“AI-Powered Production, IP-Driven Hits”: China’s Short-Drama Market Races Ahead as Rising Production Costs Draw Latecomer South Korea into the Fray

Global Short-Drama Market Surges on Booming Demand for Short-Form Content
Industry Leader China Consolidates Position Through AI Technology and IP Competitiveness
South Korea Turns to Short Dramas to Ease Production Costs, But Can the Sector Shed Its “B-Grade” Image?

The global short-drama market continues to expand. As short-form content consumption becomes an everyday habit, particularly among Millennials, Gen Zers and Generation Alpha, short dramas are attracting audiences with their brief runtimes, fast-paced plots and sensational storylines. China dominates the market, having built an ecosystem that combines low-cost, rapid production powered by generative artificial intelligence (AI) with the exploitation of web-novel intellectual property (IP). More recently, however, South Korea has also begun moving beyond the conventional high-cost production model and strengthening its competitiveness as a late entrant.

Rapid Growth of the Short-Drama Market

According to content industry sources on September 4, the global short-drama market has recently been expanding at a rapid pace. British market research firm Omdia projects that worldwide microdrama revenue will surge by approximately 27%, from $11 billion in 2025 to $14 billion this year. Microdramas are ultrashort serialized productions consisting of episodes lasting roughly one to three minutes and optimized for vertical smartphone screens. U.S. mobile market intelligence firm Sensor Tower also reported that global short-drama app downloads surpassed 850 million in the first quarter, up 140% year-on-year. In-app purchase revenue increased 20% over the same period to approximately $750 million.

This growth is largely attributable to the inherent characteristics of short-drama content. From the conceptual stage, short dramas are designed for mobile screens and an episode-by-episode payment model, drawing viewers in with free opening episodes before prompting them to pay for subsequent installments. Conflict is brought to the forefront from the first episode, while each installment ends with a device designed to generate anticipation for what comes next. Their brief runtimes also make them easy to watch while commuting or during spare moments, while their narratives concentrate heavily on provocative elements such as conflict, revenge and plot twists. “Short dramas retain viewers through rapid pacing and powerful cliffhangers,” an industry official said. “They are designed around the content consumption patterns of Millennial, Gen Z and Alpha audiences, who favor instant stimulation and immediate gratification.”

China’s AI-Powered Drama Production Pipeline

China leads the market. China’s microdrama market began expanding in earnest as demand for contactless video entertainment increased during the COVID-19 pandemic. It subsequently spread rapidly through the recommendation algorithms of ByteDance’s short-form platform Douyin and Chinese video platform operator Kuaishou, becoming a core pillar of the country’s entertainment industry. According to the China Netcasting Services Association and other industry bodies, China’s microdrama market is expected to surpass $16.7 billion this year. That would be 1.8 times the projected size of the country’s entire theatrical box-office market over the same period, estimated at $9.4 billion.

The Chinese industry’s central competitive advantage lies in the low-cost, high-speed production structure that has emerged since the adoption of AI. Chinese microdrama producers now use large language models (LLMs) to structure dozens of short episodes, while employing video-generation models, voice-synthesis tools and automated editing software to create content. Tasks previously performed by specialists in scriptwriting, filming, dubbing, visual effects and post-production editing are beginning to converge into a single “AI production pipeline.” According to Chinese content industry analytics firm DataEye, 221,900 AI short dramas and AI animated dramas were released in China during the first half of this year.

Table 1. Growth of China’s Microdrama Market

Sharp Increase in Hits Based on Established IP

Productions based on established popular IP have also become increasingly common. As mass-produced works churned out with AI struggle to attract audiences, producers are turning to robust storylines that have already undergone a degree of market validation. DataEye figures show that 19 of the 30 most popular AI short dramas and animated dramas on Chinese short-drama platform Hongguo during the first half of this year were based on novel IP, accounting for more than 60% of the total. Representative hits include “Chronicle of the Myriad Demons Atlas” (万妖图录传), “Exiled to the Frontier: The Convict’s Wife Reclaims the Wasteland and Raises a God of War” (发配边关，罪妻开荒养出战神) and “Treasure-Gathering Immortal Basin: The Mixed Spiritual Root Is the Real BOSS” (聚宝仙盆之杂灵根才是真BOSS).

Chinese web-novel and digital content companies are also accelerating efforts to open their IP portfolios in response to this market shift. Dianzhong Technology, a local mobile digital content company, announced its “AIGC Global Co-Creation Plan” at the 13th China Internet Audio-Visual Convention in April. AIGC refers to technology that uses AI to generate various forms of content automatically. Under the initiative, the company plans to invest $150 million in overseas markets and approximately $140 million in China to support the development of an AIGC content ecosystem, while opening some 80,000 high-quality web-novel IP titles in its portfolio to outside creators. Collaboratively produced content will receive minimum guarantees of up to approximately $21,000 in China and $50,000 in overseas markets. Distribution support will also be provided through Dianzhong’s global traffic network, including its short-drama platform Hippo Theater and drama platform DramaBox.

South Korean Content Industry Enters the Race

South Korea’s content industry has also entered the market as a latecomer, identifying short dramas as a potential escape route from the high-cost structure of conventional video production. The expansion of investment in original content by global over-the-top (OTT) streaming services in recent years has driven up the fees commanded by South Korean star actors and writers, along with filming and post-production expenses. The average production cost per episode of a South Korean drama climbed from approximately $74,000 in 2011 to $273,000 in 2013, $516,000 in 2020 and roughly $884,000 in 2023. Meanwhile, the number of dramas produced in the country declined from a peak of 141 in 2022 to 107 in 2024.

Short dramas offer a means of significantly reducing these production cost pressures. Choi Hyuk-jae, CEO of short-drama platform Vigloo, operated by South Korean content platform company Spoon Labs, said in an interview in May that “producing a single short drama in South Korea or Japan costs an average of approximately $110,000 and takes about three months,” adding that “the use of AI, in particular, can reduce production costs to between one-fifth and one-tenth of those incurred under conventional methods.” Unlike traditional dramas, which require investments of several million dollars per episode without any guarantee of commercial success, short dramas make it easier to establish a high-volume, validation-based business model in which multiple titles are produced with relatively modest capital before additional investment is concentrated on IP that receives a favorable audience response.

Market Growth Becomes Increasingly Visible

The market is also expanding rapidly. According to Sensor Tower, South Korea generates relatively high levels of consumer spending compared with its volume of short-drama app downloads, ranking fourth worldwide in monthly revenue behind the United States, Japan and the United Kingdom. The competitive landscape, previously dominated by foreign platforms, is also beginning to shift. DramaBox and Chinese short-drama platform NetShort ranked near the top of South Korea’s short-drama app market in both revenue and downloads during the first half of this year. Vigloo and Lezhin Snack, operated by South Korean webtoon content company Lezhin Entertainment, nevertheless increased their presence by placing among the top five in app revenue and downloads, respectively.

The perception of short dramas as “B-grade content,” which became widespread during the market’s formative stages, is also gradually fading as established stars enter an industry once dominated by unknown newcomers. Prominent examples include Lee Sang-yeob in “A Stormy Married Life”; Park Ha-sun and Lee Dong-gun in “A Love That’s Good for Nothing”; Park Han-byul in “The Cleaner’s Second Marriage”; and Kim Jung-eun in “A Beloved Mother Won’t Stand for It.” Leading directors from South Korea’s film industry are also entering the field. Director Lee Byeong-heon, acclaimed for both his commercial appeal and artistic merit through the film “Extreme Job” and the television series “Be Melodramatic,” entered the market in February with the short drama “My Baby’s Father Is My Guy Friend.” Director Lee Joon-ik, known for films including “The King and the Clown” and “Dongju: The Portrait of a Poet,” is scheduled to release the short drama “Father’s Home-Cooked Meal” in the second half of this year, with leading actors Jung Jin-young, Lee Jung-eun and Byun Yo-han confirmed to appear.