Anyone who moved in the media industry in 2009, and I did, remembers the collective euphoria around transmedia storytelling. Conferences and panels unanimously proclaimed that linear content had had its day and that stories now had to breathe in parallel across television, web, apps, and alternate reality games. Audiences were supposed to actively immerse themselves, puzzle along, and consume across platforms.
The economic reality was sobering. The production effort for genuine transmedia worlds was immense, the technological infrastructure fragmented, and in the end a gap opened up between investment and refinanceable revenue. After Kill Your Darling, in which I was involved myself, and Dina Foxx from the UFA Lab, along with a few small, pan-European approaches, the concept became mired in its own complexity.
Vertical dramas are currently failing in Europe for a different mechanism, but following the same basic pattern: a format built on specific, structural conditions in its market of origin is sold as a global trend, even though those conditions are missing elsewhere. With transmedia it was the infrastructure; with vertical drama it is three other factors that don't easily transfer to Europe. And I say this after an intensive trip to China and observations and conversations there.
First, production speed. In China, entire seasons with up to one hundred episodes of one minute each are produced in under two weeks, at production costs between 100,000 and 300,000 dollars per show (Source: Maureen Kerr, Vertical Drama Is Splitting in Two, March 2026), and in cases fully realized with AI, at markedly lower, double-digit production costs per minute. European wage structures, labor protections, and fee systems break this calculation as soon as one tries to reproduce the model here one to one. And AI is still more a playground for enthusiastic prompters and creatives than a field in which a format with such precise audience targeting emerges as it does in Asia.
Second, payment infrastructure. Users watch the first episodes for free and then pay via micro-transactions of 0.20 to 0.50 dollars per episode or weekly subscriptions between 17 and 20 dollars (Source: Maureen Kerr, March 2026), seamlessly embedded in ecosystems like WeChat or Alipay. This payment frictionlessness does not exist in Europe in comparable form, neither in infrastructure nor in users' willingness to pay. TikTok or YouTube would have the technical prerequisites, but whether users want to spend additional money alongside their Twitch, streaming, and gaming subscriptions remains to be proven.
Third, customer acquisition. This represents the true tipping point where the economics break down for Western markets. Industry analyses reveal that providers spend an average of $5 in acquisition costs per user while generating only $3 in revenue, resulting in forecasts that up to 70 percent of vertical drama apps could fail due to these negative unit economics (Source: Streaming Lens, Vertical Drama Business Model, January 2026). Even market leaders like ReelShort, with approximately $400 million in revenue in 2024, operated at a loss at times due to elevated marketing and amortization costs (Source: Media Partners Asia via Variety, November 2025). If even market leaders barely achieve profitability in a market characterized by extremely low production costs and seamless payment integration, a slightly weaker calculation for European providers will not suffice to bridge the gap. Both production costs and customer acquisition are structurally more expensive here than in China. This is not a gradual issue, but a fundamental one.
The global revenue figures used to promote the format over the past two years confirm this picture of a geographically highly concentrated boom. Omdia values the global market for short-form drama at $11 billion in 2025 and projects $14 billion by the end of 2026, yet only $3 billion of that lies outside China, with the US representing the largest international market at approximately $1.5 billion (Source: Omdia, Maria Rua Aguete, MIP London, February 2026, via Variety and Deadline). By 2030, the market is forecasted to significantly exceed the $20 billion mark. Media Partners Asia estimates the domestic Chinese market alone at $9.4 billion in 2025—surpassing box office revenues there for the first time—and anticipates $16.2 billion in China by 2030 (Source: Media Partners Asia, The Micro-Drama Economy, September 2025). China accounted for approximately 83 percent of global revenues in 2025 (Source: Omdia via VideoWeek, February 2026). The growth rates are real, as is the geographical distribution, clearly pointing to a core Asian market with Europe as a peripheral phenomenon.
Doing the math, the market outside China is actually growing even faster than the Chinese home market itself, with MPA forecasts of 1.4 to 9.5 billion dollars between 2024 and 2030, a rate of over 37 percent CAGR compared to around 15 percent in China (Source: Media Partners Asia, The Micro-Drama Economy, September 2025). Anyone looking only at the growth curve sees no special case at all, but an accelerating globalization. The decisive point therefore lies in the composition of this growth, not in its rate. According to Omdia, the US clearly leads international markets with 66 million monthly active users in 2025, followed by India, Brazil, and Mexico, which together outstrip Europe in reach. Within Europe, the UK leads with 8.2 million monthly active users, ahead of Germany with 4.4 million (Source: Omdia via Advanced Television, May 2026). International growth is real, then, but it is concentrated on the American market with its deep micro-payment culture and on populous emerging markets. Continental Europe, Germany included, clearly sits in a second tier by user numbers. Reliable revenue figures for the individual European markets are not yet available, which is itself an indicator of market maturity.
The pattern of 2009 is also repeating itself in the legitimation of the format through familiar faces. Back then, studios added webisodes and spin-offs to established IPs like 24 or Heroes to endow the new narrative format with existing brand equity. With vertical drama, the logic operates in reverse, but to the same end. Following Jimmy Fallon, James Franco has become the most prominent Hollywood figure to date to join an original micro-drama production, starring in "Love, Lies & Frank" on the Shortical platform under the new SAG-AFTRA Verticals Agreement (Source: Variety, August 12, 2026). Rather than extending the IP, the format is validated by the star. Whether this produces the same effect on European audiences as the supplementary content for "24" or "Heroes" once did is precisely the gamble being taken—without robust evidence from comparable markets.
The specialized trade press in Europe is similarly skeptical. In February 2026, VideoWeek ran a title specifically warning of an audience backlash in Europe against emerging AI-assisted micro-drama production (Source: VideoWeek, There'll Definitely be a Backlash, February 4, 2026). Compounding this are the European data protection framework and App Store fees from Apple and Google, which further squeeze already tight margins—for creators and viewers alike. In Europe, developments are not building on existing demand and established habits; instead, there is hope for new platforms and structures to significantly relieve the heavily eroded margins of major production companies.
European audiences are socialized differently in terms of media consumption. While hyper-emotional B-movie tropes, toxic revenge storylines, and melodramatic intrigues hit the exact nerve of a mass market primed for quick dopamine kicks in China and Southeast Asia, core consumers in Europe expect narrative substance in both streaming and linear television. The formats successful in Asia—primarily web- and mobile-focused—fail to gain traction here, whether as paid subscription models or ad-supported long-term formats. However, one must not overlook that in many other media sectors, Asian storytelling formats are gradually capturing audience interest, as evidenced by properties like "Squid Game".
Looking at 2026 reveals a pattern that has recurred since 2009: a format with genuine, verifiable success metrics in its market of origin is generalized into a global narrative about the future of storytelling, even though its economic logic remains tied to specific, non-transferable conditions. Vertical drama is not a global trend experiencing a European delay; it is a Chinese phenomenon with isolated spin-offs whose economic viability in Europe has yet to be demonstrated.
Therefore, rather than chasing yet another trend, tying up resources, making promises, and hoping for margin relief, the European market should analyze more closely where different audience segments are gravitating and what consumption habits are emerging. AI as a production replacement is not the solution—that is not how vertical drama functions. How can formats be articulated with greater clarity, how can business models be adapted, what do new extensions look like, and how can brands be reclaimed while rethinking business models and opening up new narrative universes? What economic impact does the creator economy have on this realm? And finally, the path taken by Asian markets in this sector followed a trial-and-error principle based on visible trends. Crucially, initial seed funding was provided largely by production companies themselves. Seeking funding through committees and grant programs mirrors the exact approach of 2009, when a Transmedia Manifesto attempted to establish pan-European principles to make the narrative form tangible for funding bodies. One can unfortunately see where that led. Vertical drama IS a business model—and it must be understood and approached as such.