Obs.

The Global Rise of Vertical Short Drama Platforms (2/2)

Real Reel™

15 Aug 2025 — 3 min read

In Part 1, we explored:

The definition of international vertical short dramas and their two main content types: local dramas and translation dramas.
The factors driving market growth globally.
The differences between translation and local production in terms of cost, ROI, and audience impact.
The top platforms worldwide and their performance in revenue and downloads.

This second part covers:

Regional market breakdowns for revenue and downloads.
The main monetization models in use and how they perform in different markets.
Emerging trends such as the rise of local production, animation/interactive formats, and AI-driven content creation.

Regional Landscape: Where the Users and Money Are

International short-drama revenue and downloads vary widely by region:

United States — The largest source of in-app revenue (about $58 million in May 2025) and one of the highest ARPU markets. The lifetime value of an American user can be up to six times higher than in other regions.
Japan — A smaller but loyal market (~$11 million in revenue) with moderate downloads. Japanese audiences respond well to locally produced content.
Southeast Asia — Second in downloads (over 23 million) but with lower revenue per user. Cultural proximity to Chinese-origin stories keeps translated dramas popular, while ad-supported models dominate.
Latin America — Leads in downloads (28 million) but generates modest revenue due to widespread freemium usage. Platforms often offer several free episodes before prompting payment.
South Korea and the EU — Smaller in scale but notable for high production standards and demand for adapted local content.

Business Models

Three main monetization models have emerged:

IAA (In-App Advertising) — Fully ad-supported, common in price-sensitive markets.
IAP (In-App Purchases) — Users pay to unlock content, prevalent in high-income markets with strong subscription habits.
IAAP (Hybrid) — A mix of free content, paywalls, and rewarded ads, balancing reach and revenue. This is currently the dominant model globally.

In May 2025, global short-drama platforms ran around 520,000 creative ad assets, a 4% increase over April, while the number of active advertising apps dropped slightly to about 262, as smaller players exited the market.

Emerging Trends

1. Rise of Local Production
Local productions are gaining momentum in the U.S., Europe, Brazil, and beyond. By Q1 2025, 80% of the top 20 international short dramas by revenue were locally made, showing a clear shift toward culturally specific storytelling.

2. Animation and Interactive Formats
Animated short dramas, blending comic-style visuals with episodic plots, are in early growth stages, reminiscent of live-action’s rise in 2023. Studios are also experimenting with interactive storylines to boost engagement.

3. AI-Driven Content Creation
Since early 2024, multi-modal AI tools like OpenAI’s Sora have entered the scene, enabling rapid script generation, character creation, scene design, and even 1080p video clips. While they can cut costs and speed up localization, they still face challenges in long-form coherence and copyright management.

Outlook

The global short-drama market is maturing but remains far from saturated. Expect:

Continued dominance of hybrid monetization models.
Increased localization through investment in local writers, actors, and production teams.
Platform consolidation as marketing costs rise and smaller players merge or disappear.
Wider AI adoption, enabling even small teams to create high-quality, globally distributed series.

For creators, investors, and platform operators, the message is clear: short dramas are becoming a mainstream entertainment format worldwide, and the next wave will be defined by how well content connects with local audiences, no matter where the story starts.