Vertical Video Economy Worth $150B, Even Without China – Owl & Co Report

Vertical video will generate $150B this year – and that’s excluding China, the country where it originated. Owl & Co’s inaugural Vertical Economy Report revealed the stat, which is up 42% on the figure the previous year and highlights how quickly microdrama has taken hold as a major content vertical. So much so, in fact, Hernan Lopez‘s Owl & Co is dubbing it “the third audiovisual language.” The report claims to be the first that sizes vertical video as a whole rather than a collection of apps, and that other market estimates have tracked only microdrama, a subset it says is worth roughly $4B of the overall total. The Vertical Economy Report includes advertising, consumer and shopping take-rate revenue across TikTok, Instagram and Facebook Reels, YouTube Shorts and vertical-native apps, including all microdrama apps and live shopping platform Whatnot, but not brand deals paid direct to creators and GMV (gross merchanize value) booked by sellers. Watch on Deadline As such, the findings show Meta, ByteDance and YouTube generate 94% of vertical video revenue outside of China, with advertising the model scaled business model at $131B, ahead of consumer revenue and shopping fees. “Vertical is no longer optional,” said Hernan Lopez, founder of Owl & Co, who was previously founder of Wondery and CEO of Fox International Channels. “As multiple audience cohorts shift time spent and frequency to vertical, revenue, talent and IP are following.” The report also shows microdrama is “disrupting itself.” Despite the sector growing from $3B in 2025 to a projected $4B this year, “growth is shifting from in-app purchases to advertising and subscriptions including web-based.” Free ad-supported apps went from 15% of time spent to 83% in five quarters, posing questions for the business model. Other findings back up the notion that AI is widely used in microdrama production, which has driven up the number of releases. Across the seven leading paid-for apps, series releases rose “more than fivefold” since the second quarter of this year. However, average time spent per new title dropped. The report draws on Owl & Co’s Vertical Index, which tracks more than 37,000 titles across 14 app libraries and updates daily.