Technology
Chinese producers flood market with cheap, AI-generated short dramas
Producers are using a "fail-fast" model, testing low-cost vertical dramas on audiences before committing to rising distribution expenses.
The short version
- Chinese media producers are leveraging generative AI to release a massive volume of vertical short dramas, testing audience reaction before investing heavily in promotion.
- While production costs remain low, rising audience-acquisition costs are squeezing profit margins, and the vast majority of titles fail to return a profit.
- The market for these microdramas grew to an estimated 100 billion yuan ($15 billion) in 2025, surpassing long-form video in average daily usage.
Key facts
- According to China's Netcasting Services Association (CNSA), approximately 128,000 short dramas were released in China in the first quarter of 2026, with over 95% generated using AI.[CNBC]
- The CNSA estimated the Chinese microdrama and manju market at about 100 billion yuan (US$15 billion) in 2025.[CNBC]
- According to market expert Ashley Dudarenok, the cost of purchasing 1,000 promotional ad impressions rose from 50–80 yuan in 2023 to 150–200 yuan in 2025, occasionally exceeding 300 yuan during highly competitive periods.[CNBC]
- The animated short film 'Niu Lai' grossed 45.5 million yuan ($6.76 million) over three weeks despite an unofficial production budget estimate of just $200, finding success only after viewers actively sought it out due to its poor quality.[CNBC]
What remains uncertain
- Industry analysts are divided on whether agile, specialized short-drama startups or established streaming incumbents like Netflix hold the stronger long-term distribution advantage.[CNBC]