Summary of Key Points
AI short-form dramas were once seen as a content trend with significant potential in 2024, with claims of earning millions for a starting investment of just 50,000 yuan. However, just 10 months later, the industry has fallen into severe competition: there has been an explosion in supply (with 220,000 new AI short-form dramas launched on Douyin in the first half of the year), a sharp decline in revenue (per 10,000 views, earnings have dropped from 30-100 yuan to 5-10 yuan), and most practitioners are not making any money or are even breaking even. Currently, only a few players are profitable: leading one-person companies (OPCs), companies with financial resources for investment in promotion, and teams that are expanding overseas.
I. Unveiling the Costs of AI Short-Form Dramas
Although AI short-form dramas seem to have lower costs compared to traditional human-made ones, there are several significant expenses:
- Labor costs (50%-70%): This is the largest expense. For example, a director in Zhengzhou may earn a monthly salary of 10,000-50,000 yuan, while card-drawing artists and editors can earn 6,000-12,000 yuan; salaries are even higher in cities like Hangzhou. After AI generates the images, humans are needed to judge the aesthetic quality and make adjustments, as creativity and aesthetics cannot be fully replaced by AI.
- Computing power costs (30%-50%): This refers to the cost of generating the visual content. Using tools like Seedance2.0, the cost per second for 720p video is 1 yuan, but for high-quality dramas, the need for multiple adjustments (3-5 times) raises the computing power cost to 18,000-30,000 yuan. For top-tier dramas like "The Girl Who Was Laid Off," the cost can be even higher due to more adjustments.
- Script costs (about 10%): High-quality scripts can cost 10,000-30,000 yuan, while lower-quality scripts may cost just a few hundred yuan (either generated by AI or written by new writers). Production companies that work for platforms do not need to purchase scripts themselves; they either get them provided by the platform or choose from free options.
Other fixed costs (rent, utilities) and promotion expenses are not significant, but investment in promotion is necessary for profitability, as only when the ROI (return on investment) is positive is it worth spending money.
II. Why Are Costs Lower But Still No Profits?
The main reasons why AI short-form dramas, despite lower costs, still do not generate profits are:
- Hidden cost increases: AI tools have become more expensive (Seedance2.5 is twice as costly as Seedance2.0), and the need for multiple adjustments raises computing power costs. Labor costs have also not decreased, as more specialized personnel are required to filter out high-quality content.
- Excessive supply: With 220,000 new AI short-form dramas launched on Douyin in the first half of the year, user time is limited, leading to a sharp decline in the number of hits (only 0.47% of dramas have exceeded 100 million views). Platforms have tightened policies, such as removing guaranteed payments and reducing commissions, which has further reduced earnings.
The situation is exacerbated by severe homogenization: once a theme becomes popular, it is quickly overused, leaving no chance for new dramas to succeed.
III. Who Is Profitable Today?
Although most players are not making money, there are three types of companies that are thriving:
- Leading OPCs (one-person companies): These have very low costs (only their own labor and computing power) and can quickly capitalize on trends. For example, the popular drama "The Girl Who Was Laid Off" came from an OPC. They can produce content of 90+ quality, as AI has lowered the threshold for what is considered good quality, making higher-quality content more valuable. Platforms often promote their content to investors without any additional cost.
- Companies with resources:
- Promotion companies: For example, Huasheng invested 2 billion yuan in promotion and made a profit of about 100 million yuan (ROI of 1.03-1.07), earning 50 million yuan on a 1 billion yuan investment.
- Companies that build their own platforms: Such as Zhangyue's "Paoman" platform, which has evolved from producing dramas to creating a complete ecosystem, enhancing their risk resistance.
- Overseas teams: The domestic market is highly competitive, so expanding overseas is a viable option. The global market for AI short-form dramas is expected to grow to 650 million US dollars by 2026, with only a 1% penetration rate. Since AI short-form dramas have lower costs and lower entry barriers, companies like Lingju Technology and Huayanhua are exploring overseas markets. However, they must also compete with domestic players.
IV. Where Does the Future Lie?
The AI short-form drama industry is in a transitional phase, and there are three potential directions for growth:
- IP-based operations: Developing series or adapting existing IPs (for example, creating derivatives from "Feng Shui Master" or selling the AI character "Fang Taizi" for 258,000 yuan).
- Cost reduction and efficiency improvement: Developing custom AI tools to reduce costs (e.g., Lingju Technology saved 20% on labor costs by streamlining processes).
- Deep overseas expansion: Although competition is increasing, overseas markets, especially in Southeast Asia and Europe and America, remain untapped. Localization of content (language and culture) is important.
The ultimate challenge for the industry is that while AI has increased supply, it has not yet improved profitability. In the future, either user demand must grow (e.g., more people watching AI short-form dramas) or most of the current supply must be eliminated to restore a healthy market balance.
Final Conclusion
The transformation of AI short-form dramas from a "miracle of quick wealth" to a competitive market reflects the rapid evolution of technology, which has outpaced market demand and profit models. To be successful, one must either create truly unique high-quality content or leverage resources and expand overseas. For ordinary people considering entering this industry, it's crucial to assess whether they can produce content of 90+ quality or have sufficient funding for promotion; otherwise, they may not even cover their basic expenses.