In 2024, the short drama industry has been soaring internationally, with the market ceiling continually rising.

Data shows that the number of overseas short drama apps has increased from 41 in 2023 to 202 in 2024, with in-app purchase revenue growing nearly twelvefold. Leading platforms like DramaBox, ReelShort, and ShortMax saw their in-app purchase revenues reach $127 million, $130 million, and $82.87 million, respectively, in 2024.

While Western markets (like the US and Europe) are undoubtedly the top destinations for short dramas, Southeast Asia is also emerging as a major player with substantial growth potential. In the top 10 markets for short drama app downloads and revenue in 2024, Southeast Asian countries occupied 3rd and 4th positions, respectively. Thanks to geographical and cultural similarities with China, Southeast Asia has even become the go-to market for many short drama platforms. Just last week, ByteDance launched Melolo, a short drama app aimed specifically at Southeast Asia.

Compared to the mature markets in the West, the Southeast Asian short drama market is still taking shape, presenting more opportunities but requiring greater patience and investment. So, is expanding into Southeast Asia a worthwhile decision for short drama companies?

1. Low Payment Rates: IAA as the Primary Monetization Strategy

Southeast Asia’s short drama market has huge potential but faces challenges in monetization, primarily due to the low per-user payment rates.

In 2024, Indonesia ranked second only to the United States in terms of downloads, with over 50 million downloads. Other countries like the Philippines, Thailand, and Malaysia also made the top ten for downloads. On the revenue side, Indonesia, Thailand, and Malaysia secured spots in the top ten, with total earnings of $17.46 million, $10.89 million, and $10.62 million, respectively — each showing multiple times growth compared to the previous year.

Despite strong positions in download and revenue rankings, Southeast Asia lags significantly behind other markets in terms of Revenue Per Download (RPD). For instance, Malaysia, the region’s highest in RPD, averaged $1.53 per download in 2024, which is still far behind the $5.00 of the US and $4.50 of Japan.

On the other hand, Southeast Asian users show good retention rates and long viewing times, with a strong willingness to unlock episodes through ads. As a result, “free episodes + ad monetization” has become the dominant business model for short drama apps in the region.

In comparison to the US and Canada, where user payment rates are high and there are more high-value users, in-app purchases (IAP) account for a larger share of revenue. This model, based on episode payments or subscriptions, is exemplified by platforms like ReelShort. In Southeast Asia, however, In-App Ads (IAA) dominate, where users unlock episodes by watching ads. Representative platforms in this model include DramaBox and FlexTV.

2. Cost Advantage but Distribution Challenges

While Southeast Asia offers content and cost advantages, local distribution remains a significant challenge.

It’s well known that producing short dramas in Western markets is expensive. The cost of producing a short drama in North America typically ranges from $150,000 to $200,000, with an average customer acquisition cost of about $15 per user. These high costs put considerable pressure on platforms.

In Southeast Asia, however, the proximity in culture and language means there is greater overlap in user preferences for themes and content. Many platforms choose to translate and export popular domestic Chinese scripts or IPs to Southeast Asia. For example, DramaBox exported the hit Chinese short drama My Stepmom in the 1980s to Southeast Asia, translating it into multiple languages and achieving significant influence in the region.

In addition to translated dramas, the production costs for local Southeast Asian dramas are also relatively lower. Short Drama Study Room reveals that producing an 80-minute short drama of comparable quality to domestic standards in Southeast Asia costs about $50,000 — roughly 3 to 4 times cheaper than in Western markets.

However, Southeast Asia’s market is far more fragmented compared to China’s unified large market. The region includes 11 countries, such as Myanmar, Thailand, and Cambodia, spanning over 4.57 million square kilometers and boasting a relatively dense population. Moreover, these countries are multi-ethnic and multi-religious, with over 90 ethnic groups. The economic development, policy, legal environment, and cultural customs vary widely across nations.

As a result, there is no “one-size-fits-all” solution for short dramas. A drama that becomes a hit in Thailand might not resonate in Indonesia and could even face local censorship. Both local and translated dramas must be localized carefully to avoid missteps.

Furthermore, Southeast Asian short dramas rely heavily on ad-based distribution, with ad spending matching that of Western markets. According to data from Guangda, in 2024, the translated short drama The World Treats Me Kindly (from the Chinese short drama The World Is Kind to Me) had more than 22,000 material submissions for ad campaigns, with the top ten short dramas each having over 10,000 submissions. Choosing the right user acquisition channels and creating engaging, attention-grabbing ad creatives are key to standing out in the competitive Southeast Asian market.

3. Long-Term Strategy Needed for Southeast Asia

In summary, the Southeast Asian short drama market is a promising space to explore, but it’s not a path to quick profits.

At present, most short drama platforms rely primarily on “in-app purchases” and “advertising” for monetization. Especially in Southeast Asia, where the overall payment rates are low, platforms must rely heavily on ad-based revenue models (IAA). This means platforms not only need to optimize ad placement effectiveness but also increase their user base. By continuously attracting more active users, platforms can achieve long-term profitability.

In this process, efficiently acquiring and retaining high-quality users is a critical challenge. NetMarvel offers powerful support to short drama platforms through its one-stop global traffic acquisition and ad placement solutions.

NetMarvel’s robust data analytics and optimization algorithms help short drama platforms accurately target their ideal users, optimize ad strategies, and achieve dual growth in traffic and revenue.

Through collaboration with NetMarvel, platforms can attract high-value paying users as well as a broader user base from mid- to long-tail traffic, providing sustained momentum for scaling and sustainable operation in the competitive Southeast Asian short drama market.