Chinese studios uploaded 221,900 new AI-generated dramas and comic dramas to Douyin, the short-video app owned by ByteDance, in the first half of 2026. A half-year industry report (via The Paper) puts the hit rate at just 0.48%: only 1,055 of those titles broke through 100 million views.

The report sets the break-even line at roughly 50 million views. Some 2,886 shows reached it — about 1.3% of the slate, counting Douyin alone, although many shows also stream on other platforms. The remaining 219,000-plus uploads did not clear that bar.

New releases sank month over month from March onward, yet total viewing kept climbing, reaching 515.7 billion plays across the six months. Audiences are concentrating on a shrinking pool of hits. The same report projects China's AI drama market at 40 billion yuan in 2026.

Cheaper tools, wider rollout

ByteDance launched Seedance 2.0 on its Jimeng platform in February, as Cryptopolitan has reported, and in April rolled the model out to business customers in more than 100 countries. The United States was the exception: the rollout was withheld there after legal action from Hollywood studios over copied likenesses and protected material.

In late April, the National Film Administration granted a cinema license to Bona Film Group's “Sanxingdui: Future Memories.” The 90-minute science-fiction feature, produced with Jimeng tools, cleared censorship as an animated film because regulators have no AI category.

Costs have fallen alongside the tooling gains. In early 2026, a one-minute AI short drama cost 5,000 yuan to produce; by mid-year, the price had dropped to a few hundred yuan. Together with the computing subsidies cities now offer, the entry price for attempting a series keeps dropping.

Cities bid for studios with cash and compute

Local governments are competing to host the young industry — a market the same report projects at 40 billion yuan in 2026. Shanghai's May support package offers AI micro-drama producers computing power and cloud AI models, along with help selling shows overseas. Beijing maintains a 260 million yuan fund for audiovisual technology, and its Huairou film zone gives AI drama producers vouchers to offset computing fees. Shenzhen provides technical support and discounted rent. AI filmmakers report receiving calls from city and industrial park officials across the country offering to relocate them.

In August, iQIYI chief executive Gong Yu said the streamer is “all-in” on AI, and the platform is paying subsidies to some creators whose AI content runs on the service.

Friction over likenesses and copyright

The glut has drawn complaints. The sharpest fight is over likeness: actors have protested AI movies that use their faces, and voice actors worry about losing work. The likeness question has already shaped where the tools can operate — it was legal action from Hollywood studios over copied likenesses and protected material that kept Seedance 2.0 out of the United States. Viewers also accuse AI shows of lifting characters and dance clips from other creators without credit. Beijing requires AI-produced content to be labeled, but who owns the copyright has yet to be settled. For producers and platforms, the ground rules — copyright ownership, and whether AI features ever get a category of their own — are still being written.

Some viewers saw the August box-office run of “Niu Lai,” a crudely animated film made the old-fashioned way, as a vote against AI content.

Reuters also covered China's push to turn AI video into an industry.

Source: Cryptopolitan