Two-thirds of microdramas outside China are AI, report says

Two-thirds of the vertical dramas released outside China in the third quarter of 2026 were AI generated, according to a new report from the consulting firm Owl & Co.

The finding comes from Owl & Co.'s new "What We Watched on Vertical" report, which covers releases across 20 top platforms. The report itself sits behind a DocSend gate, so the report's figures in this story come from The Hollywood Reporter's October 20 account of it. Owl & Co.'s own reports page dates the study to October 2026 and says it is drawn from the firm's Vertical Index, which tracks more than 85,000 microdrama titles across 20 platforms.

Owl & Co. puts the AI share of those releases at 3 percent in the first quarter of 2026 and 28 percent in the second, so the climb to two-thirds happened inside six months. In China, where the format took off first, Owl & Co. says more than 95 percent of titles released in the first three months of 2026 were reportedly made using AI.

What is a microdrama?

A microdrama is a serial built for a phone in short vertical episodes, usually a few minutes each, watched inside apps such as ReelShort, DramaBox, NetShort and DramaWave. The format has grown past its niche quickly enough that Owl & Co. values the wider vertical video economy outside China at $150 billion for 2026, a 42 percent gain over 2025, according to Variety's August 21 report on Owl & Co.'s earlier findings.

Owl & Co. counted 63 billion microdrama views and 2 billion viewing hours across the apps it tracked in the quarter. TikTok's free PineDrama app took more than half of all views and added 15,501 new titles in the quarter, a rise of more than 300 percent on the previous quarter. Among paid apps, Owl & Co. gives DramaBox 36 percent of views, ReelShort 29 percent, NetShort 20 percent and DramaWave 11 percent.

The winners skew AI. Owl & Co. says only one live-action title broke the top five verticals by minutes watched on paid apps, ReelShort's My X-Ray Vision Sees Right Through You, and only two live-action titles reached the top 20. The number-one performer, ReelShort's The Great and Powerful Genie, is an AI-generated title, per Owl & Co.

The report also shows a counter-current. Owl & Co. notes a pullback toward live action in China, where AI titles arrived first, and found that at ReelShort a live-action title has a higher chance than an AI title of staying in the top 10 percent by views 30 days after release. MediaPost reported the same two-thirds figure on October 21, along with Owl & Co.'s note that more than 95 percent of Chinese microdramas were AI generated.

For creators building verticals with AI video, the two findings point in different directions. AI titles took the biggest share of releases and the top of the chart in the quarter Owl & Co. tracked, but the retention number measures whether viewers stay, and Owl & Co. reports it as a higher chance rather than a rule.

A July Owl & Co. report with Holywater Tech, the company behind the My Drama and My Muse apps, argued that AI-generated vertical series convert paying subscribers at about the same rate as live-action ones. In September, The Hollywood Reporter reported that Los Angeles microdrama workers were seeing fewer auditions as apps moved to synthetic performers.

Owl & Co. lists "What We Watched on Vertical" on its reports page; the report sits behind a DocSend gate, and the report's figures come from The Hollywood Reporter's account of it.

Report card

• Report: What We Watched on Vertical
• Publisher: Owl & Co.
• Published: October 2026
• Sample: Vertical Index, 85,000+ microdrama titles across 20 platforms
• Top title: ReelShort's The Great and Powerful Genie, an AI-generated title
• Read it: https://www.owlandco.com/reports