business model

SUNNYVALE, Calif. — A young woman is desperate to raise $50,000 for her mom’s life-saving medical treatment. She will get the money, but only if she agrees to her stepsister’s unusual proposal: to marry her wayward fiance, who comes from a wealthy family but also has a rap sheet.

That’s the plot line for an episode of “The Double Life of My Billionaire Husband.”

That may sound like a telenovela. In fact, it’s a popular series that appears on ReelShort, an app where audiences can view on their smartphones over-the-top, dramatic tales reminiscent of soap operas called micro dramas.

Unlike a regular TV show, this drama unfolds over 60 episodes, each lasting one to three minutes. After six episodes, viewers hit the paywall, where they could continue watching ad-free with a $20 weekly subscription, watch ads or pay as they go.

Already, the series has garnered more than 494 million views since it launched in 2022 and ReelShort says it has made more than $4 million from the show.

With titles like “The Billionaire Sex Addict and His Therapist,” “How to Tame a Silver Fox” and “Pregnant by My Ex’s Dad,” micro dramas lean heavily into sensationalism and light on budgets, which are typically less than $300,000 per series. And many of them are filmed in Los Angeles.

Director and co-writer Cate Fogarty watches actor Diego Escobar on dual vertical monitors. The film, by platform DramaShorts, is shot vertically to be adapted for viewing on a phone screen.

(Juliana Yamada/Los Angeles Times)

Short serialized dramas first took off in China, where they are hugely popular and generated revenues of $6.9 billion last year, even surpassing domestic box office sales, according to DataEye, a Shenzhen-based digital research firm.

Now, Hollywood is starting to take note of the bite-sized format.

In August, the venture arm for Lloyd Braun — the former ABC executive and chairman of talent agency WME — and L.A.-based entertainment studio Cineverse formed a joint venture called MicroCo to build a platform for micro dramas.

“Traditional Hollywood moved away from a whole genre and storytelling that fans love, and I think micro dramas really took advantage of that and really leaned into that fandom,” said Susan Rovner, chief content officer of MicroCo.

Studio interest

Major studios are investing in micro dramas in an attempt to replicate China’s success and find new ways to appeal to younger audiences that are accustomed to watching short-form videos on TikTok, YouTube, Instagram and other platforms while on the go.

Fox Entertainment recently announced an equity stake in Ukraine-based Holywater, a producer of micro dramas. Under the deal, Fox Entertainment Studios (a division of Fox Entertainment) will produce more than 200 vertical video titles over the next two years for Holywater.

And Walt Disney Co.’s accelerator program, which invests in startups, recently named micro drama business DramaBox, whose parent company is based in Singapore, as part of its 2025 class.

David Min, Walt Disney Co.’s vice president of innovation, said he believes micro dramas will continue to do well, especially with younger audiences accustomed to watching entertainment on their phones.

“We have to be where everyone is consuming their content, so that’s an opportunity for us,” Min said in an interview. “…This is just another new platform to experiment with and explore and see if it’s right for the company.”

First assistant director Chakameh Marandi, left, and actress Leah Eckardt wait during filming at Heritage Props last month in Burbank.

(Juliana Yamada/Los Angeles Times)

This year, ReelShort, which is based in Sunnyvale, Calif., says it will produce more than 400 shows, up from 150 last year.

All of the productions are filmed in the U.S. and mostly in Los Angeles, said ReelShort CEO Joey Jia in an interview. The company plans to build a studio in Culver City that will adapt its most popular micro dramas into films.

“We offer a lot of opportunity,” Jia said.

Warsaw-based DramaShorts said in 2026 it aims to shoot 120 micro drama projects in the U.S., up from 45 to 50 this year. About 25% of those will be in the L.A. area.

DramaShorts co-founder Leo Ovdiienko says, “People are so used to consume content through social media, through TikTok, through Instagram, through Facebook and to share information.” .

(Juliana Yamada/Los Angeles Times)

“People are so used to consume content through social media, through TikTok, through Instagram, through Facebook and to share information,” said DramaShorts co-founder and Chief Operating Officer Leo Ovdiienko, 29, in an interview. “I believe it’s only a matter of time before the big players will also come to this stage.”

The company works with production partners in L.A. who employ actors, writers and crew members who work on the quick-turn projects, a bright spot in a struggling job market.

“The plus side of filming in L.A. is it is the epicenter of Hollywood,” said executive producer, writer and director Chrissie De Guzman, who has worked on DramaShorts projects. “We know how the state of our industry is doing right now, so a lot of talent have moved into the vertical space.”

Though vertical dramas are the length of a movie, they are spliced up into small chapters and produced quickly. A 100-page script might be shot in just one week as opposed to a month for a feature film.

Each chapter usually features a cliffhanger or dramatic moment — whether that’s a slap or a character in danger.

“It just hits every little emotional point,” said Caroline Ingeborn, chief operating officer at Palo Alto-based Luma AI, which provides micro drama companies with AI tools. “It hooks you in like this and because it’s so easy to press [Play]. You just need to see the next episode.”

The crew of vertical film “Sleeping Princess” break between scenes.

(Juliana Yamada/Los Angeles Times)

Labor tensions

With ultra-low budgets, many of the productions are non-union, prompting some writers and actors to work under pseudonyms to avoid facing sanctions from their unions, said several people who work on the shows.

In an effort to address the issue, performers union SAG-AFTRA recently announced it has created agreements that cover low-budget vertical dramas.

Writers Guild of America West President Michele Mulroney said in an interview the union is aware that “there are companies that are trying to do this work non-union, so the guild wants to help our members … in ways that they can work on verticals and make sure they get that work covered.”

Micro drama producers said they welcome talking with the unions, but questioned whether their business models could support union contracts.

“We’re not anti-union at all,” said Erik Heintz, executive producer at Snow Story Productions, which makes vertical dramas for platforms including DramaShorts.

Despite labor tensions, these short-form dramas have provided a key source of employment for Hollywood workers who’ve struggled to find jobs as production has moved out of California.

Corey Gibbons, 44, a director of photography, said vertical dramas kept him in the business when other work dried up.

“I have a feeling that we’re on the brink of something that’s really going to change,” Gibbons said. “I’m just excited to be a part of it.”

So was 27-year-old actor Sam Nejad, a former contestant on “The Bachelorette” who started acting in vertical dramas in January. He said he’s landed one or two lead roles a month since then and can earn $10,000 a week.

“It’s a new art,” Nejad said. “The new Tarantinos, the new Scorseses are all coming through this.”

ReelShort’s office in Sunnyvale looks more like a typical Silicon Valley startup than a Hollywood studio.

Jia, the chief executive, sits at a desk in an open floor seating area with his staff. Along the office walls are framed posters with titles like “Prince With Benefits,” “Never Divorce a Secret Billionaire Heiress” and “All the Wrong Reasons.” Jia proudly points out why each program was notable on a recent tour of the space.

“I don’t have money to hire celebrities,” Jia said. “I have 100% rely on story.”

The 46-year-old entrepreneur, who has an electrical engineering background, launched his business in 2022. At the time, there wasn’t much interest from Hollywood studios.

The skepticism followed the high-profile collapse of Quibi, the startup led by studio mogul Jeffrey Katzenberg and tech executive Meg Whitman, that worked with A-list movie stars on series that would appear on an app in short chapters. Quibi raised $1.75 billion, only to shut down roughly six months after launching.

Jia took a different approach. Rather than signing expensive deals with celebrities, he hired students or recent graduates from colleges like USC to work at his company.

Jia approves all of the micro drama stories at ReelShort, which he says is expected to generate $1 billion in revenue this year.

A ReelShort representative declined to disclose the company’s earnings but said the business is profitable.

Jia said ReelShort has 70 million monthly active users, with 10% of them paid users.

The churn — the rate at which customers drop weekly subscriptions — can be more than 50% at ReelShort, Jia said. That makes it paramount for the company to have a steady stream of content that entices customers to keep paying. Currently it has more than 400 in-house titles and roughly 1,000 licensed titles.

Like others in the genre, ReelShort and DramaShorts rely heavily on data metrics like customer retention and paid subscribers to make their content decisions.

“A lot of directors are thinking, when I shoot the film, ‘I don’t care how people think, this is my creation, it’s my story,’” Jia said. “No, it’s not your story. Your success… should be determined by the people.”

“Sound of Freedom” distributor Angel Studios made its stock market debut Thursday as the company looks to expand its streaming service and eventually penetrate international markets.

The Provo, Utah-based firm is trading on the New York Stock Exchange under the ticker symbol ANGX. Shares of the company rose 8% to $13.

Angel Studios’ launch on the public market is the latest step in the company’s unconventional journey into the entertainment business.

Founded by brothers Neal, Daniel, Jeffrey and Jordan Harmon, the company began as VidAngel, a service that allowed viewers to sanitize Hollywood movies by erasing sex, violence and swear words. But in 2016, VidAngel was sued for copyright infringement by Walt Disney Co. and Warner Bros., who said the company’s business model — which involved purchasing thousands of DVDs and Blu-ray discs and allowing users to stream them online — was essentially piracy.

VidAngel eventually settled the case, and the Harmon brothers sold off the filtering business. The company rebranded as Angel Studios and kept its content production and crowdfunding operation.

Today, the firm operates a streaming service and releases movies theatrically, including 2023’s massively popular “Sound of Freedom,” which grossed $250 million worldwide, and the animated film “The King of Kings,” which came out in May and tells the story of Jesus. The studio focuses on what it calls “values-based storytelling,” and its slate is determined through the vote of its 1.5 million Angel Guild members, who also get free movie tickets and other perks.

“It’s really a combination of the values of a broader audience,” said Jordan Harmon, president. “If you look at movies like ‘The Sound of Music,’ or ‘Casablanca’ or ‘12 Angry Men,’ all those were broad, incredible stories that touched the lives of tens, if not hundreds, of millions of people. Those are the type of stories that we think fall right into this values-driven, light-amplifying mission.”

Though considered small for Hollywood, Angel Studios moved to become a publicly traded company because its nearly 70,000 investors required it to, said company Chief Executive Neal Harmon. The company merged with a special purpose acquisition company (or SPAC) called Southport Acquisition Corp. to go public. A SPAC is essentially a shell company that exists solely to buy a private company and take it public without the scrutiny of a traditional IPO.

“We’re turning the way that this industry works on its head,” he said. “And because we are not doing the traditional Hollywood gatekeeper thing, we also needed to access capital in an untraditional way.”

The path is far from the potato farm in Idaho where the brothers grew up, and where the nearest neighbor was a quarter-mile away. Working together on the farm — and sharing a bedroom for years — helped foster the communication and bond between the brothers, said Jeff Harmon, chief content officer.

“If you look in Hollywood, the best partnerships have all been brothers,” he said, ticking off several successful movie business sibling partnerships including the Disneys, Warners and Nolans. “When they actually work together really well, it becomes unstoppable.”

Back in the worst pandemic days of 2020, Elizabeth Garo and Melanie Tusquellas were terrified they would lose their nightclub.

The co-owners of the Alibi — an independent music venue with space for up to 300 people in downtown Palm Springs — opened in late 2019, just before COVID-19 shut down the live music scene.

Garo was a former booker for the Regent, Echo and Echoplex in L.A. (She also opened Stories Books in Echo Park.) Tusquellas was a hospitality veteran behind Los Feliz’s El Chavo and Silver Lake’s historic Edendale restaurant. The two said they had invested hundreds of thousands into renovating and opening the Alibi.

“It’s difficult to run a small independent venue any time, and during COVID it was particularly hard,” Garo recalled in an interview. “A lot of them didn’t make it.”

Garo heard that Marc Geiger, then a WME music executive she had known and worked with for decades, and former WME board member John Fogelman had founded Save Live, a company investing in independent venues to help them survive the pandemic.

When Save Live offered to buy 51% of the Alibi and let the co-founders continue to run it, the deal “felt like such a relief,” Garo said. “It felt like a lifeline, like, ’Hey, we’re gonna make it.’”

Instead, Garo and Tusquellas claim in a 2023 lawsuit and an interview with The Times that the partnership ruined them. Their lawsuit, which seeks compensatory damages, alleges that Geiger and Fogelman negotiated the deal in bad faith, forcing them out of the company’s operations soon after the purchase. After briefly reopening in 2022, the club permanently closed later that year. A trial is set for August.

Attorneys for Save Live, which has since rebranded as Gate 52, declined to comment when reached by email.

In a cross-complaint to the suit, Geiger and Fogelman say Save Live “bent over backwards to try to resolve the parties’ differences” and call Garo and Tusquellas’ claims “salacious — and utterly false — allegations of misogyny and bad faith.”

The suit raises questions about the future of local indie music venues like the Alibi and about Save Live’s intentions. Does the firm rescue troubled venues or capitalize on their financial vulnerability?

Gate 52 now owns 13 music venues across the country, including Electric City in Buffalo, N.Y., the Eagles Ballroom in Milwaukee and the Criterion in Oklahoma City. In California, the firm owns the Fremont Theater in San Luis Obispo and the Golden State Theatre in Monterey, and collaborates with dozens more “network venues” across the country.

The firm is a far cry from giants like Live Nation or AEG. But as a well-capitalized operation that has acquired majority stakes in struggling small venues, it has become a significant player in secondary markets.

The two-story, Spanish colonial-style building that would become the Alibi first opened as a switchboard hub for the GE Telephone Co. in the 1920s. Later, it became Georgie’s Alibi Azul, a popular gay bar and restaurant.

In 2018, Garo and Tusquellas, both wisecracking Gen X veterans of L.A. nightlife, were looking for “a swan song” for their careers, as Tusquellas described it. Garo, one of the most influential talent bookers in L.A. for decades, had been laid off from Live Nation after the mega-promoter bought local promoter Spaceland Presents.

After touring the Alibi, Garo and Tusquellas saw potential for a venue like the ones they’d built in L.A., a place to book local and global artists in a creatively adapted old building.

“We were surprised by how chic and international Palm Springs was becoming,” Tusquellas added. “Growing up in L.A., when we went to Palm Springs as kids, it was like God’s waiting room. But we were quite surprised by this scene with all these local musicians but no venues to play at.”

Alibi soft-launched with packed Pride events in fall 2019 (to avoid the summer heat), and formally opened in October. With its glazed-tile outdoor bar and emerald-hued mood lighting, the venue was a chic standout in desert nightlife.

“We had everything from ‘Dynasty’ theme parties to Modernism Week events,” Tusquellas said. “We had a goth night. There had never been a place to go for them in Palm Springs and they came out of the woodwork.”

Local musicians hoped the venue would be transformative for their scene.

“Alibi was the first place where we got a taste of the real deal,” said Spencer Stange of the band Host Family, which booked a monthly night of experimental music at Alibi. “It was the only venue I knew there that was legitimate and professional. Good bands played there and you could do a real sound check. They were so hospitable, it felt like a home base.”

Louise Minnick, a local promoter with Lesbo Expo, said Alibi was an important venue for queer women in the desert.

“Liz and Melanie went out of their way to make our events special,” Minnick said. “They offered their patio for women to have first access to watch Pride, which meant a lot to me.”

Five months later, the pandemic annihilated those plans.

Garo and Tusquellas said their company, 369 Palm Inc., was too new to access the federal patchwork of Paycheck Protection Program loans. They eventually got a grant from the National Independent Venue Assn., but it was for only $20,000. According to a slide deck cited in Save Live’s cross-complaint, the venue had $250,000 in outstanding bills from the shutdown.

“We used all our savings to pay the rent,” Tusquellas added. “We’re entrepreneurs who are not funded by big people, so we had to pay the $15,000 a month rent ourselves for a year and a half. It was really hard.”

Meanwhile, Save Live launched in 2020 with $135 million raised from venture capital firms and a clear mission: to buy majority stakes in small clubs.

“Save Live’s business model was to invest in local, independent, ‘mom and pop’ live music venues, providing critically needed financial relief and funds to renovate dated facilities to bring them back stronger than ever before,” the company says in its cross-complaint.

Save Live’s founders were well-known in L.A. entertainment. Geiger co-founded the Lollapalooza festival and led WME’s music division from 2003 until 2020. Fogelman was the former head of motion pictures at William Morris Agency and a founding board member when it merged with Endeavor to become WME. The Alibi was one of Save Live’s first venue deals.

“Being able to partner with Save Live is a dream come true,” Garo said in a 2021 announcement. The deal let the two owners “stay true to our roots knowing we have their full support. … It doesn’t hurt that we’ve known some of the people at Save Live for years — we all came up through the business together.”

“I didn’t know Marc at all, but he was very charming,” Tusquellas said. “He and Fogelman were titans of the industry. We felt that we were in very good hands. We knew what we were doing, and they knew that.”

According to the suit and cross-complaint, Garo and Tusquellas’ company, 369 Palm Inc. (with partner David Gold), agreed to sell 51% of their ownership of the Alibi’s business to Save Live for $400,000. The Alibi’s business would be co-owned under a new company, Alibi Venue Operations LLC. Garo and Tusquellas say in their suit that, under this agreement, the pair and Geiger “would have decision-making authority over the day-to-day operations.”

Garo and Tusquellas claim in their suit that 369 Palm “retained 100% ownership of [the Alibi’s] ABC liquor license” and would continue to manage the venue’s bar. Save Live agreed to provide $565,000 for renovations and expenses, according to Save Live’s cross-complaint.

Garo and Tusquellas’ suit claims that Save Live had “hatched a plan to exploit the weakness in the independent live music industry to try, by means of deception and then intimidation, to acquire The Alibi and its business without paying a fair price.”

Scott Timberlake, the Alibi building’s landlord, said he had a friendly relationship with Garo and Tusquellas. But once Save Live got involved, he said, “I was really surprised by Save Live’s ego and entitlement. When I asked to see their financial statements before taking over the lease, they lectured me about ‘Don’t you know who we are?’”

Garo and Tusquellas say in their suit that, when the venue reopened on April 1, 2022, “SL Alibi acted as if it were the sole owner.” They claim in their suit that Geiger and Fogelman contracted with an outside ticketing company, Tixr, without Garo’s consent, and that Save Live didn’t sufficiently fund day-to-day operations. Garo and Tusquellas claim in their suit that Save Live switched to its own accountant for bookkeeping and backed out of a plan to hire a general manager.

In its cross-complaint, Save Live says that “contrary to the claims in their lawsuit, Save Live did not try to take over the Venue.” Save Live says “Tusquellas and Garo had gone significantly over the pre-opening budget, resulting in … an operating budget shortfall.”

According to Save Live’s cross-complaint, private investigators discovered “a separate, undisclosed cash register used only for cash transactions … there was no record, whatsoever, of any such sales.” The cross-complaint alleges that Tusquellas “embezzled most of (if not all) of the cash sale proceeds.”

Tusquellas denied the embezzlement claims, saying all sales, including cash, were accounted for and reported as income.

Save Live says in its cross-complaint that both parties “always understood and intended for 369 to transfer” the venue’s valuable liquor license, and called Garo and Tusquellas’ refusal to do so “a ruse to get Save Live’s money.”

Garo and Tusquellas said they never sold, or intended to sell, the venue’s liquor license. “That may have been part of Save Live’s secret plan,” said 369 Palm’s lawyer, David Sergenian. “But that was never agreed to.”

On July 13, 2022, Garo and Tusquellas’ lawsuit says “Geiger and Fogelman called a meeting of the Board … as a pretense to ambush Tusquellas and Garo with false accusations. Geiger and Fogelman…falsely accus[ed] Tusquellas of embezzling funds from the company to enrich herself.”

“Fogelman aggressively threw a chair to the ground, as he raged,” the suit says. “Tusquellas and Garo were appalled by Fogelman’s shocking behavior and scared for their future, as he was threatening to ruin the business by shutting down The Alibi.”

Garo and Tusquellas’ suit claims Geiger and Fogelman ordered the venue shut down and that Garo and Tusquellas be removed from operations with their salaries cut off. The bar staff would be fired and 369 Palm’s concessionaire agreement canceled, according to the suit.

The Alibi closed on July 25, 2022. It never reopened.

The situation at the Alibi echoes the tumult surrounding the ownership of the beloved Pioneertown venue Pappy & Harriet’s. Starting in 2021, Knitting Factory Chief Executive Morgan Margolis and partners Stephen Hendel and John Chapman battled the venue’s co-partners, Joseph Moresco and Lisa Elin, about who controlled the operations at the rustic venue, where acts as big as Paul McCartney and Robert Plant have played in addition to hardscrabble desert locals. Margolis prevailed in late 2024.

Meanwhile, the new Acrisure Arena, built by mega-manager Irving Azoff and former AEG President Tim Leiweke, attracts A-list pop, rock and Latin acts to Palm Springs. The nearby Yaamava’ resort has spent millions on top talent.

“It’s great to have an influx of money and big artists at venues like Acrisure Arena that helps the Valley feel bigger. But losing small venues is detrimental and cuts away at the uniqueness of the experiences people have here,” said Kristen Dolan, executive director of the California Desert Arts Council, a nonprofit group advocating for cultural development in the Coachella Valley.

“Places like Alibi have a bigger impact than people think. The workforce here is largely in hospitality, and clubs like the Alibi are important places to start out,” Dolan said. “People were really upset when the Alibi closed, and it was heartbreaking for artists cultivating their community. The economy here is unstable right now and I hope we don’t lose more small venues like it.”

Former Alibi owners Liz Garo, left, and Melanie Tusquellas at Silver Lake’s Edendale restaurant.

(Annie Noelker / For The Times)

The post-pandemic future for such independent live venues is unsettled. Nonprofits like NIVA were effective advocates for legislation (like the $16.25 billion Shuttered Venue Operators Grant, a federal program that gave money to struggling venues) and fundraising, and concert attendance boomed once venues reopened. But inflation, reduced tourism and a volatile economy threaten to keep fans home.

“What word describes our situation right now? I would offer that one word is ‘unknown,” NIVA’s executive director Stephen Parker said at the group’s 2024 conference. “Forty years ago, independent stages were the norm, now multinational, publicly traded conglomerates are. Everyone in this room knows that competition is a misnomer and the increasing lack of it is, perhaps, our greatest threat.”

Meanwhile, Garo and Tusquellas have returned to L.A., picking up the pieces at an unexpectedly late phase of their careers. Garo will book shows at a new independent Yucca Valley venue, Mojave Gold.

Building owner Timberlake said that after months of fighting with Save Live over the venue’s debts, he accepted a settlement, and a new restaurant tenant has moved into the Alibi.

“I didn’t have the financial capability of fighting someone like Save Live,” he said. “It was just so unnecessarily negative.”

No matter how the August trial ends, Garo and Tusquellas are facing the same headwinds as the rest of the live industry. Only now, they are truly on their own.

“I have lots of ideas,” Garo said. “But that’s all kind of locked up until we get this resolved. I don’t want this to be my final chapter.”