Inertia: The Historical Logic and Realistic Power of AI Short Dramas

More often than not, clues to the overall situation are hidden in details that seem to be completely unrelated to each other.

For example, the film *Digger*, which cost at least 125 million U.S. dollars to produce, has grossed only over 20 million U.S. dollars worldwide since its release on October 2. It turned out to be the last film of Warner Bros. before the merger. After the release of this film, which is expected to suffer a maximum loss of 250 million U.S. dollars, Paramount Skydance finally successfully acquired Warner Bros. for 81 billion U.S. dollars after a long period of tangled disputes.

The founder of Paramount Skydance is David Ellison, whose father is Larry Ellison. Larry Ellison is the founder of Oracle, which holds roughly 2 billion U.S. dollars worth of equity in TikTok, whose total valuation is 14 billion U.S. dollars.

A huge commercial puzzle is unfolding before our eyes. Oracle, OpenAI, SoftBank and the U.S. government are leading the Stargate Project with a total investment of 500 billion U.S. dollars. The TikTok held by Oracle owns the data with the deepest penetration and the largest sample size in the contemporary era. Skydance, controlled by the Ellison father and son, is listed as one of the four major Hollywood production companies alongside Disney, Universal Pictures and Sony Pictures.

A transparent technological iron curtain is rising slowly on both sides of the Pacific. On the other side, century-old film studios have eventually nestled under the wings of large corporations. But on this side, AI short dramas are developing in full swing.

This year, a new logic has gradually pieced together the previously unclear puzzle.

Where Did the Audience Go?

The decline of a company usually starts with the evasive data in its financial reports.

The most successful part of Netflix is that its public relations promotion once successfully positioned the company alongside Amazon, Google and Facebook, creating the gimmick of "FANG". In July this year, the company announced that in order to "maintain focus on our key financial metrics - revenue and operating profit", it will reduce the viewing time report that was released twice a year to once a year starting from January 2027. Back in 2025, Netflix had already stopped releasing quarterly subscription figures.

In the first half of 2026, Netflix subscribers' total viewing hours reached 97 billion hours, only a 2% increase compared to the same period in 2025. While the Nasdaq and S&P indices keep hitting new highs, Netflix's stock price has fallen by nearly 47% from its 2025 peak.

The situation of domestic video platforms in China is not any better.

In August this year, the *China Internet and New Media - Monthly App Tracking Report* released by Nomura Securities showed that as of July 2026, the total daily active users (DAU) of Tencent Video, iQiyi, Youku and Mango TV was only 155 million. The monthly time spent (MTS) of Tencent Video, iQiyi, Youku and Mango TV decreased by 31%, 27%, 47% and 24% year on year respectively.

For these PGC video platforms, a falling stock price means poor profit prospects, which is backed by the continuous loss of users.

So here comes the question, where on earth have the users gone?

The answer is Hongguo.

The daily active users (DAU) of Hongguo Short Drama under ByteDance have reached 168 million, with a year-on-year increase of up to 107%, and its MTS has increased by as high as 157% year on year.

There is no doubt that short dramas have long been the mainstream of China's Internet. Not long ago, Yi Lijing admitted on PAPI's show that she is also a short drama user. As user habits and business models on Hongguo gradually mature, subsequent competitors hardly have any latecomer advantage. If personal experience alone cannot rigorously prove how addicted users are to short dramas now, we might as well take a look at the data.

The August data from Nomura's report shows that Hongguo's time share has jumped from 2% in the same period last year to 6.0% (up 182% year on year, DAU up 118% year on year), second only to Douyin, WeChat and Douyin Lite. While the vast majority of applications have declined to varying degrees, Hongguo's time share has increased significantly.

Open Hongguo, the most-watched content on the platform is AI short dramas, the content with the most user interactions is also AI short dramas, and most of the top-ranked content on the "Hot" list are AI short dramas. AI short dramas are becoming a new normal on China's Internet.

AI Short Dramas Enter Industrialized Transformation

Many successful Chinese TV dramas tell wonderful stories of entrepreneurial history. From *The Greed of Man*, *The Grand Mansion Gate*, *Qiao's Grand Courtyard* to *The Knockout*, this rule has stood countless tests without exception. On the Hongguo platform, this truth still holds. Open Hongguo, go to the ranking list, most of the most popular episodes tell stories of "counterattack".

"Counterattack" is undoubtedly a kind of "entrepreneurial history" story that can more stimulate the audience's adrenaline. In an episode that lasts no more than three minutes or even shorter, there is no need for any logic or common sense at all, as long as it can guide the user's emotions within the specified time and specified template. Most of these stories go like this:

He Pingsheng, a disciple with mixed spiritual roots, cultivates from the mortal world to the immortal realm relying on a cornucopia.

In this life, he decides to turn over a new leaf. Starting from nothing, he collects wild vegetables, travels to county towns, finds sales channels, does business, and gradually opens up business paths with courage and experience.

In her previous life, Mi Ke was a cannon fodder best friend of Song Jingyi, the heroine who is adored by thousands of people. Reborn one day, she binds a system. As long as she completes tasks, she can exchange for beauty and break free from the tragic fate of being cannon fodder.

Chen Mo accidentally obtains the Hundred Lives Reincarnation System, which allows him to retain his consciousness and improve his aptitude after death in each life.

And so on, the list goes on.

Montaigne said that arrogance comes from two causes: thinking too highly of oneself and thinking too lowly of others. In essence, every turning point in human history is either caused by overcoming this arrogance, or by indulging in it. If the production of traditional TV dramas and even films is still in the stage of manual crafting, then the hidden large-scale industrial production capacity behind AI short dramas has indeed broken through the cognition of many people.

In the fields of Go and mathematical research, AI has demonstrated self-learning capabilities beyond expectations. The practice of merely storytelling and using audio-visual language is by no means the moat of human wisdom and art.

The biggest impact brought by the mass production of AI short dramas is standardized, assembly-line low-cost industrial products. The ability to increase output and democratize technology, leveraging the distribution advantages of the platform to reach user groups with more diverse layers and more diverse needs, and explore standardization and institutionalization. This is the only way for all industrial production.

This ultra-large-scale production means more trial and error and fault tolerance, the possibility of covering more users, and the poetic arrival of a certain Turing moment.

For ordinary users, whether AI short dramas are good or not, and whether to watch AI short dramas is only a matter of independent choice of free will. For the market, this does not even constitute a problem at all.

The Logic of "Inertia"

Looking back at the more than 30-year history of the Internet, we clearly realize that the context of the Internet is exactly "inertia". The launch and popularity of the iPhone eliminated traditional feature phones and promoted the prosperity of the mobile application ecosystem. The maturity of the mobile application ecosystem promoted the cycle improvement of online payment and consumption. Payment and consumption habits further enriched application scenarios and consumer groups.

Lakala failed to see the impact of Alipay, Alipay failed to see the powerful power of WeChat Red Packet, Taobao failed to see the huge potential of Pinduoduo, and neither Tencent nor Alibaba expected the rise of Douyin in the future.

As for Baidu, it saw nothing at all.

Every technological change first affects the supply chain at the industrial end, then ordinary user groups begin to perceive the trend of change. After that, brand new user behavior habits begin to become prevalent, and finally new application scenarios emerge as the times require, covering more user groups.

Thus, it further promotes the maturity of technology, makes it mainstream, settles down after the ebb, and waits for the next technological revolution.

Now we are at such a node moment, the trend of short videos is still in the ascendant, while the wave of AI is surging in.

If we stretch the time span to three to five years or even longer, we will find that in such a cycle, throughout the history of the Internet, there has never been a lack of convergence of trickles, but such a trend "convergence" has hardly ever appeared before.

Short videos represent consumption scenarios and habits, while AI heralds new technological privileges.

From this perspective, we may be able to understand why Facebook/Meta has been tinkering with the metaverse before, why Microsoft wants to acquire Activision Blizzard and continue to inject capital into its continuously loss-making Xbox business, why Elon Musk wants to acquire Twitter, and why Apple once coveted smart vehicles.

Because in the historical evolution logic of "inertia", it is necessary to anchor user scenarios and behaviors. However, in the gap period before the AI era, the results of these attempts are not considered successful. The metaverse suffered a crushing defeat with no chance of recovery. The renaming of Twitter to X has an uncertain outcome. Xbox is on the decline and can hardly protect itself now, and Apple stopped its car project halfway and called off the plan.

So in the trajectory of "inertia", what is the logic of AI short dramas?

Public data shows that Douyin's DAU is more than 20% lower than that of WeChat, but its time share has surpassed that of WeChat. The time share of the entire Douyin ecosystem is as high as 40.9% in the TOP 50, while that of the Tencent ecosystem is only 29.1%.

Short videos have in fact become the most mainstream and stable user habit at present. Being built within the Douyin ecosystem provides traffic support for Hongguo. There are endless use scenarios in daily life, and AI technology provides audio-visual experience guarantee for short dramas from stories, dubbing to character models. The most basic free consumption model has already been verified and put into operation on the Hongguo platform.

Driven by the logic of "inertia", AI short dramas are the most adapted result of "inertia".