Against the backdrop of the continued global surge in digital content consumption, Chinese internet companies are riding the wave of short dramas to launch a new round of cultural exports. ByteDance’s Douyin short dramas have recently been reported to be pursuing a dual-track overseas strategy—after launching the free short drama platform Melolo in Southeast Asia last November, they have now targeted the Japanese market with the paid short drama app PikoShow. The deepening of their globalization strategy has drawn significant industry attention.
Image source: Internet
Testing the Japanese Market
The short drama app called PikoShow has recently launched in the Japanese market. Unlike Melolo’s “advertising + free viewing” model, PikoShow adopts a typical “free first, pay later” strategy: the first 3-5 episodes are open for free as lead-in content, while subsequent episodes require payment to unlock and watch.
This model shift is seen as ByteDance’s precise strategy tailored to different market characteristics. Japan, as the world’s third-largest streaming market, has mature user payment habits, and the per-episode payment model can effectively increase ARPU value. Data shows that Japan’s video-on-demand market reached $4.5 billion in 2023, with short, fast-paced vertical screen content becoming the new favorite of Generation Z. The launch of PikoShow precisely fills the local market gap in fast-paced, strong-plot short dramas.
Image source: Internet
Southeast Asia as a Testing Ground for the Free Model
In contrast to the paid trial in Japan, Melolo’s operating strategy in Southeast Asia demonstrates a completely different business logic. This short drama app, which focuses on free viewing, has covered more than 30 countries and regions including Indonesia, Vietnam, and Thailand since its launch in November 2023. According to the latest DataEye data, as of the end of February 2024, Melolo’s global downloads exceeded 1.3 million, with Southeast Asia contributing 99% of the traffic, Indonesian users accounting for nearly 60%, followed by Vietnam and Thailand.
This regional difference stems from market characteristics: Southeast Asia has a lower per capita GDP but a large population base, and users are more price-sensitive. Melolo’s monetization model through embedded ads and brand placements has resulted in an average daily user stay time of 78 minutes in Indonesia, showing strong user stickiness. Industry insiders analyze that this “rural encircling the cities” strategy not only reserves a user pool for future paid models but also dilutes content costs through large-scale traffic.
Image source: AppMagic
Ten-Billion-Dollar Blue Ocean Battle
TikTok’s official “Short Drama Overseas Marketing White Paper” reveals a grander market picture: in the next 3-5 years, the overseas short drama market is expected to leap from the current hundreds of millions of dollars to the ten-billion-dollar level. By region, the US leads with 45% of expected revenue, followed by Japan and South Korea (25%) and Southeast Asia (18%). This growth expectation is prompting a collective charge by domestic companies—besides ByteDance, companies like Maple Leaf Interactive and Dianzhong Technology have built distinctive overseas matrices.
Image source: TikTok for business
Next Stop: North American Market?
Data shows that in February 2024, global short drama app in-app purchase revenue reached $58.7 million, with the US market accounting for $26.54 million, or 45%, and user willingness to pay is 7.2 times that of the Southeast Asian market. But the challenges are also obvious: giants like Netflix and Amazon have begun to lay out vertical screen content, and local regulations on data privacy and content review are stricter.
Facing a complex situation, Chinese companies are building differentiated barriers. ReelShort’s “reward the screenwriter” feature in the US allows users to pay to change the direction of the plot, and this highly interactive model has raised the repurchase rate to 34%.
From Southeast Asia to Japan, from free to paid, the overseas journey of Chinese short dramas is writing a new business legend. This is not only an upgrade and breakthrough for the content industry, but also a global projection of China’s cultural soft power.