Meta, ByteDance and YouTube Dominate 94% of $150 B Global Vertical Video Market

Owl & Co released its first Vertical Economy Report, valuing the vertical video ecosystem outside China at $150 billion for 2026, a 42% jump from the previous year. Advertising accounts for $131 billion of that total, with the remaining revenue split between consumer payments ($10 billion) and shopping take rates ($9 billion). The analysis finds that Meta, ByteDance and YouTube together capture 94% of the market, leaving a tiny slice for the roughly 2,000 micro-drama apps that together generate about $4 billion.

These apps devote up to 73% of revenue to user acquisition and platform fees, a cost structure far higher than traditional TV production. Although AI-generated titles have boosted the number of releases by 25% in Q2 2026, overall viewing time dropped 4%, indicating that cheaper production does not automatically create demand. New entrants like Peacock, ViX, JioHotstar and Character.ai are experimenting with vertical formats, often relying on pre-existing audience ties rather than pure acquisition. The report also highlights Meta’s projected $68 billion vertical revenue, surpassing Netflix’s total earnings, underscoring that audience acquisition, not production cost, remains the key constraint in this space.