Owl & Co estimates Meta, ByteDance and YouTube will take 94% of vertical-video revenue outside China in 2026, with the market reaching $150 billion after 42% annual growth.
Advertising drives $131 billion of that total, far ahead of $10 billion from consumer payments and $9 billion from shopping take rates, underscoring how scale platforms dominate the format’s economics.
Dedicated microdrama apps account for only about $4 billion—less than 3% of the market—even with nearly 2,000 apps competing, as leaders such as ReelShort spend about 73% of revenue on user acquisition and app-store fees.
A surge in AI-assisted output has not translated into demand: leading paid apps lifted new series releases 25% in Q2 2026 while aggregate time spent fell 4%, and ReelShort’s live-action titles outdrew AI titles.
Streamers and newer entrants are still pushing into vertical video, but Owl & Co says they are using it mainly to deepen engagement and cut churn rather than to replicate the paid microdrama model.