours to keep up with the young crew on set.

"We'd need to take two to three years to distribute one

traditional TV series of film, but we only need three months to

distribute a micro drama, saving us a lot of time," said Zhou

Yi, a showrunner at Chinese gaming giant NetEase ( NTES ),

which also makes micro dramas.

As micro dramas gain in popularity, actors' salaries have

also grown. Leading roles used to pay $280 a day, said Zhu,

adding that main actors in big productions can now make more

than double the rate, though extras earn as little as $17 daily.

A retired railway employee who started acting in the 1970s

in a theatre troupe attached to the unit where he worked, Zhu

now lives off his pension and occasional acting gigs.

Many Chinese micro drama producers have their eye on Western

markets, where cultural exports from China have often struggled.

NetEase ( NTES ) last year started making productions for the U.S. that

it distributes via an app called LoveShots; the made-for-export

films aren't typically available in China.

Micro dramas designed for the West are often made by

production and acting crews in Los Angeles and shot on location.

The scripts, which are in English, may also revolve around

themes of wealth, cheating partners and miracles.

One of the latest micro dramas on LoveShots is about a woman

who, after years of being paralysed, miraculously regains her

ability to move - and walks in on her husband cheating on her.

(Additional reporting by Beijing Newsroom, Tingshu Wang and

Xiaoyu Yin; Editing by Katerina Ang)