How to Monetize Vertical Microdrama in the US
Even as the buzz builds around vertical microdrama and more and more content, innovation, and creativity flow into this new storytelling mode, how to make it profitable remains an open question. Celestine Pictures founder and executive producer Grace Gao discusses its origins in China, its transition to America, persisting quality/quantity disparities, the emergence of a few successful brands, the monetization and distribution models that will sustain and grow the industry as a whole, and how the interest of major platforms like Netflix will impact vertical content creators in discussion with Chris Pfaff in this clip from Streaming Media Connect 2026.
Tracking Trends in China
Pfaff starts the conversation by noting that the vertical drama business isn’t new; it comes from Asia. He asks Gao, “What do you see in terms of either the transliteration or the transfer of some of this IP into the American market?” And he wonders if it’s too late for the US to benefit, or “are we just in such early days that it doesn’t matter?”
“I think it all goes back to the monetization model that could be enhanced over time,” Gao replies. She describes the trend cycle: Basically, microdrama is a medium from China, and any new trend is on a 3–5-year time lag to get to the US market. Branded content collaboration has been happening in China since 2021, so it’s getting to the US now. Gao says the benefit of microdrama becoming a mainstream medium for audiences is that when companies want to draw in new demographics for their brand, they can use it to expand their base. Or they can continue in the same branding direction and enhance how they target their preferred group, as, for example, ReelShort does, she says.
Quantity First, Then Quality
“So then the benefit is also bringing in different sides of investment coming from the commercial and branding side of the business outside of traditional film and TV to elevate the value of this medium altogether,” Gao continues. “We have observed not only from [the] commercial [sector], but also getting more [from the] tech sector or even educational sector of people who care about this newly formed aspect ratio of storytelling, to commission and sponsor more materials and distribute it to the existing platforms could be a way to [approach] that as well.” She describes how microdrama embodies the first step of introducing international IP, which is “localizing and translating from hit shows or hit materials from China.” It’s important to concentrate on content volume first for a new platform, Gao asserts. Quality comes second.
“And we are at this tipping point here in the States,” Gao believes. “The volume has already been established for the top performers like Goodshort [or] DramaBox out there. And the newly founded domestic platforms are still playing the volume game,” so once that’s established, they can “experiment into [the] quality or novelty side of the business. And that’s where we can get different genres and/or different types of creatives into the space at the same time.”
Not Really Competitors
“Which is very exciting,” Pfaff says. Netflix and YouTube have begun featuring shorts, so “how does a ReelShort or a DramaBox survive this sort of convergence crisis where giant platforms might eat their niche, or do they?”
Gao notes that her “read on that is, they do not serve the same function at all. Netflix did not need to acquire more users from people who are already subscribing to it on the phone. And then the microdrama space of apps, they started off acquiring users first. … They reversely built where the content strategy is going for them to enrich and enhance the material on the app itself. So I do not think they’re conflicting, but it is a really good sign that these bigger streamers are looking into the format. It means like, okay, everyone one day will be consuming it on mobile,” she explains.
Join us May 12–14, 2026 for more thought leadership, actionable insights, and lively debate at Streaming Media Connect 2026! Registration is open!
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