The Rise of Micro-Dramas in China

Recent years have seen the rapid rise of “micro-dramas” as a form of mainstream entertainment in China. According to a report by iResearch, a well-known industry research and analysis consulting company, the market size of micro-dramas in China in 2023 reached CNY35.9 billion (approximately USD5.07 billion), marking growth of 234.5% since 2022. The estimated size of the micro-drama industry for 2024 is CNY48.5 billion (approximately USD6.85 billion). The reports forecasts that the size of the micro-drama market could grow beyond CNY100 billion (approximately USD14.12 billion) within the next five years.

Per the rules of the National Radio and Television Administration (NRTA), the term “micro-drama” refers to an online audio-visual drama/series, each episode of which runs from dozens of seconds to 15 minutes in length, which has relatively clear themes and storylines, as well as relatively consecutive and complete plots. Per the iResearch report, more than 50% of micro-drama viewers have spent money to unlock new episodes, with the average paying viewer spending between CNY11 and CNY50 (between approximately USD1.50 and USD7) per month. These statistics should be looked at against the background that there are approximately 1.1 billion internet users in China as of June 2024.

The government has quickly identified the value, both economic and ideological, of micro-dramas. Both the central government and the local governments have rolled out policies to support the growth of micro-dramas as a burgeoning form of entertainment and source of economic growth. For example, on 10 January 2024, the NRTA issued a notice of a “creative plan” for the country to produce 100 micro-dramas on a variety of cultural themes, aiming to promote local tourism through this “micro-drama + cultural tourism” recipe.

On 30 August 2024, the Guangdong Provincial Radio and Television Administration issued a notice about measures to “promote the healthy and prosperous development” of micro-dramas in Guangdong Province. The measures published cover a wide range of areas, including, for example, the enhancement of infrastructure, improving and increasing the efficiency of censorship processes, monetary grants, awards, and schemes to develop creative talent. Roughly speaking, the current censorship regulations categorise micro-dramas into three types based on production costs:

Two categories of issues may be representative of the problems exposed so far in the micro-drama sector.

One is compliance. This primarily refers to the content of micro-dramas. There are broad guidelines for content producers to follow in China. However, with the explosive growth of micro-dramas, many producers have gone beyond what is deemed appropriate by the government in order to acquire traffic. Not only the government, but also the platforms that host the micro-dramas, have now strengthened their regulation of the content of micro-dramas. As recently as 11 September 2024, WeChat announced the removal from its platform of 479 micro-dramas and 46 WeChat mini-programs. These micro-dramas and mini-programs were criticised for, among other things, containing excessive violence and bloodshed, promoting superstition, and violating ethics and morality. The real start of micro-drama regulation was 2022, which witnessed an explosion of new rules: micro-dramas have now entered into a new stage of heightened regulation.

The other problem is copyright infringement. Overall, the micro-drama sector has seen extensive infringement in the use of other people’s copyrighted material and other intellectual property. Typical infringements include piracy (such as unauthorised use of self-cut clips through mini-programs), unauthorised productions and unauthorised remakes. On the anti-piracy front, there have been reports of local governments raiding pirates and sending perpetrators to jail. For example, in July 2024, the Tianjin Municipal Police Department was reported to have raided a group of pirates that had illegally copied more than 300 micro-dramas. On other fronts, there have been a number of court cases published involving copyright infringement of or by micro-dramas. Considering the potentially very substantial economic value of a micro-dramas these days, producers and investors should be vigilant about rights clearance for micro-dramas, copyright and otherwise. It is recommended that they look to the customary practice in the television and film sectors for reference, including, for illustrative purposes, chain of title due diligence, script clearance, name and likeness release, etc. For producers’ and investors’ protection, proper contracts are recommended as well.

The micro-drama business in China is still in rapid development. It will likely pose new business and legal challenges along the way, which are worth the continued attention of both the business and legal communities.