Recently, Douyin upgraded its premium short drama support plan. Based on the previous "Chenxing Plan," it continues to strengthen the two cooperation models of investment production and joint operation, while also introducing several operational support measures such as guaranteed returns.

Xinda Securities released a research report stating that according to iResearch Consulting, the market size of the micro-short drama industry in 2023 is estimated to be 35.86 billion yuan, an increase of 234.5% compared to 2023.

Under the influence of tightening policies and platform regulations, increasing user demand for content quality, and internal adjustments due to market competition, the overall industry scale continues to show a sustained growth trend driven by market demand. With multiple positive factors combining, the trend towards high-quality micro-short drama content is becoming increasingly prominent, which is also a key element driving the high-quality development of the industry.

According to Zhitong Finance APP, recently, col group co.,ltd.'s Japanese subsidiary COLJAPAN launched the short drama application UniReel, which has officially gone live, and the first original short drama produced by a Japanese television station is being aired simultaneously on UniReel. According to data from the '2024 Short Drama Industry Report', from August 2022 to June 2024, the total in-app purchase revenue of more than 100 short drama applications reached 0.252 billion US dollars, showing an overall growth trend.

After reaching its first growth peak in November 2022, the short dramas set for overseas markets saw their maximum increase in January 2023 and July 2023. Although there have been fluctuations in growth speed afterwards, the overall trend remains positive.

gf sec released a research report stating that the short drama industry is expected to further improve in quality, with an increase in the supply of high-quality content and the wave of short dramas going overseas driving the growth of the industry scale.

As the commercialization of domestic short drama apps accelerates, it is expected that more content producers will be able to achieve revenue growth from sharing within the Hongguo ecosystem; furthermore, with the increase and commercialization acceleration of TikTok, short drama platforms that rely heavily on advertisements are also likely to benefit from changes in the overseas traffic landscape.

Additionally, the generative capacity of short dramas empowered by AI is expected to be optimized, leading to reduced production costs and improved efficiency, with the accuracy of advertising flow likely to increase.

Hong Kong stock companies related to the short drama concept:

Inkeverse (03700): The short drama business is progressing steadily, yet profit margins are limited. As a derivative of web novels, the short drama business has seen rapid market development since late April 2022. With the release of several popular short dramas, the number of users has continued to rise. Since 2024, the short drama sector has entered an intensely competitive phase, attracting more and more large companies and platforms to join, with market entry barriers rising and industry profit margins further compressed. The company is exploring the next stage of development for short dramas, attempting deep integration with cultural tourism and other sectors, creating high-quality premium short dramas, and trying out new overseas short drama opportunities, while focusing on validating commercialization pathways.

Ningmeng Media (09857): According to Yunhe Data, among the top 20 series by effective viewing market share from 2016 to 2023, the company has 1-2 series listed each year; nearly 50% of long dramas are rated above 7 on Douban, making it a rare stable producer of top content in China. Focusing on short dramas to create a second growth curve. The reinvestment in micro-short dramas, the thin profit margins of production companies, and the regularization of regulation all point to quality being a major trend; the company is utilizing its strengths in long dramas and the cooperation base with platforms and brand owners to layout premium short dramas for both B2B and B2C, covering both domestic and overseas markets, making profitability more assured compared to short dramas that rely solely on advertisement flow. In 2023, the company launched hits like 'Twenty-Nine', with short drama revenue increasing 12.4 times the same year; in 2024, focusing on micro-short dramas, considering their short production cycles and low costs, we expect revenue to grow significantly that year, but improvements in advertisement effectiveness and profit release will require some time, and the development of short dramas may affect profit levels, with the expectation of gradual profit realization thereafter.

Huanxi Media (01003): Since 2016, the company has introduced several directors, including Peter Chan, Wong Kar-wai, Gu Changwei, Zhang Yimou, and Zhang Yibai as shareholders and partners through private placements of equity. Mimicking the model of DreamWorks in the USA, Huanxi Media has created an innovative equity structure that closely ties the interests of shareholder directors with the company's long-term objectives. In 2018, Huanxi Media received an investment of 0.953 billion HKD from Maoyan Entertainment, acquiring 15% of its shares; Maoyan Entertainment would gain investment rights in Huanxi Media's film and television projects, along with exclusive publicity rights, and provide service access for 'Huanxi Premier' on its website and app, using its traffic resources to promote Huanxi Media's online video streaming platform business. In 2020, the company reached a partnership with ByteDance, establishing an independent channel on platforms like Toutiao and Xigua Video for directing flow to the 'Huanxi Premier' platform. That same year, Huanxi Media received an investment of 0.513 billion HKD from bilibili, acquiring 9.9% of its shares, with bilibili establishing a dedicated section for 'Huanxi Premier' on its platform.