This episode of The Town is presented by 20th Century Studios, Avatar, Fire, and Ash. Don't miss the movie Critics Are Raving is epic and exciting and gorgeous and heartbreaking and stands as one of the greatest films ever made. It's got incredible visuals, jaw-dropping action, and a cinematic achievement. Avatar, Fire, and Ash now playing in theaters and now nominated for the Academy Awards for Best Visual Effects and Best Costume Design. It is Thursday, February 12th. Ever since the content recession started in 2023, Hollywood people have been looking for a path back to the peak TV boom times. What if the answer is in shows with episodes that last just 90 seconds? Microdramas. I feel like people in town won't shut up about microdramas. Though the business in this country is still pretty small, and surprisingly few seem to understand them. If you're not familiar, these are basically if social media clips were crossed with serial romance novels. Short bursts of content, often one to three minutes, designed for mobile viewing and to get you hooked, often for free, and then you pay to watch more via micropayments or subscription. The content is cheap and often low quality. A lot of ludicrous romances based on Chinese web novels, badly behaving billionaires, titles like forever was a lie or waking up married to my crush, that kind of stuff. But they're clearly catching on, mostly in China and other parts of Asia, but increasingly in this country where revenue from microdramas reached $819 million in 2024, according to one research firm, projected to rise to $3.8 billion by 2030. And globally, the microdrama market is projected to reach $26 billion by 2030. Tons of money flowing into the space and a bunch of companies have popped up to try to capitalize. One of those is DramaBox. It's a Singapore-based app. They've got a big production studio in LA and participated in a Disney accelerator program. They're trying to hook US viewers on soapy vertical dramas. And they did $55 million in revenue per month in 2025, 7 million in daily active users. It earns money through pay-per-view, subscriptions. It's even hoping to co-develop projects with Hollywood talent. So how is that possible when entire shows can cost less than $300,000? That's what I want to talk about with my guest, Shikone Zhu. She's the DramaBox LA-based head of studio. She's going to get into the microdrama market right now. What works in this genre of content, how they make money, all of it. Today, it's the microdrama boom, big money from small episodes. From The Ringer and Puck, I'm Matt Bellany, and this is The Town. All right, we are here with Shikon Zhu, who is the head of studio and one of the top LA-based executives at DramaBox. Welcome to the show. Thanks for having me, Matt. So I want to get into this. We've been wanting to do a microdrama show for a while because as much enthusiasm as there is out there in the business for this kind of nascent genre, there's a lot of skepticism as well. And some of that has been voiced on the show before. Lucas is not a big fan. But I have been curious about this because we're at this time where everything is coming together. Instagram Reels is coming to television and Netflix is starting to look more like YouTube. And micro dramas are sort of this middle ground. They're not quite social media video and they're vertical, but they're not quite TV quality, but there are some pretty effective TV-style storytelling devices. So why don't you give us an overview, just a general overview of where the microdrama market is right now? Who's watching it, how big it is, what you are doing at DramaBox? Just give us your pitch. Yeah, absolutely, Matt. So I guess to just kind of break down what vertical drama is briefly, It is a bite-sized mobile first content that are overall like 90 to 120 minutes long. And each episode is around a minute to three minutes long. So a whole show is broken down into around 50 to 90 episodes. And we normally release them all in one go so people can go and binge it. And it's normally operating on a freemium model, meaning that you can watch the free episodes and unlock the rest by paying. So where the market is right now, I think we're looking at a 12 billion to 14 billion global market by the end of 2026. And this format first started in China and the market has been surging. And also it's still 80% of the market is still in China. but I think the U.S. is the fastest growing market right now. And why is that? What is driving that? What are the demos on the U.S. micro drama market? I think in the beginning, because I joined this industry in early 2023 and by that time, it's mostly women over 45. So I think by that time, 70% of the demo were women over 45. And now it is starting to shift already we're seeing 46% of the audience who are 18 to 34, still women. But the highest spender right now are women aged 35 to 55, particularly in the US and the UK. And it's a lot of romance. There's a lot of fantasy romance, sort of heightened romance stuff, you know, my secret billionaire boyfriend, that kind of stuff. Exactly, yes. Is that the only kind of content that performs in the microdrama format? or are there others? I know you guys have talked about doing more, but is it primarily the kind of romance and click to see the next little iteration of the romance? Yeah, I think it first started with most of it being romance because this format was born from the web novel space. Like these Chinese web novels. Yes, serving the female readers, female audience with romance. But as the format grows, it is starting to shifting towards a lot more male-oriented content and also just family dramas in general with no romance involved. But overall, I would say the genre is still heavily revolving around anything drama because it just serves this dopamine cycle for shorter format for the smaller screens. So drama right now, I would say, would be the number one genre in this space right now. It's funny that we're talking about this because obviously Quibi was trying a version of this five years ago, six years ago, and they flamed out after six months in part because everything was just so expensive. And I don't think people were quite willing to go to a separate app to watch the kind of stuff that they could watch on YouTube. But you do have a separate app and you guys are getting people to go to this. Is it just that the model has changed and you can only do this kind of content on a hyper micro budget model? Is that the secret sauce here? A lot of things have changed since Quibi. For example, you know, during COVID, people really started to cultivate this habit of scrolling on their phone. And they start to consume content in a very different way compared to before I think that really helped people getting used to this mobile first format with the vertical dramas Also, yes, the shows are made really cheap. I think we're looking at around $2,000 per minute. $2,000 per minute. How is that possible? I think people in Hollywood are going to hear that and their jaws will drop because you can't get out of bed for less than a couple million dollars an episode for a typical Hollywood show. And these are being made at a price. I mean, obviously you are not using union labor. You are not using locations. You're filming a lot of these in the same place. But you oversee. How many do you oversee now? How many are going at a given time? Right now, I think we have around 16 shows in different various stages. Last year, my team produced over 80 shows. and launch them online. And how do you do them so cheap? I think, first of all, like you said, we do non-union. Second of all, because it is for a smaller format, it is for the phone screen. I think in the early days, in early 2023, we were outputting 540p resolutions. But now, you know, the platform's really optimized the streaming. So now we can do 1080p like before. But still, I think what matters shifts when you're doing a mobile first content. For example, you don't need a vast location anymore because the screen is so narrow. You focus more, you put more resource on costume, makeups and very attractive actors. So those all contribute to a smaller budget. Of course, we're still treating people nicely. We do 12 hour shoot days and all that, but it is definitely nowhere near as the union scale. Hot people can go a long way. Yes, exactly. so do you so do you have the typical audition process like who wants like what do you pay an actor for 12 hours of work uh in the beginning early 2023 you pay 400 dollars 500 for 12 hour shoot day for the main leads who nearly appears in every single scene so they're basically working for 7 to 10 days 12 hours a day non-stop um but now you know we're starting to have a quote-unquote a list in the space now who have several hit shows under their belt, who are... I think I'm seeing as high as $2,500 a day for lead talent, but I think most of them are still ranging from $1,000 a day. These are not SAG-AFTRA actors. And presumably if you want to make it in the industry, you want to ultimately be in the unions. Do these performers for your movies, your micro dramas, do they fear that they're not going to be able to get into the big guilds when they're doing this kind of work? Or have you found that the guilds recognize that this is sort of entry level stuff, and that someday these people can be in the traditional Hollywood guilds? That's a really good question. I think in the beginning, people are stepping into this industry because first of all, it was in the beginning of 2023. It was during the strike. And a lot of people are fresh faces trying to make it, but found no work in Hollywood. Yeah. Well, that's persisted. Yes. And they rather start working and, you know, paying their rent than, you know, sitting at home drinking coffee. So I think that's what propelled a lot of people to enter the industry, not only the talents, but also crews, any creative, key creatives to enter the space in that early stage and uh in 2024 last year and now it is starting to become a consistent sustainable work for a lot of people so i think that the guild is also catching up um i don't know if you've heard but last year uh sag uh basically put out a sag agreement for vertical dramas and i think um we're in that kind of twilight zone right now where we don't know where the format belongs But I do feel like it's not stopping people from being able to enter the guild if they want to. And eventually we will. You're getting the talent that you want. Yes. Yes, we are. What about writers? Sorry, I just want to add one more that we definitely want to work with union actors, of course. But right now we're not getting we're not tapping into that pool yet. Well, you're going to have to pay for them and the budgets will go up. It could throw off your entire model. All of a sudden you got Teamsters taking people in golf carts from one place to another. and charging you 30 bucks an hour. Yeah, that is a luxury for sure in this space. Writers, because it's a particular skill to be able to build to some kind of a cliffhanger every 90 seconds. And it's a unique way to watch this stuff and it's a unique way to write. So is there a community now of micro drama writers that are just very good at this stuff? Like where do you find your writing talent? Yeah, I think for writers, it might surprise people because in the early days, I started with this company called Real Shore in my early days. And I found that a lot of writers in that company are actually having a game background. So they either wrote for visual novels or interactive novels in the beginning. So they're not screenwriters. And for Vertical Drama, they transitioned from that space to film and TV, which is very interesting. And I think they're one of the earliest writers in the space who came from web novels and interactive novels. And now more and more actual screenwriters are also entering into the space. But definitely we're seeing a learning curve here because this format is just so mobile driven. It is so emotional driven. So it's not plot driven. So it is basically, I think it is different than a lot of the things that are taught in film schools right now. So this is in the long tradition of soap operas. This is basically a spliced up, emotionally driven soap opera, largely for women. They can watch late at night if they're lying in bed, you know, fantasizing. And this is like the next iteration of that. Yes. All right. So this is all about a scale business, right? It's not about the individual. So how long does it take to shoot a 120-minute microdrama show that's going to be split up into 50 segments? Are you doing one of these a week? Is this like the Hallmark holiday movie pipeline where it's just bang them out in two weeks? What is it? Oh, it is very similar to the Hallmark pipeline. Actually, we see a lot of talent and crews that came from that space. That's not a surprise. work really well in this space right now. Yes. So yeah. So I can maybe just take you from the top, like from script ideation to ready for production. That normally is a month and a month and a half process. And once the production team get the script, they normally have a three to four weeks prep. That's a good amount of prep in this space. And then they shoot the, you know, a hundred pages script in the time span of seven to 10 days. And after that post would take around a month or a month and half. So in total, you're looking at around four months from script ideation to screen. So that's the turnaround for these kind of projects. That about what I would expect Someone screams in a meeting he a billionaire but he also has a secret but he also has a secret child And then the child comes back and then boom you off Right, right. Yeah. Very, very, very accurate. I'm auditioning right now. I could do this on the side. This is screaming for AI, is it not? How is AI going to impact the production of these micro dramas? First of all, AI has always been that kind of sword hanging over our head in the past two years. Because it could completely disrupt you, but it also could be a big tool. And there's no rules. There's no guild rules preventing you from putting some prompts into ChatGPT and saying, make it like my best friend billionaire, but have it be set in the Bahamas. And all of a sudden, chat gbd spits out a script right i think that is sort of what a lot of the platforms are dreaming of because you know way easier for them to produce more scripts um but still like i'm not seeing that being used uh in this way yet because i think ai is just still not able to write in the way that human rights right now uh even though yes we do a lot of kind of reboots quote-unquote and reskins or reiterations of the same storyline, but you can still clearly see that you need the human creatives to take part in this, to have some heart into the process. And to be honest, I think in the early days, some of the platforms actually tried the way you said, and it did not output anything that's even legible for any production to use, for any platform to seriously consider using them. But on the other hand, AI has been very, very helpful for post-production, for the post-production workflow. It's helping with optimizing the quality of a lot of VFX. And that's been actually in practice right now as we speak. But, you know, like we know how cautious we want to be around this area. You don't want to feed any actor's image into the AI and regenerate anything like that. You don't do that. You don't combine your five hottest actors into one AI-created super hot actor? Definitely not. Because we know if we do that or any of the platforms do that, that will create a lot of ethical issues, basically. And that's not something we want to step into. But, you know, if we're making a werewolf show and we need a really good-looking werewolf, we can generate that through the AI. And that's fine. That's really funny. why should traditional Hollywood filmmakers explore this format? I think you must know that Fox Entertainment recently took an equity stake in Hollywood, which is the company behind my drama. And they're committed to producing 200 vertical series. Don't you guys have a small investment from Disney? I mean, you were part of the accelerator program at Disney. So what does that entail? Are they involved in helping you? Are you saying you want to work with more Hollywood talent? And is Disney helping you there? Well, I think we're definitely trying to find a middle ground or it's a mutually learning process. We're kind of feeding into that curiosity from the whole industry about this genre, about the business model. Because I think even before last year, vertical drama is still very, very niche. And I think last year, at some point, we hit the tipping point where the mainstream media starts to take note of what's happening right now in this space. and a lot of them are curious a lot of them want to know more about how the business operates how are we able to make the show so cheap and also make money how does marketing works um and that's sort of an ongoing process where we're exchanging a lot of information with our partners um but yeah like back to your question why should hollywood care or why should hollywood people join in on this style or this new format i guess um i think it is the future of storytelling but it's not going to completely replace traditional legacy media um so for anyone who's interested to just explore a new outlet of telling stories um they can try they can drive i think it's really fun because i also come from a film background i went to film school at usc i worked at in development from at ternan entertainment and three body universe and before that i just never heard of a thing of vertical drama um so once i joined i discovered this is completely a different business and this is high frequency narrative uh and compared to legacy media where you develop a story and you make it in you know five to six years we make several shows in four months and on day three of the release, we're able to learn whether it's a hit or it's a flop. So it is a very fast cycle and it is high frequency. That could be appealing to Hollywood people who are often so frustrated by how long things take. And you can work on a project for 10 years. And finally, it either comes to a decision on you, whether you make it or you're not like here, you get some, at least, you know, the ambition is obviously much lower than your typical Hollywood production, but you guys are upfront about that. And it's not like you're pretending that you're making art here. You are making emotional driven videos that will appeal to the audience and the data will tell you where to go. I've read interviews with you where you said that the biggest challenge is customer acquisition costs. So is that basically just finding the audience on social media and targeting them via algorithms? Say, oh, if you are liking a series of TikTok videos about this creator, you might like our scripted version of something similar. Yes and no. I think, like you said, definitely audience acquisitions is one of the biggest thing in this business model. For example, when I talk about marketing, that's what I'm talking about. We're buying traffic on social media platforms to drive traffic to our app so people can discover the shows that they might enjoy. And that is an entirely different thing from how legacy media operates. when they talk about marketing, they're talking about marketing campaign. They have a plan to roll out a certain show. But for us, yes. Yeah, well, they do a lot of social marketing too. It's a hybrid now, but you're not doing traditional advertising. No, we're doing traffic buying where we're basically breaking down some of the shows into marketable moments, marketable clips. Maybe some people call it a trailer, but it is not exactly that. Too hot people making out. Right. The most emotionally punchy moments in the show. Emotionally punchy. I love that. That's the term of art for making out. Right. And, you know, we try to use those kind of clips to attract people on social media and to, you know, convert the traffic into our platforms. And that is definitely how we're operating right now to acquire the users. And that's also how TikTok, I think, in the early days acquired their users. Well, you know, companies like Netflix are just watching TikTok doing that and be like, why are you doing that? But then that works. That's just an entirely different way of acquiring users. Why don't you just hire a bunch of influencers to be your stars? I mean they would gladly take the opportunity to star in a quote unquote movie or show and then you could promote it to all of their followers Yeah I think that is definitely something that a lot of the platforms are trying to do right now Get Clavicular, the looks maxing guy. He'll get frame-mogged in a vertical video. All right, I'm writing that down and it's going on to my pitch tomorrow. Craig can translate it for you. Craig's my Clavicular translator. He'll tell me all about it. But the ultimate question with this business model, as with every digital media business model, is how do you prevent YouTube from putting you out of business? Why is your model something that YouTube cannot subsume and do on its own? Because that was a lot of the criticism of Quibi is that everyone was like, well, okay, you're spending all this money on these original exclusive videos on your platform, but everyone's just going to go to YouTube. Just put it there. Are you producing for YouTube? And if not, why? And how do you prevent them from eating your lunch? I think that's a really good question. I might not have the best answers for it, but actually right now, all the platforms, all the vertical drama platforms have a YouTube channel and they do monetize through YouTube. And they also have, yes, TikTok as well. And I know TikTok is moving into this space as we speak. They're going to explore a free model for vertical drama viewing. So that's also going to create a lot of new energy in the space. And we'll see how it goes. Okay. Craig, do you have anything here? I know you sort of cringe at a lot of this stuff, but it seems to be working. What is the perception around town of micro dramas when you're in meetings and you're talking to people? Is the feedback often negative? Is it questioning? Kind of what is the general vibe when you take these meetings and talk to people? I think the most of the sentiment we encounter would be curiosity in general. People are genuinely curious, what is this format? And how is it different from traditional media? And why does it work? So they're all very open to hear us. And I am seeing a lot of anxious people from LexiMedia who are kind of just nervous about whether this format is going to take over and how can they learn fast. You can make a movie for $300,000. Please leave right now. That's what the producers would say. The studio is probably saying, you can make a movie for $300,000. Like you're going to, we're going to put you in charge of everything. Yeah. If they're not a union signatory. Right. I know the way this plays out with the guilds will be very interesting. All right. I appreciate you coming on the show. Thank you very much. Thank you so much, Matt and Craig. We are back with the call sheet. Craig, we missed you at the premiere of GOAT last weekend. You were not able to attend. I went with my nine-year-old son. He ended up meeting Steph Curry, got the coveted autograph. You were very jealous. Very jealous. Happy for your son. I hope he recognized that he was in the presence of greatness. Exactly. There were actual goats on the red carpet. You also missed that. Big weekend at the box office. Goat is actually not the biggest title. It's Wuthering Heights. is going to do probably over $50 million, I think. The tracking for NRG is at like $45, $47 right now. Even Warners is admitting it's probably going to do $50. So let's set the line at $50. And what are you saying about Weathering Heights? Budget about $80. I would take the over. There's a lot of negative online criticism of this movie, which I would argue means that it's actually pierced the zeitgeist and people care about it. Emerald Fennell is interesting because I feel like her movies are at least salt burn. And now this one seemed to be critically, you know, that people are critically skeptical, but they're commercially successful. And well, not salt burn. Salt burn didn't do much in theaters. It only did like burn crushed on Amazon. It did. And that's why I think Amazon just flubbed the release. They didn't know what they had. They took it to festivals and positioned it as an awards movie when it's like, no, no, no, no, no, no. This is elevated trash. They should have done a big marketing campaign and tried to open it like a normal movie. And I think Warner's learned from that. And they're going for the weekend couples and girls night crowd. Yeah. Look, she knows how to make steamy, salacious, provocative movies that people want to go see. Well, she has two very hot leads. So that helps. And Margot's a producer on it. This was an interesting one where they packaged it up with MRC and sold it as a package to the highest bidder. and Netflix came in with a bid that was higher than what they ultimately took from Warner Brothers, but they wanted this big theatrical release. And I think they're going to get it. I think they're going to get over 50 million. So I'm going to take the over on Weathering Heights. So let's move on to GOAT, which NRG has GOAT at 30 million. And these are for the four day, by the way, the holiday Monday. This is not a three day opening. This is a four day. Sony is saying GOAT is going to get to like 2025. NRG has it at 30. Sony tends to low ball. So let's put the line at like 27. Where are you on Goat? I saw it. So it's a quality standard kids movie, rags to riches, underdog sports story. The animation's kind of cool. It's not breaking any ground, you know, thematically. But my kid loved it. He told all his friends. So I'm going to also take the over on 27 for Goat. I'm going to have to defer to you on that because Goat is unique in that, I mean, there are not many original, non-IP-based animated movies that are successful. Yes. So this one feels much more risky. And so I defer to you. Why do you feel like this one will work? Well, first of all, the budget on these Sony movies is a lot lower than like a Disney original animated movie. It's in, they're saying in the 80 to 90 million. So even if it gets up to 100, that's still less than what you would see. I also think they're getting a lot of promotion. I think this is a basketball oriented movie. It's got a lot of black stars in it. They're promoting it around the NBA All-Star game and on NBA. so I think that it's going to bring in a big demo shift from typical animated animated movies and get a huge black audience and couple that with the general kids and family audience and I think it'll do fine you know it was not going to break the bank but it'll be a solid little hit you know one thing that we haven't talked about a lot is how few sports movies come out these days there used to be a good sports movie every year or two and now they are few and far between I know you should lobby them when you're running Hollywood one every quarter yeah comedies and sports movies What we're not talking about is the third big movie this weekend, Crime 101. Got a bomb alert on that one. Chris Hemsworth. That movie cost like $90 million, they were saying. I think it's probably a little more. I know this was also a competitive bidding environment. Netflix wanted this one and Amazon got it. It's got Chris Hemsworth, Mark Ruffalo, Barry Keegan. This movie is tracking for like $16 million. And I would actually take the under on that. I just don't think it's going to work. Doesn't feel special enough. And the stars, like Chris Hemsworth is a streaming guy now outside of Avengers. Another potential problem for Amazon. They just had Mercy with Chris Pratt. They had the Melania movie. Now they've got Crime 101. Like we're only into the second week of February. That's three underperformers already this year, potentially. Yeah, a crime movie, though, with Mark Ruffalo and Chris Hemsworth, that's going to be on Amazon Prime. I mean, that's like how to get a dad 101 to watch your movie. Oh, yeah, it'll be fine on the service. And it'll probably be a rewatchable in like 2030. but I don't know how well the reviews are fine. Not great, but we'll see. All right. That's the show for today. I want to thank my guests. She called you Bruce Craig Horlbeck, our news, Jesse Lopez and John Jones. And I want to thank you. We'll see you next week.
