After experiencing its first growth peak in November 2022, the overseas short video sector reached its maximum growth in January 2023 and July 2023, showing overall positive growth trends despite fluctuations in growth rates.
According to Zhitong Finance APP, Huajin Securities released a research report stating that recently, the short video application UniReel launched by the Japanese subsidiary of col group co., ltd. officially went live, with the first original short video produced by a Japanese television station being broadcasted simultaneously on UniReel. According to data from the "2024 Short Video Overseas Industry Report," from August 2022 to June 2024, the in-app purchase revenue of over 100 short video applications reached a total of 0.252 billion dollars, showing an overall growth trend. After reaching its first growth peak in November 2022, overseas short videos saw their maximum increment in January 2023 and July 2023, with overall positive growth trends despite fluctuations in growth rates.
The main points from Futu Securities are as follows:
The overseas short video market has considerable potential, actively promoting in various regions.
According to data from the "2024 Short Video Overseas Industry Report," from August 2022 to June 2024, the in-app purchase revenue of over 100 short video applications reached a total of 0.252 billion dollars, showing an overall growth trend. After reaching its first growth peak in November 2022, overseas short videos reached their maximum increment in January 2023 and July 2023, with overall positive growth trends despite fluctuations in growth rates.
In regions where English is the primary language, in-app purchase revenue accounts for about seventy percent of the global market, exhibiting a significant lead, followed by Japanese and Indonesian, which represent five percent and three percent of the total in-app purchase revenue, respectively. Based on the number of basic users, the Japanese and Indonesian regions rank in the top three globally in terms of in-app purchase revenue with their limited user bases, indicating great market potential. Advertising spending and popular series both contribute positively to download numbers and content revenue.
According to SensorTower data, at the beginning of July, the traffic and spending of popular advertising materials based on "Fated to My Forbidden Alpha" surged rapidly on TikTok, coinciding with the first spike in downloads of "ReelShort," becoming a key point for "ReelShort" to penetrate the USA market.
The domestic market is developing steadily, with various platforms adjusting their revenue-sharing strategies to promote content development.
According to data from the "China Micro Short Drama Industry Development White Paper (2024)", the market size of micro short dramas in china will reach 50.44 billion yuan in 2024, with a year-on-year growth of 34.90%, while the total box office of movies in mainland china is expected to be 47 billion yuan for the whole year. It is expected that by 2027, the market size of micro short dramas in china will exceed 100 billion yuan. As of August 2024, 900 micro short dramas have been launched on various long and short video platforms, and the total number of dramas launched for the whole year is expected to reach 1350, which represents a year-on-year growth of 27.5%. The mini-program and app platforms have collectively launched 22,615 micro short dramas. The re-investment of old dramas is becoming a new trend, with an average of over 8,000 old dramas being invested in monthly from January to August 2024. The number of micro short dramas participating in financial flow is steadily increasing each month.
Various platforms continue to adjust their revenue-sharing strategies:
iQIYI, starting from November 11, will increase the basic revenue-sharing unit price for its series and horizontal short dramas, and will also incorporate the effective revenue-sharing duration of works into the pricing consideration standard.
Tencent will add member acquisition incentives in October based on the original revenue-sharing strategy, as well as introduce the "Excellent Works Incentive Plan" and the "Deep Cooperation Brand Incentive Plan."
Youku has set the unit price for S-level short dramas at 16 yuan and for A-level short dramas at 8 yuan starting from October 8, while also introducing new indicators to incentivize excellent works.
Douyin will allocate revenue between creators and the platform at a ratio of 7:3 for paid mode short dramas, skewing the revenue in favor of content creators. For short dramas promoted through the Star Map or content cooperation platform, creators will enjoy 99% of the revenue share, while the platform takes only 1%. The platform will compress its own short-term revenue space in exchange for the long-term development of high-quality content.
Investment recommendations: The micro short drama market in both china and internationally is steadily expanding, with various platforms actively laying out strategies to promote content diversity and build an ecosystem. Recommendations: col group co.,ltd. (300364.SZ), beijing jetsen technology (300182.SZ), haikan shares (301262.SZ), ireader technology (603533.SH), zhejiang huace film & tv (300133.SZ), inly media co., ltd (603598.SH), bluefocus intelligent communications group (300058.SZ), guangdong insight brand marketing group (300781.SZ), Kuaishou-W (01024), etc.
Risk warning: Market development is below expectations, audience preference is lower than expected, uncertainty regarding the macro economy and policies, etc.
