Microdrama apps chase telco bundles as subscription growth lags despite download surge

Mumbai: Microdrama platforms and telecom operators are increasingly exploring partnerships and aggregation models to scale subscriptions as rapid launch of multiple apps in the category leads to growing fragmentation, industry executives said.

While microdrama services have become immensely popular with overall app downloads in India pegged at over 250 million, this surge has not translated proportionately into paid subscriptions, prompting platforms to explore new growth avenues such as telco bundling.

Telecom operators, which have successfully bundled OTT services, are looking to replicate this model for microdrama apps, which could help boost average revenue per user (ARPU) and improve customer retention, executives said.

“Customer additions have slowed (for telcos), so the next focus area will be offering (bundle) services such as OTT, gaming, microdrama and music streaming,” a digital media executive said on the condition of anonymity. “Adding new services will help drive ARPU.”

Microdramas, typically one to two minutes long, are a fast-growing new format that offer a structured alternative to doom-scrolling, using culturally relevant cliff hanger-driven storytelling to keep viewers engaged.

India’s microdrama market is expected to reach $1.5 billion by 2026 and grow at over 31% CAGR to $4.5 billion by 2030, according to Lumikai, a venture capital fund focused on gaming and interactive media.

Microdrama app downloads in India jumped 113% quarter-on-quarter to reach 35 million during January-March 2025, when the country accounted for 11% of global downloads, according to data from mobile app analytics platform Sensor Tower.

EY said growth in the segment will likely be driven by rising adoption in Tier II and Tier III cities, low-cost AI-enabled production, and frictionless payments enabled by UPI AutoPay.

“Microdrama platforms and telecom operators are increasingly looking to collaborate through partnerships and aggregation models to drive subscription growth,” said Nitin Burman, chief revenue officer at Balaji Telefilms, which offers both micro and long-form content on its platform Kuttingg.

Aggregation is expected to reduce subscription fatigue, improve content discovery, and convert high engagement into more predictable revenue streams.

“With a proliferation of paid apps, consumers are unlikely to subscribe to multiple services individually,” Burman noted.

Bundling reduces payment friction and accelerates trials, while aggregation improves discovery and convenience, he said. “However, unlike OTT, microdrama platforms will need to solve for retention and differentiation, as short-form content consumption is inherently fragmented and less habit-forming.”

According to a Meta-Ormax report, only a few microdrama platforms have achieved over 20% awareness. This limited awareness creates a trust deficit around app downloads and payments, emerging as a key barrier to monetisation.

“The telco bundling play by microdrama platforms is essentially a bet to drive distribution. Bundling may get access to new users without specifically asking them to make a new payment decision,” said Salone Sehgal, founder of Lumikai.

However, she warned this strategy is a double-edged sword—while a platform gains reach, it may have to cede pricing power, margins and data ownership.

She noted that platforms having high completion rates, repeat viewing, and genuine content resonance have built independent scale via profitable economics.

“Product-led retention will always be more durable than retention from consumers driven via bundled pricing. Telco partnerships are one way to scale, but not the only one,” Sehgal said.