Hollywood's new obsession is a twist on the classic soap opera

• Mini-drama apps have grabbed Hollywood's attention as they've gained popularity in the US.
• The apps offer bite-sized, mobile-friendly episodes that people are paying to watch.
• They could be a low-cost alternative to traditional shows for Hollywood giants.

Mini-drama apps made popular in Asia are surging in the US — and Hollywood is taking notice.

These apps are best known for their soapy melodramas featuring princes, werewolves, and more, which are presented in bite-sized vertical episodes and meant for mobile phones. China-backed ReelShort is the most prominent purveyor of these, with typical titles like "The Double Life of My Billionaire Husband." Another top player is DramaBox.

Hollywood has been trying to figure out how it can capitalize on the mini-drama craze, and studios like Lionsgate have been evaluating opportunities in the space.

"I get an overwhelming number of questions about this topic every week," said David Freeman, head of digital media at CAA. "Talent is actively exploring the space, creators are drawn to it due to the low cost of content production, and major companies are evaluating their strategic approach."

Freeman said some key questions were which categories work well and whether the format could be expanded to the unscripted realm.

"In time, I anticipate that Netflix will find a way to successfully integrate vertical video and potentially make it part of their strategy to engage Gen Z audiences," he continued.

As TV and streaming giants spend more money on sports at the expense of traditional TV and film, producers, studios, and other players are casting around for other entertainment markets and ways to serve audiences on the cheap.

Social-media stars have already been getting a second look from Hollywood. And now, so are mini-dramas. Industry players said they'd taken note of the marketing on TikTok that the mini-drama apps are throwing behind their stars.

App tracker Appfigures counts 215 short drama apps in the US and estimated US spending on them more than doubled in the past 12 months, to more than $100 million a month in gross revenue.

Hollywood is curious about mini-dramas

Agents and others told Business Insider that while Hollywood is buzzing about mini-dramas, companies are generally still in the initial stages of exploring the format.

One traditional player that's making concrete moves in the space is TelevisaUnivision. It's planning to debut 40 telenovela-style minidramas on ViX, its streaming platform, and intends to expand to other genres like docs and comedy.

Others are at least mini-drama curious. Lionsgate, for one, has been in the early stages of exploring the format, a person familiar with the studio's plans said. Hallmark is another studio that's discussed the format internally, a person familiar with the company's thinking said.

Select Management Group, an influencer talent management firm, is looking for mini-drama actors to sign, primarily those prominent on ReelShort.

Select's Scott Fisher said verticals have "become another place you find talent," much like YouTube birthed digital stars like MrBeast and Emma Chamberlain.

People have questions

Despite Hollywood's interest, it's unclear how these vertical dramas could fit into the traditional film and TV system, which emphasizes high production values and guild-protected talent.

And people in Hollywood told BI they had plenty of questions.

Here are a few:

• These mini-dramas often fall below the budget threshold that would trigger certain rules from the Hollywood guilds. But how can legacy companies take advantage of these productions' low costs without alienating the guilds and their members?
• Soapy melodramas are the most popular form of vertical series, but are they extendable to other genres such as reality TV, docs, and true crime? A+E Global Networks is taking the unscripted route, launching a slate of original series for mobile around its History brand in an effort to reach young viewers.
• Can they make real money? The appeal is that they're cheap to make, but how big of a business can they be? And what's the right mix of revenue between ads and viewer payments? ReelShort parent Crazy Maple Studio's founder Joey Jia said last year that viewers typically paid $5 to $10 a week.
• How should they distribute them? TelevisaUnivision has its own platforms to post such shows. But production companies that don't have their own distribution arms could use the likes of TikTok or YouTube and share the revenue with the platform.
• Are these dramas too far out of Hollywood's comfort zone for it to get right? Hollywood insiders remember how Quibi, Jeffrey Katzenberg's idea to make quick-bite shows, went down in ignominy. The big difference is that Quibi's episodes were more highly produced than today's vertical dramas and didn't employ a "freemium," pay-as-you-go model.

'It's just a matter of time'

Some media insiders think it's inevitable that big streamers and studios will at least test the format's potential.

They've already shown some willingness to play with different formats and distribution platforms. For example, Paramount put "Mean Girls" on TikTok in 23 segments lasting one to 10 minutes. And YouTube and Amazon's Prime Video could make sense as distributors because they're already set up as platforms that allow people to rent or buy individual movies or shows.

"There's just a question of how far are they going to stray from doing what they normally do," Fisher said of the Hollywood players.

Industry analyst Evan Shapiro sees mini, vertical-shot dramas as "toilet television," something made for watching on mobile phones and fitting the scrolling mentality. He added that he believes the format is a natural way for companies to incubate shows for TV.

"It's just a matter of time before you see a drama from one of these players and a fast follow into other formats," Shapiro said. "The big question is, how do we monetize that. But if it takes off, it converts to a premium, wide-screen format for TV."

Geoff Weiss contributed reporting.