AI Content Abundance Creates New Industry Challenge In China: Falling Costs, Rising Competition And Shrinking Margins
China’s AI-generated brief drama {industry} has expanded at a startling tempo this yr, however new information suggests the sector is now colliding with the bounds of an “abundance” mannequin constructed on low cost content material alone.
According to a report from analysis agency DataEye, roughly 1,300 new AI-produced brief dramas at the moment are uploaded every day throughout Chinese platforms — a tempo that, extrapolated from first-quarter information, would complete over 120,000 titles launched industry-wide in simply three months, with AI-driven productions accounting for greater than 95% of all new releases.
The surge has been pushed by quick advances in video-generation fashions and manufacturing instruments that permit creators to transform a complete novel right into a completed brief drama with minimal guide effort. Production prices for AI brief dramas have fallen by roughly 90% in comparison with live-action equivalents, with a cultured AI manufacturing now costing beneath 200,000 yuan versus round 1.5 million yuan for a conventional live-action sequence.
Traffic Costs Are Eating Into Profits
That value collapse has not translated into broader profitability. Because manufacturing itself makes up solely a small share of complete spending, the actual battleground has shifted to promoting and viewers acquisition, which now account for roughly 70% of complete outlays.
As a flood of AI-made dramas competes for a similar pool of viewers, the price of reaching 1,000 impressions has greater than doubled year-on-year, whereas income per 1,000 views has dropped from round 60 yuan in late 2025 to only 15–30 yuan now — almost halving returns at the same time as promoting spend climbs.
The mixture of hovering acquisition prices and falling per-view income has squeezed margins industry-wide. Top-tier manufacturing firms are nonetheless largely worthwhile due to higher-quality output and extra skilled operations, however mid-tier corporations now see profitability charges of solely 3–5%, and corporations under that tier not often exceed a 2% likelihood of turning a revenue.
The “hit charge” for breakout success has additionally collapsed: amongst newly launched AI comics-style dramas fewer than 1 in 1,000 titles turns into a breakout, a hit charge under 0.1%.
Industry figures cited within the report, together with executives from Beijing Jutou Technology and Banshui Technology, recommend the sheer quantity technique — flooding platforms with low-cost content material and betting on chance for hits — has reached its sensible limits.
Rising token prices, tightening platform content material assessment, and new regulation taking impact July 1 — the National Radio and Television Administration’s classification commonplace for AI micro-dramas — are anticipated to push the {industry} away from a “quantity over high quality” strategy and towards extra selective, higher-quality manufacturing because the sector matures.
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