Meta's Reels is generating as much revenue as Netflix. Microdrama apps pulled in nearly $3 billion last year. Every major streamer just launched a vertical video feed. This is a hundred-billion-dollar restructuring of how video gets made. Here's what it means for anyone sitting on IP.
The scale of what just happened
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.
Microdrama 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.
A format that didn't exist five years ago is now generating Netflix-level revenue. This is a hundred-billion-dollar restructuring of how video gets made, distributed, and monetized.
A third audiovisual language
Hernán López, the former Fox executive and founder of Owl & Company, argues that vertical video is 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 worth sitting with: 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. Microdramas 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, microdrama apps drove 733 million global downloads versus 658 million for long-form streamers.
The economics are completely different. That's the point.
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 are 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. Audiences consuming vertical video 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 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 just 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 - not just to adapt existing properties but to originate stories in a format that's cheaper to produce, faster to market, and 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. 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.
López pointed out something 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, the hundred billion dollars in annual revenue already answered the question of whether vertical matters. The question now 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.