India, July 10 -- China's entertainment industry is witnessing a dramatic shift, and it isn't happening inside movie theatres. Instead, it's unfolding on smartphones through vertical micro-dramas, also known as duanju. These bite-sized shows, made up of episodes that often last less than two minutes, have become one of the country's biggest entertainment success stories. They have exploded into a billion-dollar business, and their success is now influencing entertainment markets from India and South Korea to the United States.

Just a few years ago, few believed vertical dramas could become a serious business. According to the South China Morning Post, the industry was worth only 1 billion yuan (around $148 million) in 2020. Fast forward ...