Summary of Key Points
The maturity of AI short-form drama technology has significantly reduced production costs (by 90%) and increased efficiency (a single person can produce multiple episodes in just a few days). However, the influx of numerous players with no entry barriers has led to an overabundance of content, causing platform revenue shares to plummet. The cost of advertising and promoting content has become a new major expense, resulting in a loss of profits. The competitive focus has shifted from "who can produce dramas" to "how to get viewers to watch the dramas." AI has not created opportunities for ordinary people to overcome disadvantages; instead, it has amplified existing advantages such as intellectual property (IP), private audiences, and user insights. In conclusion, AI is merely a tool, and the real winners are those who use it to reinvent their business models, not just those who know how to operate the technology.
Detailed Analysis
1. **AI Reduces Costs, but Profits Disappear: The Counter-effect of Over-supply**
Although AI has lowered the cost of producing short-form dramas by 90%, the savings have been offset by the excess supply:
- Exponential Supply: In Q1 2026, 95% of the 128,000 new short-form dramas on the market were produced using AI; in March alone, 50,000 new dramas were added, with Douyin broadcasting 180,000 AI-produced dramas. Previously, 100 companies competed for a limited number of viewership slots; now, tens of thousands of individuals are competing for the same audience.
- Unchanged Demand: Users only have 24 hours in a day, and their spending on paid content has not increased despite more AI-generated dramas. The supply far exceeds demand, making each drama less valuable. Platform revenue per 10,000 views has dropped by 90%, with some low-quality dramas earning only 3-5 yuan from 10,000 views.
- Real Example: Bai Wuchang’s company produced 11 AI dramas in a month but earned only 9.6 yuan. The savings on production costs were completely negated by the low revenue due to over-supply.
2. **Competition Has Changed: From “Being Able to Produce” to “Getting Viewers to Watch”
The barrier to producing short-form dramas used to be the ability to produce in large quantities (requiring a team and funding); now, with AI, this barrier has been removed, and the focus of competition has shifted to "how to attract viewers."
- Disappearance of Old Barriers: Working professionals, small studios, and even entrepreneurs from other industries can produce dramas with just one computer. The ability to produce dramas is no longer a competitive advantage.
- New Costs: To make poorly made dramas visible to users, companies must invest in advertising (to buy traffic and recommendations). Industry data shows that advertising costs account for 70%-85% of total expenses, while AI production costs are negligible. Budgets have shifted from hiring actors and renting venues to paying platform fees for traffic, leaving little profit.
3. **AI Does Not Provide Opportunities for Ordinary People to Overcome Disadvantages; It Amplifies Existing Advantages**
Many believe AI offers a chance for ordinary people to succeed, but it has actually leveled the playing field in terms of efficiency, making existing advantages more crucial:
- Equalized Efficiency: Startups used to rely on faster execution to catch up with giants; now, AI has made everyone produce at the same speed, and efficiency is no longer a competitive factor.
- Core Advantages Matter: The key factors are having an IP (e.g., a story with existing fans), a private audience base (able to reach users without advertising), understanding user preferences, and data-driven content customization. AI merely amplifies these advantages; without them, even the ability to produce dramas does not guarantee profits.
4. **AI Is Not Just a Tool Upgrade; You Need to Reconstruct Your Business Model to Profit**
Many companies use AI as a superficial tool (e.g., selling memberships or using prompts), but without changing their organizational structures and profit models, their revenue remains stagnant.
- Example Comparison: The invention of the car did not involve simply adding an engine to horses; the internet transformed business by creating new platforms. The lesson from AI in short-form dramas is that technology alone does not ensure success; only those who redesign their business models can thrive.
- Correct Approach: Use AI for customized content (e.g., creating exclusive content for private audiences) or derivative works based on existing IPs to reduce customer acquisition costs, rather than just producing large quantities of dramas for platform revenue shares.
5. **The Ultimate Lesson of the AI Era: Production Is Solved; Profits Depend on People**
The story of AI in short-form dramas will repeat in other industries such as e-commerce and local services: technology lowers barriers, attracting new entrants, leading to fierce competition and eventual reshuffling of the market.
- Winners’ Logic: The winners are those who use AI to reinvent their business models. While AI solves the problem of whether content can be produced, questions of whether it will be sold and how to make a profit ultimately depend on human strategies.
In One Sentence
AI makes it faster to produce dramas, but it does not guarantee viewership. It reduces production costs without providing new ways to generate profits. The real opportunity lies in reimagining business models behind the technology.