Why are AI short dramas entering an expansion phase?

  • DataEye expects the AI short-drama market to exceed 40 billion yuan in 2026, with more than 600 million users.
  • AI technology has lowered barriers to production, cutting the cost of premium dramas by as much as 90% and driving growth in content supply. As production has become easier, attracting traffic and converting content into revenue have become shared challenges for platforms and content providers.

How are platforms competing for content and creators?

  • Tencent launched WeChat's “Green Bubble Short Dramas,” focusing on advertising monetization, and is building its technology capabilities with support from Tencent Cloud; ByteDance has connected the content chain from Tomato Novel to Hongguo and Douyin, using financial incentives to encourage creation.
  • Kuaishou centers its approach on Kling AI technology and supports creators through incentives for individual dramas and its mass-creation season. Platforms are each building their own ecosystems around production tools, content supply and distribution.

Where do content providers' revenues come from?

  • Liu Zejing of Huaxi Securities believes that platform revenue sharing, hit incentives, script licensing, remakes and IP development are forming a diverse range of income channels; platforms also offer returns through minimum guarantees and incentives.
  • Public information shows that total revenue sharing for TikTok short dramas exceeded 31 million US dollars, while revenue sharing for locally produced AI short dramas grew 55%; licensing revenue shares for more than 30 IP properties each exceeded 10 thousand US dollars.
  • At Hippo Theater, 4 copyright holders each received more than 1 million yuan in revenue shares, while 64 dramas each generated more than 200 thousand yuan in revenue shares. These cases show that content revenue can come from both platform viewing revenue shares and licensing and incentives.

How are competitive priorities changing as the market grows?

  • As production capacity increases and technology becomes more widespread, competition is shifting from simply increasing output to a combination of content quality, cost control, IP reserves and distribution capabilities.
  • Huaxi Securities believes companies with stable production capacity, high-quality IP and established platform partnership mechanisms may achieve more sustainable returns.