Less than a year after launching a microdrama studio and platform in partnership with ex-ABC exec Lloyd Braun‘s venture firm Banyan, Cineverse has pulled back from the business.
During the company’s fiscal fourth-quarter earnings call Friday, CFO Sean McCabe said Cineverse had shifted from 50-50 joint venture partner to passive minority stakeholder. McCabe said Twist, as the new entity is known, is “creating traction already with Paramount and other potential partners,” he said. Cineverse executives still “believe in this space and intend to stay involved commercially because the growth and potential there are real,” McCabe added.
In August 2025, Cineverse announced the team-up with Braun, the former ABC entertainment chairman known for fostering hits like Lost. It also revealed that pedigreed TV industry execs Susan Rovner and Janet Winograde were coming aboard in senior exec roles.
The venture was motivated by the dramatic growth of microdramas, which are estimated by industry analyst Omdia to have generated $11 billion in revenue in 2025. The firm sees the global market topping $14 billion by the end of this year and $20 billion by 2030. NBCUniversal, Fox and TelevisaUnivision are among many established companies stepping up their investments.
Asked about the retreat during a conference call with Wall Street analysts, CEO Chris McGurk said the company revised its thinking after seeing a “huge level of investment” in the overall market. Established players in Asia, where the market first showed its potential, are “spending like $1 million a day to market their platforms and their channels,” the exec said. Plus, he added, “You’ve seen a lot of the big Hollywood players get involved. And I just think our gut feeling at the end of the day was that we should be selling picks and shovels to that business, versus getting involved in an arms race in that business and spending at the levels that the competitors are spending.”
The company, whose market value is $67 million, focuses on a range of streaming, distribution and advertising operations. It has steadily ramped up its specialty film capabilities, an evolution illustrated by the 2024 release of Terrifier 3, a low-budget horror sequel that took in more than $90 million at the global box office. The Cineverse management team felt it needed to limit its financial exposure on the microdrama front, especially given the acquisitions of Giant Worldwide and IndiCue during the quarter, McGurk added.
Citing those acquisitions, Cineverse said its revenue zoomed 67% in the quarter compared with the year-ago period, hitting $26 million. Net income rose to 5 cents a share from 4 cents in the prior-year quarter.
Shares in the company jumped almost 18% to $3.15 Friday, their highest level in eight months, after the financial results.
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