The leading short drama company in Europe and the United States is pouring heavy investment into AI-generated dramas, with the payment rate staying on a par with that of live-action dramas?

DataEye Research Institute notes that a special AI short drama app in the overseas short drama market is undergoing obvious changes.

My Muse, an AI short drama app launched in March 2025, may be unfamiliar to many people, but its parent company HolyWater and its matrix product My Drama are absolutely well-known leading platforms in the overseas short drama market. In particular, the live-action short dramas on the My Drama platform often top the DataEye overseas micro-short drama popularity list.

It is worth noting that My Muse has barely had obvious advertising traffic investment since its launch, but recently, the volume of its creative materials has risen sharply, and it once ranked among the TOP3 in the overseas short drama app material growth list.

What is the reason behind this? Does it represent some kind of strategic change of HolyWater?

I. My Muse Launches Large-scale Advertising Traffic Investment

According to the data of ADX Overseas Short Drama Edition, before June, My Muse had extremely low advertising investment intensity, with the daily volume of advertising materials remaining at single digits for a long time, the maximum was only about a few hundred groups, and the duration was extremely short.

However, since mid-June, the advertising investment intensity of My Muse has increased significantly. Specifically, the recent advertising traffic investment rhythm of My Muse is mainly divided into two stages:

① Significant volume growth from mid-June to early July, the daily volume of advertising materials of My Muse rose from about 10 groups to about 1400 groups;

② Further acceleration from early July to late July, in just half a month, the daily volume of advertising materials of My Muse soared from about 1400 groups to a maximum of nearly 9000 groups, and it has slightly declined recently.

At the same time, the number of short dramas invested by My Muse has also begun to increase significantly.

According to the data of ADX Overseas Short Drama Edition, in the past 90 days, My Muse has invested in 467 short dramas, while in the past 30 days, this number has reached 441, and in the past 7 days, the number of short dramas invested by My Muse is 298.

This set of data means that more than 94% of the 467 short dramas in the past 90 days have been put into advertising since the past 30 days; and more than 67% of the 441 short dramas in the past 30 days have been put into advertising in the past 7 days, which perfectly matches the two-stage growth of My Muse's advertising investment intensity.

In terms of downloads and revenue, according to the data from DianDian, the number of downloads and revenue of My Muse have risen synchronously since early July, which is consistent with the outbreak time of the second-stage advertising investment. The daily revenue rose from about 3,000 US dollars in early July to a maximum of about 34,000 US dollars in mid-July.

In fact, the large-scale advertising investment of My Muse is not an isolated phenomenon. In mid-July, MoboDrama, an overseas AI short drama platform under Changdu Technology, suddenly launched advertising investment. Earlier, there were also AI short drama products such as VibeShort and StoryReels that carried out large-scale advertising investment.

However, the difference is that My Muse is an old product launched for more than 1 year, not a new app launched this year, and My Muse's advertising investment did not explode directly like VibeShort, but went through two stages of rising and accelerating, which seems to follow the logic of launching large-scale investment after verification.

So what is the reason behind the two-stage volume growth rhythm of My Muse's recent advertising investment? What is the driving force behind it?

II. Three Core Driving Forces Behind the Change

From the external environment to internal changes, DataEye Research Institute believes that this change in My Muse's advertising investment mainly has the following three factors:

(1) Both AI short drama technology and market have matured

In the early days of My Muse, AI short drama technology was not mature, and neither production capacity nor quality was far from reaching the level of forming a complete ecosystem. But since the release of Seedance 2.0 at the beginning of this year, the technical barriers have been directly broken.

In addition, on the basis of the maturity of large model technology, various AI short drama tools have also evolved rapidly, from single-point tools to full-link tools, to infinite canvas, 3D director console and so on. The product side has also entered the mature stage, and even producing AI short dramas by one person has become a reality.

At the same time, the number of AI short dramas on the market has exploded, and leading platforms such as NetShort and DramaWave have increased their investment in AI short dramas. With the technology, products and market all becoming mature, the opening of My Muse's advertising investment is a natural move under this background.

(2) The commercialization of AI short dramas has been verified

If the market-level data verification comes from competitors, then the internal factor driving My Muse to take action is most likely the personal verification of commercialization.

On July 23, HolyWater, in cooperation with the consulting firm Owl & Co, released a micro-short drama audience research report titled "The State of Microdrama 2026". The most impactful data in the report is that My Muse's payment conversion rate is 23.6%, which is almost the same as the 23.9% of My Drama, the benchmark live-action short drama product under HolyWater.

This means that at the moment when technology and production capacity are exploding, there is almost no obvious difference between the user payment performance of HolyWater's AI short dramas and that of live-action short dramas, but the cost can be greatly reduced, which means a substantial increase in return on investment at the commercial end.

(3) Sufficient financial support

In January this year, HolyWater completed a $22 million Series A financing, which was the largest single financing in the micro-short drama track outside Asia at that time.

In February after the financing, HolyWater acquired AI visual effects studio Jeynix to increase its investment in AI short dramas. The official stated that the acquisition aims to strengthen its "AI-first" strategic positioning and use Jeynix's technology to enhance post-production capabilities.

Combined with the two-stage advertising investment trend of My Muse's volume growth in June and outbreak in July, it is not difficult to find that this is probably the process of trial investment and volume expansion after improving the AI infrastructure with sufficient financial support.

III. My Muse's Identity Transformation: From Test Platform to Growth Engine

In fact, in addition to the above factors, there is a deeper change worthy of attention behind My Muse's large-scale advertising investment: the internal positioning of My Muse in HolyWater is undergoing a transformation.

At the time of its birth, My Muse was only a "low-cost AI testing tool".

HolyWater has 4 main products: My Passion, My Muse, My Drama and FreeBits. These four products are respectively e-book platform, AI short drama platform, live-action short drama platform, and IAA short drama platform that shares the content library with My Drama.

Therefore, the original internal ecological process of HolyWater is as follows:

① E-books with excellent performance on the My Passion platform may be selected for film and television adaptation;

② The IP in the first step is made into low-cost AI short dramas, launched on My Muse for quick trial to verify the market effect;

③ The IP that has been successfully verified in the second step is put into live-action production and launched on My Drama;

④ The short drama content on the My Drama platform is shared with FreeBits, the former adopts the paid model, and the latter adopts the advertising model to cover price-sensitive users.

However, since the outbreak of AI short dramas this year, the positioning of My Muse has naturally been transformed driven by the market.

The data released in the report on July 23 (the payment conversion rate of My Muse is almost the same as that of My Drama) combined with the recent large-scale advertising investment of My Muse almost confirms that My Muse is no longer a "test tool", but will become a new "growth engine". Anatolii Kasianov, Co-founder and CEO of HolyWater, also said bluntly: AI is the engine of growth.

Of course, the transformation of positioning is not equivalent to success. For My Muse, there is an unavoidable realistic problem: in the industry, there are not only leading old players such as NetShort and DramaWave undergoing transformation, but also new dark horses such as VibeShort emerging, and AI technology has greatly reduced the localization difficulties faced by Chinese overseas short drama manufacturers in the era of live-action short dramas.

Against this background, it is still unknown whether My Muse can maintain its payment conversion rate in the AI short drama ecosystem and stand out in the competition of Chinese short drama manufacturers going global.