MUMBAI, Jan 22, 2026, 16:29 IST
- Microdrama and AI apps drove a surge in India’s app downloads and user engagement in 2025, according to industry data.
- India’s leading FMCG advertisers are experimenting with sponsorships and product placement, though they admit measuring effectiveness remains challenging.
- Investors are backing vertical video series, sparking the launch of new microdrama studios and apps across Europe and the U.S.
India’s app downloads bounced back in 2025, with microdrama apps playing a major role, according to a Sensor Tower report. The country saw 25.5 billion downloads last year, up from 24.6 billion in 2024, while total time spent in apps climbed to 1.23 trillion hours. Downloads of short-drama apps alone surged by over 350 million. (TechCrunch)
Microdramas are short, scripted stories broken into vertical episodes designed for phones, each lasting 60 to 90 seconds. They’re inexpensive to produce, quick to release, and optimized for swiping—exactly why streaming services, studios, and marketers are jumping on board.
India’s top advertisers, particularly FMCG brands in packaged food and personal care, are showing genuine but cautious interest. Angel investor and independent director Lloyd Mathias said microdramas have hit an “inflection” point, highlighting platforms like Pocket TV alongside foreign apps DramaBox and ReelShort. Still, many brands remain in a “wait-and-watch mode,” concerned about ad clutter and poor measurement. Mathias also noted JioStar’s plan to launch a dedicated microdrama vertical in the first quarter. (Storyboard18)
Vertical-video studios outside India are expanding microdramas beyond their Asian roots, with new apps and creators cropping up in places like Israel, the UK, and Germany, Deadline reported. Holywater co-founder Bogdan Nesvit pointed to “huge synergies” with Hollywood. Meanwhile, AppReel co-CEO Osher Assouline described his app’s battle for user attention against giants like TikTok and mobile games such as “Candy Crush.” (Yahoo)
Investors are putting money down. Holywater announced earlier this month that it closed a $22 million financing round led by Horizon Capital, with Endeavor Catalyst and Wheelhouse also participating. The company called it the largest confirmed funding round outside Asia for this category. In October, Fox Entertainment invested and plans to produce over 200 vertical titles for Holywater’s apps in the next two years, the company said. (Business Wire)
Money is pouring into a market that’s beginning to reflect in revenue figures. Microdramas pulled in an estimated $3 billion worldwide in 2025, excluding China — almost three times the amount from the previous year. The U.S. led the pack, raking in $1.3 billion, Axios reported, referencing data from consulting firm Owl & Co. (Axios)
Wheelhouse CEO Brent Montgomery, whose company backed Holywater, said the “creator economy is still in its infancy.” He pointed out that audiences, not old-school gatekeepers, are now calling the shots on what turns into the next profitable hit. (Substack)
The wider mobile landscape sheds light on the frenzy. Sensor Tower’s annual “State of Mobile 2026” report revealed that in 2025, consumers spent more on apps than on games for the first time. It also highlighted AI assistants and short dramas as the fastest-growing app categories, with DramaBox topping the list of most downloaded video streaming apps. (9to5Mac)
However, the advertising model remains a sticking point. Media planners fear that interruptive ads within a 60-second episode could irritate viewers. Meanwhile, many FMCG marketers claim they still don’t have the audience and sales attribution data needed to back up big spends on TV and major digital video buys.
The alternative is a smaller, safer approach: sponsor a series, weave the product into the storyline, or create a branded micro-series and hope it catches on. The real question is if this remains a niche strategy or turns into a budget line that’s tough to drop once the next vertical video surge hits mainstream.
