AI short drama output up 13x, but under 1.3% recoup; overseas is next battleground
QuestMobile data cited by the article put short-drama monthly active users at 718 million in February 2026, with Hongguo Short Drama hitting 168 million daily actives in July, up 107% year over year; as Seedance 2.0 cut generation pricing to roughly 0.6 yuan per second of 720p video (about 1.5 yuan for 1080p), 430,000 micro short dramas went online in the first eight months of the year, 13 times last year's total, with AI-made titles above 90%. Yet DataEye figures cited in the piece show fewer than 1.3% of AI dramas recouped costs in the first half using 50 million plays as the break-even mark, the hit rate was just 0.16% in Q1, per-10,000-play revenue fell from 30–100 yuan a year ago to 5–10 yuan, and ad spend typically eats 70–90% of top-up revenue. Overseas expansion is the proposed way out: DramaBox, ReelShort and NetShort led overseas in-app purchase revenue in H1 2026, but ReelShort parent Crazy Maple Studio posted 5.721 billion yuan revenue and an 85.84 million yuan net loss for 2025, while Chinese Online lost 671 million yuan in 2025 with 953 million yuan in sales expenses.
AI has cut short-drama production costs to under a fifth of live-action, but user-acquisition spending still absorbs the profit, showing that generative-AI cost savings do not automatically translate into margins for content makers.