Meta's Reels hit a $50 billion annual revenue run rate in Q3 2025. That's as much as Netflix. Just Reels. Just the short vertical videos you see between posts on Instagram and Facebook.
Let that land for a second.
A format that didn't exist five years ago is now generating Netflix-level revenue, and it's not even the whole story. Micro-drama apps like ReelShort and DramaBox collectively pulled in nearly $3 billion in 2025 — up 115% year over year — making short drama one of the fastest-growing app categories Sensor Tower has ever measured. Netflix, Disney+, Paramount+, and Peacock have all launched or announced vertical video feeds in the last six months. TikTok is commissioning original scripted series. Fox took an equity stake in a vertical drama platform and committed to producing 200 titles. Peacock is running vertical NBA broadcasts — produced live, natively, for a phone held upright.
This is not a trend piece about kids and their phones. This is a hundred-billion-dollar restructuring of how video gets made, distributed, and monetized. And it has enormous implications for anyone sitting on intellectual property.
A Third Audiovisual Language
Hernán López, the former Fox executive and founder of Owl & Company, has a framing for this that's worth internalizing. He argues that vertical video isn't a subcategory of television or a variant of social media clips. It's a third audiovisual language — distinct from film, distinct from TV — with its own aesthetics, its own talent systems, its own business models, and its own economics.
The analogy he uses is a good one: if you were watching soap operas in the late 1940s, you probably wouldn't have imagined that the same box would eventually give you the Super Bowl, Game of Thrones, and South Park. Soap operas were just the first genre. Television was the language. Micro dramas are the soap operas of vertical. The language itself is just getting started.
And the data backs this up. ReelShort users in the US spend an average of 35.7 minutes per day in the app — more than Netflix mobile, more than Prime Video, more than Disney+. In Q4 2025, micro-drama apps drove 733 million global downloads versus 658 million for long-form streamers. The audience isn't sampling vertical video. They're living in it.
The Economics Are Completely Different (And That's the Point)
Here's where this gets really interesting for IP holders — and not just the ones with manga libraries.
The traditional adaptation model requires enormous budgets. A single season of a prestige streaming show costs tens of millions of dollars and takes years to produce. That cost structure means only a tiny fraction of IP ever gets the greenlight. The economics are built for blockbuster bets, not catalog depth.
Vertical flips this entirely. Production costs are a fraction of traditional TV. ReelShort is aiming to produce 400 shows in 2026. Fox committed to 200 vertical titles in a single deal. These aren't decade-long development slogs — they're fast, efficient productions that can take a piece of IP from concept to audience in weeks or months, not years.
And the content doesn't need to look like a Marvel movie to work. That's the critical insight. Audiences consuming vertical video don't expect — and frankly don't want — the same production values as a $200 million feature film. They want compelling stories, well-told, in a format that fits the way they actually use their phone. Snackable. Bingeable. Five to eight minutes at a time, built on hooks and cliffhangers.
This means IP that could never justify a traditional adaptation budget suddenly becomes viable. A comic series with a devoted but modest readership. A novel with a great premise that no studio would option. A game with rich lore and characters. A creator's original concept that doesn't fit neatly into a network pitch. All of this IP — the vast middle tier that the traditional system systematically ignores — now has a format and an economic model that can actually bring it to life.
Not Just Manga (But Also Manga)
The IP that's most obviously positioned for this moment is serialized visual content — webtoons, manga, vertical scroll comics. These formats were literally designed for vertical, mobile-first consumption. The character designs exist, the story arcs are built for episodic cliffhangers, and the visual language maps almost directly to what vertical video audiences respond to. Adding voice, animation, and sound design to these properties is a shorter leap than almost any other form of adaptation.
But the opportunity is much broader than that. Vertical video as a format is hungry for any IP that can deliver compelling, serialized narrative in short bursts. Book series. Podcast universes. Game worlds. Original creator concepts. The format doesn't care where the story came from — it cares whether it hooks you in the first 15 seconds and makes you desperate for the next episode.
This is a fundamentally new way to build IP, too. Not just to adapt existing properties but to originate stories in a format that's cheaper to produce, faster to market, and — here's the kicker — potentially reaching more engaged audiences than traditional TV. When your viewers are spending 35 minutes a day in the app and paying per episode, you've got an engagement loop that most streaming services would kill for.
The Window Is Open, But Not Forever
Every major platform is now either building or buying their way into vertical video. Netflix launched Clips. Disney+ launched Verts. Paramount+ has a short-form feed. TikTok is commissioning originals. The infrastructure is being built in real time.
But here's what López pointed out that resonated: we're at the stage where most of the "firsts" haven't happened yet. The first great vertical sitcom. The first vertical mockumentary. The first breakout animated vertical series adapted from a comic. The first vertical franchise that spins up across languages simultaneously. These are all open lanes.
For IP holders, this isn't a question of whether vertical matters. The hundred billion dollars in annual revenue answered that question already. The question is whether you activate your IP in this format while the playing field is still forming — or wait until the economics tighten, the platforms mature, and the early movers have already locked up the best positions.
The phone is vertical. The audience is vertical. The money is vertical. The only question left is whether your IP is, too.