Takeaways from a short drama platform expert call: The shortcomings of Al on full display in the short drama business

Research evidence excerpt

Takeaways from a short drama platform expert call: The shortcomings of Al on full display in the short drama business

Global Markets Research

13 July 2026China Internet & New Media

EQUITY: INTERNET & NEW MEDIA

Takeaways from a short drama platform expert call Research Analysts

China Internet & New Media

The shortcomings of AI on full display in the short drama Rachel Guo - NIHK

rachel.guo@nomura.combusiness

+852 2252 1400

Key highlights Jialong Shi - NIHK

The Nomura China internet team hosted a group call with an expert from Hongguo (Red Jialong.shi@nomura.com

Fruit), China’s top-ranked short drama and animation streaming platform affiliated with +852 2252 1409

ByteDance (unlisted). Hongguo initially built its business exclusively on live-action short

dramas featuring human actors. Since last year, however, the platform has stepped up

incentives for AI-generated dramas. As of today, according to the expert, AI-generated

content accounts for less than 30% of total viewership on the platform. Nevertheless, the

side effects of such AI-generated content have also emerged, prompting the platform to

reverse course—shifting user traffic and financial support back in favor of live-action

dramas.

AI tools have significantly lowered the barriers to content production. The expert

estimated that the average cost for one AI-generated short drama is typically one-third to

one-quarter of that for live-action content, while the production cycle is much shorter. As a

result, AI-animated content surged on the Hongguo platform, squeezing both the time

spent on and thus potential ad revenue generated by live-action content. Based on the

expert’s observations, some creators rapidly churn out AI-animated content of inferior

quality simply to maximize viewership and the resulting ad dollars.