Advertising set to reshape India’s micro-drama business as AVOD gains ground: Redseer

India’s micro-drama market could grow to Rs 23,500–25,500 crore by FY32 from around Rs 2,300 crore in FY26, with advertising video-on-demand (AVOD) emerging as a new monetisation channel alongside subscriptions, according to Redseer Strategy Consultants.

Redseer estimates that the market will reach around Rs 4,600 crore in FY27. While subscriptions currently account for about 99% of micro-drama revenue, advertising is expected to gain ground as platforms seek to bring a wider audience into the category through free, ad-supported access.

Advertising revenue from micro-dramas could rise from around Rs 24 crore in FY26 to an estimated Rs 210 crore in FY27 and reach Rs 5,000–5,500 crore by FY32, Redseer said.


The opportunity could significantly expand the addressable audience for the format. Redseer estimates that AVOD daily active users could grow nearly eight-fold to 140–150 million by FY32.

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The current micro-drama audience remains heavily skewed towards paying users. Around 15–17 million users paid monthly for micro-drama in FY26, while about 40 million users paid for the format at least once during the year, according to Redseer.

The broader addressable pool for paid digital content in India is estimated at 250–280 million users, suggesting headroom for platforms to bring non-paying consumers into the micro-drama ecosystem.

More than 65% of surveyed consumers expressed interest in an ad-supported micro-drama experience. This, Redseer said, presents an opportunity for AVOD to lower the barrier to accessing the format, while subscriptions and episodic payments continue to cater to consumers with a higher willingness to pay.

“Micro-drama has already proven that consumers are willing to pay for the format. The bigger opportunity now is to monetise the much larger audience beyond the paid subscriber base. AVOD can lower the barrier to consuming the format, and bring more users into the category, while subscriptions and episodic payments can continue to monetise viewers with a higher willingness to pay. A diversified monetisation model can cater to different consumer preferences, bringing more users into the category through ad-supported model, while continuing to monetise high-intent viewers through subscriptions and episodic payment,” said Mukesh Kumar, Associate Partner, Redseer Strategy Consultants.

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Subscriptions accounted for around 99% of the micro-drama market in FY26. Their share is expected to fall to around 95% in FY27E, as advertising reaches close to 5%, Redseer said.

The firm said the consumption characteristics of micro-dramas could support advertising-led monetisation as the category scales. Viewing typically takes place in short, frequent and often unplanned sessions, while serialised narratives and cliffhangers encourage viewers to return and continue watching.

The combination of a growing user base and higher viewing frequency could create a larger pool of advertising inventory, opening up advertising as an additional revenue stream for platforms.

Platforms could introduce advertising at different points in the viewing journey, including through rewarded ads and content unlocks. At the same time, an ad-free subscription proposition could continue to cater to users who place a higher value on uninterrupted viewing.

Redseer said a diversified monetisation model could allow platforms to serve different consumer preferences—using advertising to expand reach while continuing to monetise high-intent users through subscriptions and episodic payments.

The expansion of the audience, however, will need to be matched by greater content breadth and depth, Redseer said.

The short-form structure of micro-dramas, faster production cycles and ability to scale across vernacular languages could allow platforms to refresh their catalogues more frequently and reach audiences beyond the category's early adopters.

Generative AI could further improve production economics by supporting scripting, localisation, post-production, recommendations and marketing, according to the firm. Faster and more cost-efficient production could enable platforms to build deeper content libraries and increase release frequency—both important for sustaining an ad-supported audience at scale.

The shift towards AVOD will also require platforms to build advertising infrastructure, measurement and programmatic capabilities. Studios, meanwhile, will need to develop content suited to both paying and ad-supported audiences, while advertisers will need creative designed for short, narrative-led viewing.

India’s micro-drama market has already demonstrated that consumers are willing to pay for the format. The next phase, Redseer said, will depend on bringing a much larger pool of viewers beyond the existing paying base into the monetisation funnel.