Hong Kong Stock Concept Tracking | Online mini-dramas continue to be popular! A total of 305 units were registered in November, and the market size is expected to exceed 100 billion in the long term (with concept stocks)

The Zhitong Finance App learned that on December 5, the State Administration of Radio, Film, and Television announced the filing status of the National Key Online Short Drama Plan for November 2023. According to the data, a total of 305 online short dramas and 1,1445 episodes were registered in November. Among them, some MCN giants and traditional film and television companies also participated in the filing, including Beijing Worry-Free Microvision Media Co., Ltd., Hunan Happy Sunshine Interactive Entertainment Media Co., Ltd., and Migu Digital Media Co., Ltd., a subsidiary of China Mobile Group. CITIC Construction Investment believes that the short drama industry is experiencing explosive growth this year. The market size is expected to reach 20 billion to 30 billion in 2023, and is expected to continue to grow at a high rate next year.

Many years ago, “Shuangwen” was all the rage on the Internet. Stories such as “Going Through Ancient Times and Becoming a Queen” and “The Overbearing President Fell in Love with Me” attracted countless readers. Today, with the advent of short dramas, this exhilarating experience has changed from text to video. From “cool writing” to “cool drama,” short dramas quickly became popular on the internet as an emerging cultural “fast food”.

Since entering November, many listed companies, including Chinese Online, etc., have quickly gained popularity. At the same time, relevant data shows that the daily recharge amount for paid skits on all platforms in China is 60 million yuan. At peak holidays, the peak will exceed 100 million yuan.

In terms of market space, according to the “2023-2024 China Short Drama Market Research Report” recently released by Ai Media Consulting, the size of China's online short drama market in 2023 was 37.39 billion yuan, an increase of 267.65% over the previous year. In the third quarter of this year, 150 online short dramas were distributed in China, nearly double the total for the whole of 2022. The report predicts that in 2027, China's online short drama market will exceed 100 billion yuan.

Based on huge market demand and broad development space, more and more capital has begun to pour into the field of short drama creation. Statistics show, “Oops! “The Queen Comes to Work” surpassed 12 million in 24 hours; “After the Flash Marriage, Mr. Fu Can't Hide His Vest” surpassed 20 million in 24 hours; the filming of “Warriors” only took a week, earned more than 100 million yuan in 8 days, and became rich in 10 days.

There are opinions that short dramas will become an industry with content production capabilities, and are the best choice to achieve commercial purposes such as enhancing content conversion and absorbing traffic. Meanwhile, in the secondary market, there will be more capital movements for skits one after another. Either buy a skit company, or invest in a short drama company.

While meeting market demand and obtaining commercial benefits, many problems have also arisen in the development of short dramas. Some netizens reported that when watching short dramas on the applet, they often encounter false publicity, and there will be no way to complain later. Some netizens may be redirected to another platform after clicking the link, but after recharging, they discovered they were scammed, and they were unable to find contact information for customer service. Furthermore, some short dramas still have vulgar content, and even distorted values.

It is worth mentioning that in late November, the State Administration of Radio, Film, and Television once again launched a one-month special rectification of online short dramas. According to official data, since March of this year, the State Administration of Radio, Film, and Television has supervised various platforms to clean up more than 350,000 episodes (sections) of harmful online short dramas. Industry insiders said that the short drama market is currently in a stage of explosive growth. The problems of mixed content and homogenization are prominent, and industry governance needs to be improved urgently.

Huaan Securities pointed out that since the second half of 2023, short dramas have developed rapidly, reaching new users through purchase volume, and are in the early stages of rapid growth; short dramas are “refreshing” and bring users quick emotional satisfaction. The content is suitable for the general public, the return verification cycle is short, and production costs are low. The industry generally believes that the skit circuit will usher in a new ecosystem, enter the “content is king” + “traffic is king” game stage for leading products, and skits will develop in parallel for some time to come.

Everbright Securities said that the normalization of skit regulation will benefit leading content vendors and skits going overseas. Recommended attention: IP/copyright, film and television production, MCN and other Douyin content ecosystem partners.

Related concept stocks:

Enjoy Group (06988): Through its subsidiary Beijing Enjoy Huayue Culture Technology Co., Ltd., we have taken a solid first step in the field of skits and completed the filming of multiple short dramas of various genres. So far, it has involved various genres such as costumes, exploration, and sweet pets. Furthermore, the company previously established Poly Entertainment Technology through a strategic cooperation between Enjoy Culture and the cultural central enterprise Poly Culture Group to jointly explore innovative businesses such as the central enterprise MCN.

Lehua Entertainment (02306): Lehua Entertainment has received market attention with scarce artists and traffic resources. Currently, the company has 2 signed up artists with over 40 million followers on Weibo, close to 20 artists, and the number of followers exceeds 2 million. The bilateral effects of artists and resources have a stable position in the industry

Bilibili-W (09626): The full-video live-action interactive movie game “Hidden Detective”, co-produced by Baina Qiancheng, Big Fish Express, and Bilibili Games, is progressing steadily and is expected to be officially launched within the year. At the beginning of December, Jefferies released a research report stating that while maintaining the Bilibili-W “buy” rating, the third quarter's revenue is close to expectations. The company expects total net turnover for the year to be at the low end of the 22.5 billion to 23.5 billion yuan range, in line with expectations. The balance of payments target schedule has not changed, and the target price is HK$172.

Reading Group (00772): According to reports, Reading Text Group, a subsidiary of Tencent, recently issued a “Screenplay Collection Order” to enter the short drama industry.

Ning Meng Film (09857): According to reports, Ning Meng Film and Television is the leading producer of short drama quality content, and the first drama producer to run through the business model on the skit circuit. Ning Meng Film and Television said that at present, the company has filmed and launched nearly 20 short dramas, and is simultaneously reserving and developing more than 100 projects. Among them, the boutique series “29” has accumulated over 2 billion views on Douyin, and C-side revenue has already surpassed 10 million.