Can Bollywood's Big Boys Play The Microdrama Game?

The big guns have arrived. Yashraj films, red chillies and several others, India's most powerful entertainment names are now taking a claim in micro dramas. Also, the segment is increasingly becoming a test-bed for bigger IPs. I think full-OTT series and even films. But this playbook is different. This isn't a format that rewards prestige or star power alone. In fact, it rewards volume, speed and an almost algorithmic understanding of what keeps a thumb from swiping. Think not big-scale films, but reels and shots at scale. Also, the question of how to actually make money remains wide open. You see, the ad-driven model in China, micro dramas biggest pioneer in success story does not really map onto India's fragmented market. So today, we dig into the three fault lines defining micro dramas next chapter. IP strategy, studio ambition and the revenue puzzle. It's Friday the 15th of May, I'm Anirban Chaudhary, this is the Morning Brief. First up, my colleague in ETs in-house film journalist and critic Rajesh Naido. Hi, Rajesh, very warm welcome to the Morning Brief. Thanks, Anirban. Why don't you give me an overall sense of the micro drama market, current size, its CAGR and also the kind of investments that it is attracting? At present, according to various estimates, the size of micro drama industry in India is worth $300 million in 2025. This industry is likely to grow at a CAGR of roughly 50 to 60 percent in the next four years. And it may attain a size of close to $5 billion by 2030. At present, there are 250 million active users. An important thing one has to bear in mind is the use of AI in this industry. That is changing the whole business dynamics. Even in China, if you see a study showed that in January 2026, among the top 100 micro drama, close to 38 percent were AI generated. And the same share in 2025 was 7 percent. So that is self shows how AI is boosting this industry's prospects and how people are also accepting AI's role in creating micro drama. There is another trend that is emerging in India where films will be cut as vertical drama or micro drama, given the thin attention span. So this is what the India's micro drama landscape largely looks like. Now one interesting story that you recently did was how micro dramas are becoming the test beds for IPs. Tell me about that. There are two aspects which have led to this trend where one is seeing micro drama emerging as a breeding ground for testing IPs. One is the cost and second is the time. So these two variables are propelling and pushing this trend to a great extent, not only in India but also in China. So today one if one has to make in a micro drama of 50 episodes, the average cost will be in the range of 10 to 15 lakh and the time required to create that micro drama will be less than 10 days. In fact some micro dramas are made in three days. Today as you know the time and the cost required to build a film, mount a film is increasing day by day. The talent cost takes almost 55 to 60% of the cost of the filmmaking and then comes the whole process of mounting the film. These things take at least six to eight months. But when it comes to micro drama there is a certain amount of certainty in terms of seeing and testing whether an IP can work on a feature film length basis. Just to add it is not a cake walk or anybody can do it. Long established players in the entertainment industry they have a nejover others because they bring in their core competencies in terms of creating content in terms of technology. That is the reason when you see players like Yashraj or even Retchili's when they announce that they are entering this space, the whole industry and especially startups they realize now the industry is getting heated up. The business fundamentals are changing for the better and also OTT players which are also functioning like studios like Amazon or Geo they also have their own micro drama apps. So one can easily foresee that now mainstream talent will be drawn to this industry because when big players enter matters you know the deterrent serious business makes more sense. Do we actually have examples of successful micro dramas being fleshed or planned to be fleshed into longer series or vice versa where a successful series has been thought to be re-released in a micro drama format? In India we are at a nascent stage. In China I mean these things are happening at a very regular basis. This is because they have realized the potential of how to use micro drama as a very interesting tool to market films. For example in China the Niger franchisee before releasing the films the producers they come out with micro drama series around the Niger characters. In India very prominent example is the feature film called Indian Institute of Zombies. This film is produced by Kukut TV. It's a horror comedy. Before this feature film they had an audio series on the same story with the same name Indian Institute of Zombies. Also if you see in the West companies like Fox they have been testing IPs to a great estimate. For example Fox has a stake in technology company called Holy Water. Holy Water has 4 micro drama apps. Using the AI supported app and when it gets favorable response on that app the same IP is tested on another micro drama app which is based on subscription. When it gets favorable response on the subscription base app, Fox then mounts it and scales it up into films. That's how I think a similar trend would transpire in India. So the Fox Holy Water model is instructive. Test an IP on a free AI enabled app, validated on subscription then scaled to film. But Sanit Dinaran our next guest, the founder of AI native micro drama platform Dashverse has a contrarian view. He thinks this framing fundamentally misreads what micro drama is and who it's for. So here's how he answers Rajesh's first question. What does he think of the big boys of Bollywood entering the micro drama space? Oh I feel that is great. It's finally the entire content industry acknowledging the format and getting into this. We have seen this wave happening with OTT as well when Netflix came for the first time globally and then geographically a lot of platforms came not just in India and today most of the production houses make series. So it signals that micro drama is no longer the experimental format. It's like the main she meant it in mint. In a sense we will see a lot of good star access and the IP libraries coming into this play but the entire play I mean where I'm not sure is where in the entire value chain these studios get positioned into do they try to launch their own distribution to they try to find a partner. Do they come with some understanding of how the content should actually be written because this is not film. This is not a long form OTT series. This is like a bite size one to two minute episodes. So how do you adapt to the format as well. We have to see this experiment has been tried by few studios in the Hollywood as well even in China but nothing great has come out of this experiment yet and the reason is people who are making micro drama and distributed micro drama is a new creator class and the existing creator economy or the studio economy doesn't really is able to capture the value. So I'm excited I'm a bit skeptical. Let's see how it goes. It's great that you mentioned about testing IPs. I mean in the west Fox because of its stake in holy water it is so many IPs on its four micro drama platforms. Do you see the same pattern developing or unfolding in India. I don't think micro drama is a way to test IP for movies or series later on. drama in itself is a format. that people consume for a very different kind of a use case. Not an appointment viewing, which is generally what OTT or the film is where you decide and give your time, commit to it and have a viewing experience. So if something works in MicroDrama will also work for a movie, I don't think so. It holds there. So it's not an IP play. It's more of a volume pay and you have to make a lot of volume. It has closer to Instagram, Reels or YouTube shots. Like people want volume, people want to keep on consuming, people don't want to put too much brains into it while consuming. So that's my view on it on the IP side. Sanit, what does competition look like in this segment? I mean, dashed reels for instance hit 10 million downloads in months, but your rivals like Kuku and Reelsaga, they are closing in fairly fast. Also, industry watches say that the competition is because of limited supply and once the supply problem is cracked and there is more content and more players, the competition will automatically ease. How do you see the whole landscape right now and in the near future? See, today it is a very fragmented market in short drama. In fact, not just in India, even if you look globally, there are hundreds or thousands of app doing short drama and everybody kind of is limited by the kind of library they have. Now, today most of the apps will be playing the download game, but the problem is that those users come and leave because they don't find the next content that they can watch. So the real competition will happen when people will start solving supply as you said, you know, somebody can generate those volumes. You know, there are apps including us sitting as at 5 to 10 million monthly active users, which is huge. But if you see the library, you're roughly producing 50 hundred dramas and uploading and everybody will not find kind of liking of the limited content that you have. So you have to think of a product like Instagram or a YouTube where there is such a long tail of content and eventually everybody finds the content which they would like to consume and they get that promise is met. So whatever you see today as a competition and I see as a competition is immaterial. The consolidation will happen only if there is a player who solves the supply and the one who solves it is going to automatically win on distribution because distribution is not just one by downloads, it is one by redemption, it is like continuous engagement with the audiences with the consumer who has downloaded your app, who keeps your app and doesn't just leave it away. I would want to understand, you know, when we talk about big players like YRF and Red Chillies, what exactly according to you, you know, the goals or, you know, strategies they have in mind before entering this space? I can predict an outcome, right? If big studios come, the category expands and expands meaningfully because they don't come alone as a brand, they also always kind of bring in the stop-hour into it. But the business, how the business is built is a completely different thing, right? Because even if economies are in a favor, let us say you spend one-grow rupees, a YRF spends a crore rupees just to deliver a short drama, it says 100 crore that it takes to deliver a movie. The problem is the unit comics work, but the entire business PLN has to work if you only make thousands of crores of revenue, like at that scale, whatever is the economics of these big studios, right? And for that, they have to turn out a lot of content, a lot and a lot of content. Are they structured to do it? Are they thinking this direction? I don't know, but they should be if they are entering the category. It has never worked in Jaina. The supply is primarily driven by micro studios, like very small teams who keep on making and a lot of small teams who keep on making it and feeding the consumer demand. Do you think there'll be a consolidation in this space with these players, with these big players entering? See, we have to think from consumer first, not how the business thinks about it, right? And what does the consumer need? Does consumer need 20 different apps on the phone, where every time he has to find one new app to watch the next microdrama or really want one destination where everybody comes and find something to their own liking, right? Distribution will fragment more before it will get consolidated, right? Because even if you produce the good drama, you cannot have so many apps and you cannot like always keep on searching. What is the next thing towards? And Sunita, would you be open to a stake sale, to a big player or say investment from a big player? I mean, that's a difficult to predict, but you know, we are structurally solving the problem in a different way. Our company, I mean the founders and everybody is aligned on one single fact that the winner could be someone who can bring in a lot of massive supply, right? And that is when you can have edge on the distribution, right? So, I mean, we are actually structured like a tech company who's trying to solve, you know, using AI models that how can you truly democratize microdrama creation, right? Can you bring the cost down? Because as long as even India is structurally cheap, right? But as long as the cost is 10, 15, 20 lakhs, you cannot assume that democratization will happen. It can only happen if it collapse time and collapse cost. Would you give us an idea of the costs? Like what are the overheads, margins, etc? So, honestly, in our history, till, you know, we started doing microdramas, we have not produced a single live action microdrama. Like we have never shot any microdrama. We have only tried to grade AI microdramas. And those costs were really high because we were more in an R&D phase. If I tell you the trajectory, we released first microdrama in August last year, right? That was not just, you know, first in India, it was probably first globally. And the cost we incurred was around 100 K USD. In the month of March, we created around 20 microdramas with AI. And the cost fell to almost 15,000 dollars. In month of May, our costs are somewhere hovering around 5,000 to 6,000 dollars. That means that in 3 and a half to 4 lakh rupees, we can make a microdrama. So every quarter, we are collapsing it, making it half. By the end of this quarter, we will reach somewhere of a sweet spot, where we would try to bring it under a lakh rupees, under a thousand dollars. So in the next five years, is it fair to say that you're trying to create like a microdrama platform or an aggregator or a marketplace without owning IPs? I mean, you've signed a deal with Halikwin, which brings you microdramas built on other people's IPs. So, you know, what form or shape would you take in the next five years? So today, we have two propositions and how we are working in India, we are trying to own the full stack right from supply to distribution. But globally, we are not actually capitalized so well that we can also lead globally and solve both problems. So globally, what we are doing is we are partnering with all these top content companies who want to get into this category. It also includes the e-commerce, I mean, a lot of announcement will come forward. And these, all these people want to get into a microdrama, but nobody structure to produce it, because you know, tech is still in a nascent stage. So we work with Halikwin, we are working on the US distribution. You know, we did a pilot and it was like very successful and they have signed a framework contracts and we are more coming in even with the very top production houses in the US. So we will work with all of them, but on the distribution side, we are not going to, you know, double down globally. We are only going to like try to win India first and then have more aspirations to go globally. So we work with everyone outside India. We kind of like become AI content factory for them. We even watch Chinese players who want to produce AI, microdramas, can't do it in China at their cost structures. So we work with everybody outside India. Beyond subscription, do you foresee any other source of revenues? Like, for instance, there's been a lot of talk about branded content being produced through microdrama. How do you look at that aspect? See, branded content is already very big in China, made to one, which is their biggest food delivery app as microdrama inside and they see it as an engagement phenomenon and then they try to sell, you know, coffees and stuff like that through content. Pin Dodo, which is like another biggest e-commerce player in China also has gone berserk on microdrama and they have integrated it inside their app just as an engagement category and then there are brands like Starbucks in China again who are doing like branded content. India today is at a very extreme end of, you know, only subscription based monetization. But you'll see more premium place coming, more alternative revenue sources coming in. That is bound to happen, you know. In fact, we right now are doing some branded content experimentation as well. But do you see branded content as a substantially recognizable source of revenue? No, it's, see, commerce will be the biggest second source of revenue beyond direct monetization. Branded content will be a part of it, but it's not like I can build my revenue strategy around it. So my last question to you, if I say in the next five years, if I want you to break up the revenue, how much would come from subscription? how much would come from advertisement, how much would come from branded content? So globally, what we are seeing is that ad revenue becomes the number one source of revenue. In China, it is already above 70%. Dared subscription only accounts for 20-25%. Although the market started with 100% added subscription, like it started in India. The challenge with India is that the ad market is very small for a business to exist, you know, and already there are so many players. So India, in my opinion, will have to have subscription as the number one source of revenue, which should be like around 50%. And have a long tail remaining, you know, 30-40% coming from ads and 10% everything else combined. Big studios bring capital, IP libraries and star par. What they may not bring is the instinct for volume, speed, and format native storytelling that MicroDrama actually demand. In a game where supply wins, the question is, who's built to keep up? That's it for today. You were listening to this episode on the morning brief. It was produced by me, sound designed by Indrinal Bhattacharji. He was listening to the morning brief, and our other shows including corner office conversation, wherever you get your podcast. (upbeat music)