By Dawn Chmielewski, Rollo Ross, Harshita Mary Varghese and Lisa Richwine
LOS ANGELES, Aug 18 (Reuters) - When Craig Williams opened his production facility in downtown Los Angeles two years ago, he thought he would rent out the converted furniture warehouse for the occasional music video to sustain his fledgling film business.
Williams was blindsided by a phenomenon that quickly overtook his production space: microdramas, vertically shot serials delivered in two-minute episodes, played on phones.
“It started getting booked — and continued to get booked — with microdramas,” said Williams, 65, a former music producer for Death Row Records. “After a year, I was booked all the time. I said, 'I've got to build another one.’”
Williams now operates three production facilities, rebranded as Vertical World Studios, catering to the soapy, fast-paced world of vertical shorts. They’re filled with standing sets – hospital room, police station, courtroom, nightclub – he bought at liquidation prices from major Hollywood studios like Sony Pictures and Paramount.
It's not a surprise. Hollywood is shrinking. Pending mergers threaten to further reduce production of films and shows. Actors fear AI extinction. Streaming companies are losing ground to YouTube.
Microdramas may be the only thing that’s growing in Hollywood.
The format is expected to generate $1.5 billion in revenue in the U.S. this year and jump to nearly $2 billion next year, according to research firm Omdia. While traditional TV business in the U.S. is massive, at about $125 billion, it’s projected to shrink by as much as $15 billion annually in the coming years because of continued cord-cutting, according to PriceWaterhouseCoopers.
It’s also a sign of China’s rising soft power. The format originated there, and its rapid ascent has given Chinese-backed apps, such as ReelShort and GoodShort, a Hollywood foothold.
Vertical videos altogether, which includes TikTok, have surged, projected to reach $150 billion in global revenue this year, excluding China, researcher Owl & Co. said.
It’s creating work for actors, writers, directors and craftspeople, and attracting investment from studios, media companies and technology platforms.
“It has completely changed my circumstances financially,” said actor Robert Palmer Watkins who found regular work again after the production drought that followed the pandemic and the Hollywood strikes. “I am so grateful.”
Still, there are some signs of life in old Hollywood. Spending on U.S. film productions rose 4% in the most recent quarter, thanks in part to tax incentives, according to research firm ProdPro. But globally it is still down.
‘DOWN THE RABBIT HOLE’
Microdramas are succeeding because they apply a centuries-old formula — the cliffhanger — to the ubiquitous smart phone that Emarketer estimates accounts for 99 minutes of video viewing each day for the average American. Episodes range from 45 seconds to two minutes long, leaving little time for lengthy plot set-ups.
"You're dropped right into the middle of the story, so it grabs your attention right away," said Lily Darragh Harty, director of production at Inkitt CandyJar, a platform for romance microdramas.
Some 66 million monthly active users watched microdramas last year in the U.S., more than double the 26 million in 2024, according to research firm Omdia. Women aged 25 to 55 make up the core user base.
The little-known studios behind the phenomenon are raking in dollars. CandyJar, a two year-old platform that releases a new romance about once a week, is on track to generate more than $100 million in annual sales. The company declined to disclose profit. According to its executives, each microdrama series typically spans 50 to 75 episodes, and takes about three months to produce at a cost of between $100,000 to $300,000. A typical half-hour sitcom costs between $2 million and $4 million per episode.
CandyJar’s "romance-forward" platform attracts a 99.9% female audience, said Elana Zeltser, director of creative development for Inkitt CandyJar. Titles include “The Bad Boy Wants Me,” “Mafia Temptation,” and “My Sexy Devil,” a melodramatic high school romance in which one-time enemies — a dance team captain and football quarterback — fall in love.
The themes are uncomplicated and the dramatic beats hit you over the head. The term microdramas is apt: they’re sitcoms and romcoms stripped down to the basics, a sketch of a show rather than a fully fledged drama.
Other platforms are more diverse. Males account for 30% of the users on MyDrama, according to a new poll by Owl & Co. The biggest growth is among viewers ages 22-27, who are attracted by a widening variety of microseries genres, including sci-fi/fantasy and horror, Owl found.
Microdramas typically offer the first few episodes for free before charging through weekly subscriptions at around $8 to $20 to access each service.
Meagan Johnson, an influencer from Chicago, discovered microdramas on Facebook and now spends hours glued to them. She has spent as much as $200 a month.
“I fell into the social-media advertising trap that vertical dramas rely on to find new users,” she said. “That just kind of catapulted me down the rabbit hole of watching them.”
TikTok’s broad reach has made it a haven for microdramas where viewers can discover new series without encountering the barrier of a paywall. Actress, writer and producer Issa Rae launched her first microdrama, the thriller “Screen Time,” on TikTok, where it attracted 500 million views in a month.
“For her, it’s important to reach as large an audience as possible, so that she can see if this format is sticky — and she can get the direct audience feedback,” said Dawn Yang, TikTok’s global head of entertainment partnerships.
Maria Rua Aguete, head of media and entertainment at Omdia, said TikTok, Instagram Reels, Facebook and YouTube Shorts act as "the new trailers," driving users into apps.
ReelShort, one of the largest producers, recently saw its daily mobile viewing time jump 40% in the second quarter to about 38 minutes, more than mobile viewing for Netflix, Amazon Prime Video or Disney+, according to Omdia analysis of Sensor Tower data.
HOLLYWOOD IS PLAYING CATCH UP
The major entertainment companies are incorporating vertical video in their streaming apps.
Comcast's NBCUniversal introduced verticals on its Peacock app in early 2025, and this summer launched a pair of unscripted microdramas, “Salon Confessionals With Madison LeCroy,” and “Campus Confidential: Miami,” that feature Bravo characters familiar to their audiences.
“We know that the audience likes consuming these ‘must see’ short form clips and vertical video, so it felt like the right environment to experiment,” said Frances Berwick, chairman of Bravo and Peacock unscripted content.
Fox , meanwhile, struck a deal with Holywater, the Ukrainian company behind the MyDrama vertical video app, to produce more than 200 vertical video titles in exchange for an equity stake in the company. Veteran media executives have gotten into the act, including former Miramax CEO Bill Block, who launched a vertical drama app called GammaTime, and former ABC Entertainment Chairman Lloyd Braun, who is backing a studio and platform called aTwist.
ATwist co-founders Jana Winograde, the former president of Showtime, and Susan Rovner, a veteran of NBCUniversal and Warner Bros. Television, said they’re using everything they learned about how to quickly hook a television audience. They plan to deliver 20 to 30 microseries, spanning various genres, including romance, thrillers and unscripted content, in the coming months.
“We're not looking to win Emmys, we're looking to win the People's Choice Awards,” said Rovner.
‘MAKE THIS CHARACTER SMILE’
As the broader Hollywood community contends with the benefits and perils of AI, microdramas have embraced the technology.
To attract a male audience, CandyJar’s sister platform Ironblood has started churning out action-focused microdramas made even more quickly and cheaply — using generative artificial intelligence. AI productions can be completed in three to four weeks for $60,000 or less.
Ironblood’s AI shows are written by humans, and real-life actors are brought in to train generative AI to better portray human expressions. A human director uses prompts to direct the story.
“I can make any change in two minutes,” said Inkitt Ironblood producer and editor Elizabeth Knebel, who incorporates revisions requested by directors.
“If they want the character to smile, I can go into the prompt, say ‘make this character smile,’ and it's done immediately,” she said.
San Francisco-based Inkitt has about 135 employees and has hired 35 of them in recent weeks, said CEO Ali Albazaz. The company is adding one or two new video producers each week to ramp up productions for what Albazaz sees as “the renaissance of Hollywood.”
The new format has come with new rules and standards. SAG-AFTRA, the union that represents actors, stunt performers and others, created a new media contract that sets minimum pay rates, mandated rest periods and safety rules.
Not long ago, Hollywood hopefuls followed a well-worn path to discovery. A commercial gig followed by work as an extra, then getting an agent before booking that sitcom, and then, for the lucky few, a successful career. But that arc has changed, according to Hernan Lopez, the head of Owl, who was previously president and CEO of Fox International.
“Today, you hear anecdotally of many people coming to L.A. and getting their first job through a vertical drama.”
(Reporting by Dawn Chmielewski, Rollo Ross, Harshita Varghese, Lisa Richwine, Deborah Sophia, Nathan Frandino, and Eric Cox; Editing by Edmund Lee and Claudia Parsons)
