China’s short drama industry pivots to AI as production costs plummet
Chinese studios are producing hundreds of AI-generated shows daily, slashing costs by up to 90 per cent and altering the creative pipeline for a sector that has surpassed domestic box office earnings.
Chinese short drama companies are increasingly producing content entirely with artificial intelligence, a shift driven by the need to reduce costs and accelerate production timelines. The industry, which generated approximately $6.9 billion in China in 2024, now releases an average of 470 AI-generated dramas daily. This transition has eliminated traditional filming roles, replacing them with smaller teams of writers and AI asset curators, while global revenue is projected to reach $14 billion by the end of 2026.
Data from the research firm DataEye indicates that an average of 470 AI-generated short dramas were released every day in January 2026. This volume reflects a rapid transformation in a sector that has boomed since its launch in 2018. These ultrashort, melodramatic shows are designed for smartphone viewing, with episodes often running just one or two minutes long. In 2024, China’s short drama market reached roughly $6.9 billion in revenue, surpassing the country’s annual box office earnings for the first time.
The adoption of generative AI has dramatically compressed production schedules. Conceptualisation, script writing, casting, shooting, and editing previously took three to four months. With AI, the process can now take less than a month, according to Tang Tang, vice president at short-drama platform FlexTV. Producing a short drama in North America once cost roughly $200,000, but AI can cut that cost by 80 per cent to 90 per cent, Tang said.
Studios are restructuring their operations to accommodate this new efficiency. FlexTV halted all traditionally shot productions in early 2026 to shift entirely to AI-generated dramas. Kunlun Tech, the parent company of drama apps DramaWave and FreeReels, began producing AI-generated short dramas in 2025 and now offers more than 1,000 AI titles on its platforms. StoReels, another popular short drama company targeting a global audience, has said it aims to produce 100 AI-generated dramas per month.
The labour pipeline has also shifted significantly. Instead of camera crews, lighting technicians, makeup artists, and visual effects teams, AI productions now rely on smaller groups consisting largely of producers, writers, AI directors, and AI asset curators. An AI asset curator translates scripts into prompts and generates reference images of characters, costumes, and scenes for AI video models to follow. Writers like Phoenix Zhu report that scripts must now include high visual specificity to guide AI models, effectively taking on cinematography responsibilities.
Global microdrama revenue is projected to reach $14 billion by the end of 2026, with the United States expected to contribute $1.5 billion. The United States is the biggest market outside of China, providing around 50 per cent of the revenue for short drama apps, according to DataEye. Research firm Omdia estimates that the global microdrama market reached $11 billion in 2025 and will grow to $14 billion by the end of 2026.
