A major reshuffle in overseas short drama market: 80% of ad spend flows to AI-generated short dramas, live-action projects plummet by 50%

Since the beginning of the year, the overall consumption of domestic AI comic drama advertising has been continuously rising, while the market scale of live-action short dramas has been shrinking. The overseas short drama industry has also witnessed a significant change in its landscape. According to industry insiders involved in advertising, the current ratio of advertising consumption between overseas live-action short dramas and AI short dramas is approximately 2:8, with AI short dramas accounting for over 80% and holding an absolute dominant position.

What is the current situation of the overseas live-action short drama and AI short drama markets? Recently, the DataEye Research Institute interviewed Cecilia, the head and chief producer of Crazy Stone Studio LLC (American Crazy Stone Film and Television).

She revealed that the contraction of the live-action short drama shooting scale in Q1 2026 was not very obvious. After entering Q2, the shooting projects decreased by at least 30% - 50% year-on-year, and a large number of originally scheduled shooting plans were directly suspended.

In this wave of AI short dramas going global, Jiuzhou and Maiya platforms are leading the way, temporarily outshining the established leading platforms Dramabox and Reelshort. Cecilia pointed out that the core of the competition in AI short dramas lies not only in localization capabilities but also in China's technological advantages, low-cost labor, and large-scale organizational capabilities.

Among them, Jiuzhou and Maiya rely on the mature local management system to achieve mass production and replication. For example, Jiuzhou relies on a team of college students and rapidly expands production capacity with low costs and standardized processes. This refined organizational approach is an advantage that overseas local platforms find difficult to replicate.

The news about short dramas has always been slow to spread overseas. Currently, although there are overseas teams attempting to produce AI short dramas, they still lag significantly behind China in terms of overall strength, model accuracy, and labor costs.

Despite the intensifying impact of AI, Cecilia believes that if a low-cost live-action solution with costs close to those of AI and lower than traditional live-action short dramas can be introduced, market demand will be quickly released. She mentioned that in some parts of the United States, the production cost of a single live-action short drama can be approximately 800,000 yuan.

The following is a summary of the interview content:

Current situation of the overseas live-action short drama market: a 30% - 50% reduction in live-action shooting in Q2

DataEye Research Institute: Since this year, by approximately what percentage has the number of live-action short drama shooting projects in the overseas market decreased? After entering Q2 of 2026, is there a further downward trend in shooting projects?

Cecilia: The reduction in live-action shooting in Q1 2026 was not obvious. In February, there was still the Chinese New Year holiday. During this period, with the launch of Seedance 2.0 and the start of Hongguo's layout, the heads of major platforms also had successive communications, and signs of adjustment in the industry trend began to appear around March. After entering Q2 of 2026, the downward trend became very obvious. Compared with the peak period last year, the shooting projects decreased by at least 30% - 50%, and many projects originally planned to start shooting in the overseas market were directly suspended.

DataEye Research Institute: This year, it has become more difficult for pure short drama platforms to raise funds, but it is easier for AI-related short drama platforms. Even many AI short drama platforms can obtain large amounts of US dollar financing. What's your view on this?

Cecilia: This is easy to understand. From 2023 to the beginning of 2024, it was very easy for live-action short drama platforms to raise funds. However, after the financial reports for 2024 and 2025 were released, investors found that the returns were not ideal, and the cost of "nurturing the market" for live-action short dramas was extremely high. Shooting a single drama could cost one or two million yuan, and the ROI was not satisfactory. This meant losing money in both advertising and drama production, and the amounts were in US dollars, so the investment risk was quite significant.

The news about short dramas has always been slow to spread overseas. When we first started shooting short dramas in 2023, we only told foreign film and television personnel that they were online movies. Later, we gradually explained that they were vertical-screen and a new form of content. Initially, some foreign film and television people were hostile to short dramas, fearing that vertical screens would kill the horizontal-screen market.

It wasn't until the second half of last year that many film and television talents realized that vertical screens were the future and wanted to join. However, the trend has changed this year, and the future has shifted to AI short dramas. The news in the overseas traditional film and television circle is too slow. This year, many overseas film and television people agreed that vertical-screen shooting was the future, but it was already too late. AI short dramas have entered the market like a "black swan".

DataEye Research Institute: What themes are currently the focus of live-action short dramas?

Cecilia: The theme innovation of live-action short dramas has been relatively flat. The industry also wants to explore new themes, but currently, the mainstream themes are those that are more closely related to real life than AI-created ones, such as romance, domineering CEOs, campus life, female growth, and revenge in wealthy families. The difficulty of setting up scenes for these themes is not high.

The development direction of live-action short dramas is basically the same as that of localized short dramas in China. Limited by funds, there is limited room for expansion. On the other hand, AI short dramas have a wide variety of gameplay, and the creation can be boldly imagined. Themes such as werewolves, Western fantasy, and the Middle Ages, combined with various large-scale special effects, can all be realized.

DataEye Research Institute: Apart from themes related to minors, cute children, and religion, what other themes should be avoided in overseas short dramas?

Cecilia: Special caution should be exercised with political themes. If one can achieve the effect of "House of Cards," it can be done. However, the key is that many people don't have the patience to ponder slowly and don't understand American politics well, so the end result is not good. Political themes are prone to causing problems and are difficult to pass censorship, so currently, almost no one dares to touch them.

DataEye Research Institute: After being impacted by AI, domestic live-action short dramas have gradually differentiated into two main lines: one is high-quality dramas with a production cost of over 2 million yuan or platform-customized dramas, and the other is low-end dramas with a production cost of 200,000 - 300,000 yuan. Is the situation of overseas live-action short dramas also polarized?

Cecilia: Currently, everyone overseas is looking for low-cost shooting locations, but many places have not been discovered yet. At present, overseas live-action short dramas are generally moving towards high-quality production. However, if there is a low-cost live-action solution that is only slightly more expensive than AI but cheaper than traditional live-action dramas, market demand will immediately emerge. However, currently, the production cost of live-action short dramas self-produced by overseas short drama platforms can only increase and cannot be reduced.

DataEye Research Institute: You previously mentioned that the price of live-action short dramas in some overseas regions is only 800,000 yuan. How is this achieved?

Cecilia: It's not applicable to the entire overseas market, only some regions can achieve this. Cost reduction and efficiency improvement are an absolute trend. You have to think from the customer's perspective. The core of the AI impact is the large price difference. If live-action short dramas want to be competitive, they have to find a way. In mature regions like Los Angeles, the costs of venues and labor have reached a bottom line and cannot be further reduced.

There are several ways to reduce costs:

First, find countries with lower costs, such as Australia, South America, and South Africa. These underdeveloped regions have large exchange rate differences and extremely low prices. It requires producers who understand high-quality short drama production and can build teams to assemble teams and manage them, thus reducing costs.

Second, in the United States, don't focus only on New York and Los Angeles. Some states in the United States offer a 30% film tax rebate, and the venue fees are also low. In fact, any second-tier city in the United States can be used for shooting. The key lies in how the producer organizes the personnel and controls the costs.

Third, control the labor costs of actors and travel expenses. If this is done well, the overall price can be reduced to 800,000 yuan.

Current situation of AI short dramas going global: The competition in AI short dramas lies in China's technology, low-cost labor, and large-scale organizational capabilities

DataEye Research Institute: How do you view this wave of AI short dramas?

Cecilia: This wave of short dramas going global has actually benefited many people. As a production company in the downstream of the industrial chain, we have also benefited from it. Although the transformation to AI will have some impact on production companies, the overall direction of short dramas going global is very positive. The platforms leading the way in short dramas going global are mainly those dedicated to this field, especially the pioneers of Chinese-funded platforms. I sincerely hope that they can achieve good returns and develop in a healthy way. However, returns are not solely determined by industry efforts. The key lies in whether the market accepts the products and whether the products are of high quality. In the past, the shooting cost was too high. Now, with the help of AI, the production capacity has been increased, the cost has been controlled, and the ROI has been made positive through continuous production. This is a good thing for enterprises to improve their profits.

DataEye Research Institute: In this wave of AI short dramas going global, why are Jiuzhou and Maiya leading the way for now, rather than Dramabox and Reelshort?

Cecilia: Dramabox and Reelshort have previously focused most of their efforts on live-action short dramas and have done very well in this business. Their teams are also good at localized operations. However, each leading platform has its own strengths. For example, Maiya and Jiuzhou have significant advantages in domestic management and domestic resources.

In the early stage of the AI wave, the advantages have completely reversed - the competition in AI short dramas lies not only in localization but also in China's technology, low-cost labor, and large-scale organizational capabilities. Maiya and Jiuzhou are good at domestic management and large-scale replication. It is said that Jiuzhou uses a team of college students, which has low costs and can quickly replicate processes, enabling rapid expansion of production capacity. This down-to-earth and organizationally proficient approach is the strength of Chinese enterprises and is beyond the reach of overseas platforms.

DataEye Research Institute: What is the current situation of overseas AI short drama production? Are there any teams working on it?

Cecilia: There are indeed overseas teams working on it, but their overall strength, model accuracy, and labor costs are far inferior to those in China. I am currently observing and planning to integrate an AI team to cooperate with overseas foreign-funded platforms. Their demand is huge, and there are various cooperation models.

DataEye Research Institute: What is the acceptance level of overseas audiences towards AI short dramas? Do they like to watch them? Do overseas platforms require the labeling of AI-generated content?

Cecilia: Currently, there are a large number of AI short dramas overseas. Initially, there was strong opposition from audiences, but now such content has become part of daily life, and people no longer deliberately resist it. However, in their hearts, they still prefer live-action content.

The opposition from the acting community is the most intense. Their attitude towards this has gone through several stages: from initially jointly voicing their resistance, to later feeling helpless due to concerns about losing their jobs, and now they can only express their demands in groups. Far-sighted actors are also starting to make two-handed preparations. On the one hand, they stick to their beloved acting careers, and on the other hand, they consider changing careers to ensure their livelihoods.

On the platform side, Instagram does not label AI content. To identify AI short dramas, one can either make a self-judgment or refer to the opinions of netizens in the comment section.

DataEye Research Institute: Does AI short drama have a significant impact on the work of overseas actors?

Cecilia: I can't determine the exact impact, but actors who have been shooting overseas vertical-screen short dramas for a long time under high-intensity conditions should be able to notice that the relevant orders are decreasing. Discussions about AI have been around for four or five years, not just since the rise of short dramas. Short dramas, with their advantages of low cost and high efficiency, combined with large amounts of data training, have further promoted the accelerated development and implementation of AI technology. The development of AI film and television technology owes a lot to the short drama industry.

DataEye Research Institute: Are there any overseas companies signing image authorization agreements with short drama actors?

Cecilia: So far, I haven't heard of any very mature and large-scale actor image authorization cooperation in the overseas short drama industry, but I think this is very likely to happen gradually. With the development of AI short dramas, digital humans, and virtual content, actors' portraits, voices, and performance data will all become more important assets.

Of course, in the initial stage, the acting community will definitely be very cautious and may even resist, which is completely understandable. This involves issues such as the boundaries of rights and interests, scope of use, authorization period, revenue distribution, and the impact on the actor's future career development. For successful authorization, it should not be a simple "buyout" of the actor's image but should be based on full respect for the actor's rights and interests, clear contracts, reasonable compensation, and transparent usage scenarios.

I think there will definitely be actors willing to try in the future, especially those with high image recognition, clear commercial value, and a willingness to embrace new technologies. The first person to try may face controversy, but if the industry rules are gradually improved and the authorization model becomes more fair and transparent, this may also become a new source of income and a way to expand the actor's career. So I think it's not a question of whether it will happen but how the industry can regulate it.

DataEye Research Institute: Have overseas big companies made any relevant layouts and actions in the fields of AI movies and AI TV series?

Cecilia: There have been movies produced entirely by AI before. Overseas big companies have always wanted to make layouts in this area, and their ultimate goal is to further reduce production costs.

Although AI can significantly reduce costs, and a combination of live-action and AI can also be used, big companies have very high requirements for the production quality of content. Currently, AI is still in the training stage and has not reached the required level in terms of the coherence of the picture, the rationality of the logic, and the control of details.

We have long established a work model that prioritizes efficiency in shooting short dramas. However, overseas traditional film and television, especially non-independent movies, follow the principle of system priority and are managed by the union system. Big companies want to reduce costs, but the union will increase the prices. The two sides are in a continuous game and constantly making compromises. If the efficiency-prioritized thinking of short dramas is applied, the industry cost can be reduced by 30 - 50%.

After AI enters the market, industry competition will also focus on profits. If the production cost of live-action content can be reduced to the same level as that of AI, big companies will make a new choice between live-action and AI.

DataEye Research Institute: You have a very positive attitude towards AI. Do you plan to produce some AI simulated live-action dramas in the future?

Cecilia: If there are suitable opportunities, we are very willing to try AI simulated live-action dramas. I am very optimistic about AI and new technologies and am looking forward to the changes they will bring to the content industry. Crazy Stone has always focused on overseas live-action short drama production, but we are also very aware that AI is changing the process, efficiency, and imagination space of content production. Therefore, we will maintain an open attitude and actively learn and explore.

Of course, AI simulated live-action dramas are not simply a replacement for live-action shooting. They will form new production logics, new aesthetic standards, and also bring new job opportunities and cooperation models. The arrival of the wave is not scary. The key is our attitude towards it. Instead of being anxious about the impact of technology, we should use an open, optimistic, and learning attitude to understand, learn, and use it.

I also hope that colleagues in the industry can view this positively. Every technological change will reshape the industry and create new opportunities. I hope that everyone can stay