Picture source @Visual China
text | dataeye
short play goes overseas, and the blue ocean market is quietly opening up.
According to a research report by Guohai Securities on overseas short dramas, the future market space for overseas short dramas is approximately US$36 billion.
On January 8 this year, Mega Matrix (nyse: mpu), a listed company on the New York Stock Exchange, announced the successful acquisition of flextv, a video streaming platform company, becoming the world's first short-drama company to be listed on the U.S. stock market.
’s move kicked off the capitalization of overseas short plays.
Recently, Dataeye Short Play Observation had a conversation with mpu coo steven gao, and further analyzed the current situation of overseas short plays in terms of market status, content production, distribution and investment.
Regarding the current status and trend of the market and , Steven Gao believes that the overseas market is now in a state of scarcity of content, and the English region has the greatest potential for payment. Despite cultural differences, user needs are generally the same. Since there is no mini program ecosystem overseas, it is necessary to make an independent app, and the cognitive and content thresholds are higher. There must be no shortcomings in all aspects of short plays overseas. Investing tens of millions of dollars in content every year will be a hard barrier to entry. Major consolidation will occur within 1 to 3 years after the short drama goes overseas, leaving 1 to 3 relatively influential companies. Short plays will coexist with long plays. User duration will be close in the future. When
talked about content production and , he said that within three years, 100 million US dollars would be invested in overseas short drama shooting and content production, and he would spend heavily to recruit outstanding talents for overseas short dramas. He believes that the cost composition ratio of overseas short dramas is similar to that in China, and the threshold for overseas content is higher in terms of scripts and shooting. Flex TV will conduct targeted and detailed research on user psychology in overseas local markets. Subsequently, overseas screenwriters and content teams will cooperate with each other to polish the script. Overseas local producers will be responsible for filming to minimize the cultural generation gap. When
mentioned the distribution of overseas short dramas into , he said that overseas short dramas are more profitable to distribute, and the average ROI can reach 1.3-1.5, which is higher than the level of domestic short dramas. The overseas short drama is still in the stage of large-scale expansion, and ROI standards will be strategically set accordingly. The platform is constantly updating, and new dramas value influence and exposure more.
is currently in the early stages of developing short dramas overseas. If the company deeply develops content, it will have a huge advantage. Steven Gao said frankly that in the next one or two years, the threshold for short dramas to go overseas will be higher, market concentration will intensify, and a short drama platform worth tens of billions of dollars may be created within three years!
The following is a summary of the conversation:
Market status
dataeye Short drama observation: From the perspective of overseas products, what is the current pattern of overseas short dramas? What model does flex tv use? Are the patterns the same across products?
steven gao: The current overseas market of is in a state of scarcity of content.
As the first echelon, flex tv’s monthly revenue can reach millions of dollars and is growing continuously. The main model of flex tv is to produce scripts in-house, or acquire scripts at home and abroad, and then hand them over to local teams in overseas markets for filming and production, and finally flex tv releases them. Compared with other companies, flex tv spends a lot of time conducting local user research in the target market and pays more attention to user needs and psychology. In addition, flex tv has a relatively strong advertising team, and the advertising strategy has been determined when selecting the topic. Another model in the
industry is "translation drama" (domestic short dramas are directly translated to Shanghai overseas platforms). Although it is currently a common mode for overseas short dramas, after testing, to make a hit drama, it still needs to be original and localized. content.
dataeye short play observation: From the perspective of the overseas market, which markets are the mainstream for short play overseas? In which markets does flex tv go overseas? Why? What themes do audiences in different markets mainly like to watch? Which markets have better prospects?
steven gao: The United States is the main market for flex tv, including North America, South America and Latin America. We are also doing well in the Brazilian market. In addition, we are also doing it in Europe. Europe and the United States are both English-speaking markets. Secondly, we are also gradually opening up the Korean, Japanese, Spanish, Portuguese and Arabic markets. The English area of
has the greatest potential. North American users have better paying habits and a relatively large population base.Secondly, the cultures of Japan and South Korea are relatively close to ours, the shooting costs are lower than those of North America (but higher than those in China), the cost-effectiveness is higher, and they also have common themes.
The Middle East is also a major market, but we haven’t started doing it yet. The number of Muslims is also on the order of billions. Their willingness to pay and their magnitude are relatively large, but their cultural customs are more special.
dataeye short drama observation: From the perspective of overseas audiences, compared with domestic audiences, what is the difference in the audience of short dramas in the mainstream market? What are the differences between audiences in different markets? What kind of people are the core paying audiences? What themes do they like?
steven gao: There is a big difference between users. For example, Korean audiences like to watch themes such as revenge, ghosts and gods, and fantasy, while American audiences like rich families and werewolves. More content themes are still being researched and explored.
But the underlying needs of different markets are the same. For example, female users like to watch themes such as sadomasochism, independence, and equality. The underlying psychological needs are similar. However, in terms of packaging, due to the different cultural attributes of each region, The casting and configuration will be different.
In fact, the short dramas we film do not need to cover the tastes of all users. Our themes are relatively diversified, and we have determined the audience for each drama before filming.
We will also study the better-performing dramas at home and abroad (including long-running dramas such as Netflix and HBO). The reason behind their popularity is whether they meet the psychological needs of users and whether these needs are common to explore overseas What kind of content do users need?
content production
dataeye short play observation: When short plays go overseas, is the content production process the same as in China? What modes are there? What are the pros and cons of each? Which type does flex tv mainly use?
steven gao: The first model of is for our internal team to produce the script, and then find a local producer for production and filming. This is also a traditional model in China.
The second mode is that we solicit external submissions and purchase scripts, and then find a producer to film. The third model of
is that some content producers with content planning and screenwriting capabilities will produce the script and production together. We will share the profits from the share and copyright through joint production in the later stage.
Our own scripts are definitely of high quality, but there are also excellent external works available. These three modes are all suitable for going overseas and cooperate with each other to ensure production capacity. In terms of production of
, we cooperate with overseas local teams and also need some influential actors. We will cooperate with some mcn organizations or some bloggers with traffic and fan base. However, short plays rely more on the plot and content itself to win, and do not rely on the popularity of actors. Therefore, in terms of casting, well-known TV drama or movie actors are not required to participate.
dataeye short play observation: What is the total cost of content production for overseas short play?
steven gao: The proportion of is similar to that in China. The script accounts for about 5-10%, and the production fee may be 100,000-200,000 US dollars. The cost of shooting in the United States will be higher, but in Asia it will be relatively lower.
dataeye short drama observation: What factors are often affected by the cost recovery of ? How to improve success rate?
steven gao: The most important thing for short dramas to go overseas is the content and quality. There is a huge difference between the efficiency of good dramas and bad dramas. Improving the hit rate depends more on user research and script polishing. In fact, we need to be attractive enough for the audience to watch the show to the end, so polishing the script may account for more than half of the success of the show.
flex tv is still based on screenwriters. The director cannot change the script at will, because short plays are not like long plays. The plot is very tight and the points are very tight. Once it is set, it is difficult to change it. Therefore, we will still spend more energy polishing the script, and after polishing it, we will hand it over to the producer for quick filming. Flex TV has a complete and mature process and experience in script review. Therefore, the scripts are outstanding and the success rate and even the hit rate are basically predictable.
dataeye short play observation: What are the main challenges in the localization of content? How to overcome flex tv in general?
steven gao: There are two main challenges in localization.
The first one is the script level, because the short play is the first of its kind in China. Transforming Chinese theme models into a method acceptable to Western users involves the cooperation of overseas screenwriters and content reviewers, so that they can help us adapt it to the local environment. acceptable level.
The second aspect is the shooting level. We will ask overseas directors to directly find overseas actors to convey what we want to convey. We will cooperate well with the overseas team, control the cost, and complete the shooting as quickly as possible.
dataeye short drama observation: What is the salary composition of personnel who produce overseas short drama content?
steven gao: The salary of the male and female protagonists of is relatively high. Generally, it may be one or two thousand US dollars a day. The specific level will fluctuate according to different dramas.
dataeye short play observation: How to find actors? Filming in China with domestic and foreign actors? Or should we hire foreign actors to film overseas?
steven gao: For actor review, we will also have supervisors to follow up the crew throughout the process. The co-producer will have abundant resources.
distribution and streaming
dataeye short drama observation: Is there distribution for overseas short dramas? How is it different from China?
steven gao: The overseas distribution of is not as complete as in China. We will mainly find celebrities, celebrities, and blogger alliances on TikTok or Facebook to cooperate with us. At the same time, we also have a backend of the Flex TV Short Drama Alliance, which provides materials, and bloggers can Re-create the material and post our link. If a user recharges, the blogger will also get a share.
Due to flex tv's own strong streaming capabilities (a delivery team of dozens of people), the delivery efficiency is very high. We have also cooperated with some agency publishers, but found that their delivery results are not as good as our internal team.
dataeye short drama observation: What is the difference between the overseas short dramas of and those in China? How to overcome these differences? If an employee who is seeking employment in China decides to seek employment overseas, what changes should he pay attention to?
steven gao: is actually better to invest overseas than domestically, and it is easier to make a profit. In domestic streaming, everyone is investing in the same content and the same target users, and they are crazy about involution. In the end, no one makes any money. Foreign competition is not too fierce, there are many themes of works, the crowds are highly differentiated, and there is less homogeneous content, so the overall ROI is better than that in China.
dataeye short drama observation: What is the industry average for the ROI of overseas short dramas?
steven gao: Every work is different. If you look at popular products, ROI can reach more than 2, but it also depends on whether we are pursuing volume or profit. The industry average can reach 1.3-1.5.
Overseas short dramas are relatively new at present, and there are not so many dramas. Including some of the dramas currently being filmed by Flex TV, they may be launched one after another in April.
dataeye short play observation: What factors generally affect the level of ROI in ? Are these factors the same as in China?
steven gao: The quality of overseas local dramas will be greatly improved in the later stage of , so the recharge amount of this single drama should still have a lot of room for growth and improvement. But ROI is essentially a platform strategy, so you don’t need to pay too much attention to ROI. I think there will definitely be works worth over ten million (USD) behind the recharge amount of a single drama.
The trend of going overseas
dataeye short play observation: In your opinion, what is the overall trend of short plays going overseas? In what general directions are we heading?
steven gao: I think the first trend of is the quality of content. The shooting quality of overseas short dramas is obviously better than that of domestic short dramas, and the production is more sophisticated.
The second trend is that scripts will occupy an increasingly central position in overseas short dramas. Although the script cost of a short play is not that high, the requirements for the precision of the script are still very high. It requires repeatedly creating dramatic conflicts and reversals in a shorter period of time, the plot tension must be strong enough, and there must be many points that can attract users.Therefore, it is actually not easy to write a satisfactory script. The entire industry may need to invest more in this area in the future.
The third is the centralization of the platform. This industry does not support many platforms. Whether it is movies, HBO, or Netflix, the logic is that the strong will always be strong. The better the brand influence, the more high-quality suppliers will work together and attract more users. This is a continuous cycle process.
The market is still in its early stages, and its position is not very open to . may see very obvious differences in another year or two. If you want to do this by then, the barriers will become very high. There must be no shortcomings in app product operations, content, delivery, etc. Every year, tens of millions of dollars are invested in content, which is a hard barrier to entry. Major consolidation will occur within 1 to 3 years after short dramas go overseas, leaving 1 to 3 relatively influential companies to become an emerging streaming media platform for vertical screen content worth tens of billions of dollars. The form of short dramas will coexist with long dramas, and the user time will be close to that in the future.
dataeye short play observation: Will the emergence of sora and aigc change the overseas short play? What is the current situation of the application of AI in overseas short dramas? Extensive?
steven gao: We now have sora accounts for testing . It is currently in the internal service stage, and there are still very few global releases. I think this is definitely a trend, but it cannot be directly applied to the shooting of short dramas yet. Because we still have relatively high requirements for the quality of our works. But in the future, if its technology becomes more mature, or there are some better application scenarios, it can definitely replace part of the shooting needs, or in other words, when the quality requirements are not so high, it can supplement part of the production, reduce costs and increase efficiency. , is a good application combining scenarios and production tools.
dataeye short drama observation: In the past two years of , have you seen any new features, new phenomena, and new changes in the overseas short dramas?
steven gao: First, let’s compare the two products of short plays and long plays. The characteristics of long plays are that the story structure is complete and the characters are relatively full, which can provide artistic and aesthetic value. Short plays are characterized by compact plots and emotional value. The consumption scene of short dramas is the fragmented time in the vertical screen of mobile phones. This consumption scene has a very different positioning from that of long dramas. Therefore, in the future, the two forms of long dramas and short dramas must coexist. In terms of user viewing time, short dramas will definitely occupy more user viewing time, but in the end, users of these two products, short dramas and long dramas, will watch more The duration may not be much different.
Second, the market size of short dramas is growing very fast in China. Last year, the market size of 40 billion yuan was basically close to that of movies. This year, it is likely to exceed the market size of movies. It creates a user-pays model. Traditional film and television dramas generate more revenue from advertising and investment models, which are essentially tob formats. The advantage of short plays is that they can innovate a lot. In the next few years, there will definitely be a massive increase in the number of short dramas released overseas. The overseas market is definitely larger than the domestic one. Because the number of users is greater, overseas users have better paying habits, and there will be more possibilities in terms of themes.
dataeye short drama observation: Has ever understood the overseas model of customized dramas?
steven gao: brand customization drama is a good direction. Whether this method can produce actual effects on brand marketing, including its impact on the brand's tone, is a process that needs to be tested. But its business logic is definitely established, and in the future overseas short dramas will have more derivative commercial gameplay.
Observation on flex tv
dataeye short drama: What are the major milestones in flex tv’s overseas journey? What stage is it at now? What are the main markets? What are the results?
steven gao: flex tv was the first to produce Thai dramas. The first node was in May and June last year. Flex tv achieved very good results in the Thai market and ranked first in the Thai market. This is the reason why we pay attention to this product. So we started talking about the acquisition of flex tv in November last year and completed it in January this year.The second node of
is that when the company was doing overseas short drama business, it discovered that this product has high capital investment barriers and has high requirements for financing capabilities. The market is also at a critical point in its growth spurt, so we join forces with the MPU team to join forces.
We are currently in the second stage, continuing to increase investment in content, and the standardization process for overseas dramas has been completed. We will also do some relatively large financing in the future and continue to deepen our efforts in the content field.
dataeye short drama observation: What are the main problems that flex tv has faced in going overseas in recent years? What common pitfalls have you encountered? How to overcome it? What kind of experience do you have to share?
steven gao: The difficulties and barriers of still require continuous and innovative good content, and good content that users like. Because the content industry cannot be monopolized and a hundred flowers bloom, we also hope to establish cooperation with more good content parties.
dataeye short drama observation: is the first short drama to go overseas. What are the advantages of flex tv? What are the key points in the capital market currently focusing on when short dramas go overseas? Which indicators are of greater concern?
steven gao: First of all, we are the only company listed on the US stock market and focus on data compliance. All information disclosure data is accurate and credible.
The second point is brand influence. We belong to the first echelon of companies that export short dramas overseas, and we have the brand of an MPU listed company. There will be more content parties willing to cooperate with us. We can also provide a better and more benign benefit distribution mechanism. For excellent content partners, there are also more opportunities for capital integration.
The third point is financing ability. We can directly connect to the US capital market. Quibi raised more than one billion US dollars in 2020 to shoot vertical screen shorts. The production is very sophisticated and has won an Oscar. But it eventually closed down because the cost of filming was too high. Although it collapsed, it also shows that the U.S. capital market recognizes this direction, but requires a different model and path in terms of play style and mechanism. The fourth point of
is the software advantage. We hope to work with good script studios and producers in the industry to establish a system of benign content suppliers, similar to the Netflix Studio model. We continue to screen and rate these content providers to distribute more orders to better content providers. We are currently only looking for overseas teams as the producer of
. If you buy a script, the script studio can come from China, but it must have the ability to localize the script. We have a strict set of audit standards in this regard.
dataeye short drama observation: flex tv’s application and attitude towards AI+ short dramas?
steven gao: We are paying attention to the direction of AI character chat applications, and we are willing to be open to investment or cooperation. Because we will shoot a large number of short plays in the future, in the process, the characters in the short plays can be made into AI virtual humans to chat and interact with users, communicate in real time, and upgrade the experience. The short play is equivalent to our entrance, which can be followed by social chat or companionship functions. We also hope to make the characters into IPs to achieve interaction with users.
dataeye short play observation: It is a general trend for short plays to go overseas. In fact, more and more practitioners and even laymen are entering this track. How do you think the short play overseas is becoming more crowded and complicated?
steven gao: I think the volume is passively generated. In the past two years, too many teams have quickly poured into short dramas. It may be profitable in 2022, but the market will be too crowded in 2023. According to the data we know, only 10% of teams may be profitable, so many teams passively move overseas. But one problem is that overseas short dramas do not have a small program ecosystem, so they must establish app platform products and operate them. The threshold for producing content overseas is relatively high, and the continuity and sufficient supply of content must be ensured. Some teams have three or five dramas on hand and want to try putting them on an app. This is not feasible and will also affect user stickiness. In addition to the lack of shortcomings in the launch of
, the content also needs a stable supply, coupled with financial barriers and organizational ability requirements, it is actually very difficult.
This year, everyone will slowly realize that the market will clear out, the number of platforms will gradually decrease, and tens of millions of dollars will only reach the entry threshold.The remaining platforms that do not invest enough in content will become content suppliers to cooperate with large platforms.
At present, overseas short dramas will not be involved in the status of domestic short dramas. The supply of good works is very scarce in the market now, and works that can meet our review standards will basically have no problem in being released. Moreover, the technical barriers to overseas short dramas are high, and there will be no multi-platform involution like in China. At the beginning, when everyone was small in scale, the mutual influence was relatively small. We were still in the stage of jointly exploring the market and cultivating users' awareness and habits. With a priori product experience in the purely market-oriented development of China’s short video format, we believe that the maturity and verification of this form can be fully exploited overseas.
dataeye short drama observation: What are flex tv’s plans for 2024? Target? layout? In what ways are expectations achieved?
steven gao: We issued performance guidance on March 1st, and the recharge amount in January and February reached US$6.5 million. This year we must reach at least the revenue target of US$100-200 million, increase investment in content, and prepare to invest US$100 million in production costs within three years. Secondly, we need to establish a stable shooting base and shooting process, and scale up the shooting and production of overseas short dramas.
company is currently launching a recruitment plan for outstanding content talents and a content supplier cooperation plan this year, and welcomes cooperation from all parties in the industry.
We must achieve at least a revenue target of US$100-200 million this year, increase investment in content, and prepare to invest US$100 million in production costs within three years. Secondly, we need to establish a stable shooting base and shooting process, and scale up the shooting and production of overseas short dramas.
dataeye short drama observation: What big moves will flex tv have in 3-5 years? Are there any major changes or major milestones that practitioners should pay attention to in the next five years when short plays go overseas?
steven gao: I think there will be major consolidation in this industry within one to three years, leaving 1 to 3 influential companies. The two forms of short dramas and long dramas must coexist, because short dramas provide differentiated products that are easier to attract traffic, and complement each other in content supply with long dramas, and short dramas rely on their fragmentation and rapidity. The product features of rhythm, low viewing threshold, and intensive cool points will show faster and higher market growth. On this basis, in the long run, there will definitely be several leading platform companies in the short drama industry, and we also hope that we can become one of them.
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