AI short drama melee: What major companies compete for is scripts or next-generation traffic entrances
Ten thousand points of research
2026.11.11 15:17
· From Jiangsu
Full text 4691 words
Text | Wandian Research, author | Feng Ling, editor | Momo
In 2026, AI short dramas have become one of the hottest tracks on the Chinese Internet.
According to data released by QuestMobile, the total net usage time of short drama videos in September 2026 reached 13.329 billion hours; the monthly active users of Hongguo’s free short dramas have exceeded 430 million. Within Douyin Group, its number of users is even more than Doubao, making it the second largest application after Douyin.
Also in this year, the four giants, ByteDance, Tencent, Kuaishou, and Baidu, entered the market one after another. Some of them built independent APPs, and some launched small program matrices, splitting the capabilities of large video models into independent business modules, and then each equipped with an AI short drama creation incentive plan.
On the surface, the competition between the giants focuses on three things: who makes their own APP, whose account-sharing policy impresses the production team more, and who has a thicker script library. But what really needs to be answered is another question: Is what major companies have been betting on a batch of short drama scripts that can be put on the market for consumption, or is it a traffic portal for the next generation?
01 The four paths reveal the same anxiety
The entry strategies of the four giants are very different, but the path itself has put their cards on the table.
ByteDance is currently the only player that covers the entire industry chain.
Seedream image model, Seedance video model, Jimeng AI and Cutting together form the production tool layer. Tomato Novel provides content source supply, Douyin and Hongguo are responsible for traffic distribution, and user behavior data is then flowed back to guide the next round of topic selection decisions. In other words, this set of links has basically been closed: the content generated by AI is first run through Byte's own traffic pool for market verification, and the popular topics that come out will immediately enter the next round of mass production. Hongguo’s 430 million monthly active users, coupled with the average usage time of 151 minutes per person per day, is the most direct result of this closed loop.
In addition, in October 2026, Volcano Engine launched a creative incentive plan - the "Seedance Premium AI Drama Incentive Plan", which is divided into categories according to the monthly popularity ranking: TOP1 to 10 will be rewarded with 200,000 yuan, TOP11 to 20 will be rewarded with 100,000 yuan, and TOP21 to 50 will be rewarded with 50,000 yuan. The incentives will be distributed in the form of 50% cash plus 50% equivalent rebates.
This plan is not a simple cash subsidy, but a carefully designed strategic move. The core is to use content incentives as leverage to compete for dominance in the AI film and television production chain. A closer look shows that Byte's money is not spent on attracting new users, but on the supply side. It buys content density. Others calculate the cost of acquiring customers, while bytes calculate how much content is consumed per unit of time. These two accounts are not the same thing at all: the former is a traffic business, and the latter is a factory business.
But closed loops are also walls. The topic selection is determined by the reflow data, which means that the platform will continue to produce those emotions that have been verified, and there will be more and more hits, and they will look more and more similar. Byte itself should be aware of this, so what it really needs to look for are new stories that have not yet been verified by data.
Tencent’s strategic anxiety needs to be analyzed from its business data.
Data from QuestMobile shows that in June 2026, the user time market share of Tencent products dropped to 29.7% from 31.9% in the same period last year, falling below 30% for the first time. The urgency lies in: the byte system increased from 33.3% to 40.1% in the same period.
As early as June 2025, WeChat first launched an official short drama mini program to test the waters. In July 2026, this small program was renamed "Green Bubble Short Drama" and began grayscale testing. Within one month after its launch, it had 156 million active users, making it the second largest short drama application after Hongguo.
Come October 2026, WeChat officially launches the Green Bubble short drama. Its incentive policy has a very special design: it no longer regards the number of broadcasts as the only assessment criterion, but sets the per capita broadcast time of no less than 10 minutes as the threshold. New dramas that meet the standard can receive 100% of the income incentives.
What Tencent is doing is actually a defensive attack. What it is worried about is not how much money it can make from the short drama business itself, but the meaning behind the number "user time fell below 30%": WeChat is the last super portal in China that has not been completely occupied by short videos. If the consumption habit of short dramas is developed elsewhere, WeChat will lose not only a piece of revenue, but the part of the content mind outside the social relationship chain.
It is precisely because of this that it dares to set the incentive threshold at "10 minutes per person." The playback volume can be brushed, but the duration cannot be brushed. What Tencent wants is not to make the rankings look good, but to prove that users can retain users in WeChat.
Kuaishou’s approach is much more focused, with one core logic: focus on commercialization and realization.
Public financial reports show that Keling AI’s operating income in the second quarter has exceeded 850 million yuan, an increase of more than 200% over the same period last year and an increase of approximately 31% over the previous quarter. And the cumulative revenue in the first half of 2026 will exceed 1.5 billion yuan, which is already higher than the 1.1 billion yuan in the whole year of 2025.
Kuaishou regards Keling AI as its main underlying architecture. In 2026, it will launch a special incentive policy for good dramas and series. A single drama can receive up to 200,000 yuan in subsidies. It has also held an AI creator competition, and a single project can receive up to 500,000 yuan in cash support.
Among the four, only Kuaishou has counted AI skits as “income” rather than “strategy”. This is a very smart path: instead of competing with Byte for the content platform position, sell shovels instead.
But the ceiling of the tool business is determined by the customer's paying ability.
Kuaishou subsidizes good dramas and holds creative competitions. It seems that it is building a content ecology. In essence, it is driving the demand side of its own tool customers, so that subsidizing buyers can sell more shovels. How far this style of play can go depends on whether the downstream producers can sustain it.
Finally, let’s talk about Baidu. Its industrial layout is relatively marginal, but its strategy is more pragmatic.
In January 2026, Baidu Smart Cloud launched the AIGC full-process solution for the comic drama industry, covering all production links such as script generation, storyboard disassembly, screen generation, dubbing and soundtrack, and also took the lead in establishing the AIGC Content Creator Alliance.
Falling on the Baidu APP, it was disclosed at the Baidu Creator Conference: The number of users of the platform's AI comics will reach 100 million in April 2026. The profit share for creators in the current quarter increased by 103% compared with the previous quarter, and the cumulative profit share of the platform reached 2.2 billion yuan. By August, the quarterly profit sharing scale for creators increased by 88% month-on-month.
Baidu looks the least impressive, but its positioning is the most flattering. It basically does not participate in the competition for entrance, but provides infrastructure for all those who end up competing. At the same time, it uses the information flow scene of Baidu APP to take over the form of comics and dramas that are lighter, cheaper, and more suitable for the sinking market. The 100 million comic drama users and 2.2 billion cumulative profits show that it has found a category gap that has been ignored by the other three companies, but its weakness is also obvious: the growth of profit sharing is highly dependent on platform subsidies and advertising inventory. Once advertisers lose patience with the conversion effect of comic dramas, this curve will break faster than the other three.
Behind the four paths is the same judgment: AI short dramas are one of the few tracks that continues to generate incremental space after the mobile Internet landscape solidifies. However, what they are really grabbing are different: Byte is grabbing supply density, Tencent is grabbing duration retention, Kuaishou is grabbing tool orders, and Baidu is grabbing category gaps. If four things are pushed forward at the same time, they will all hit the same bottleneck in the end: no matter which path is taken, where will the content that can be started come from?
So the common issues in the industry are pushed to the next level: scripts.
02 The battle for scripts: What you are fighting for is not the story, but the assets that can be worked on again and again.
Is there any real evidence for "script determinism"?
Basically, most of the hits in AI short dramas in the first half of 2026 will come from IP adaptations of online texts. For example, "Illustration of Ten Thousand Demons" has a total online playback volume of more than 6 billion, and "Betrothal to the Border, a Sinful Wife Opens up Wasteland to Raise a God of War" has more than 4.1 billion playbacks on the Hongguo platform, both of which are works adapted from online text IPs. On the other hand, original AI content without IP support basically has no room for survival.
As a result, Internet IP licensing fees have also increased.
Data from Yi En Report shows that S-level works cost 80,000 to 100,000 yuan each, popular A-level works cost 60,000 to 80,000 yuan, and ordinary works start at 30,000 yuan; from January to May 2026, online IP licensing transaction volume reached 1.8 billion yuan, an increase of 120% over last year.
But to conclude that "whoever gets the script wins" is a one-sided analysis.
In traditional film and television works, the script is the creative blueprint of the work, but in the AI short drama industry, the script is more like a standardized production mold. This mold does not depend on literary quality, but on whether it can be dismantled and reused: the world view must be large, new plots can be continuously expanded, the conflict density must be high, there must be an emotional outburst within 3 minutes of each episode, the structure must be standardized, it can be produced in seasons, it can be translated into multiple languages, multiple teams can work at the same time, etc.
In other words, the real value of a popular online article is that it has been screened by millions of readers, verifying which emotions can make people pay again and again. Following this logic: If scripts are really the core competitiveness, then China Literature, Tomato, and Qimao, which have the largest IP reserves, should be sure to win.
But the actual situation is that IP parties are expanding into downstream production links.
China Literature invested in the leading AI production company Soy Sauce Culture in January 2026, increasing the content creation of all animation categories, and also set up a "Comic Assistant" service specifically for comics; Qimao and Zongheng still use the IP library-based logic of the free reading era, using a guaranteed minimum bonus model to attract producers to cooperate.
The position of scripts in the AI production process has also changed.
In the era of live-action dramas, screenwriting is the starting point for content creation. The production of AI short dramas works backwards from the post-production stage. The editor first determines what scenes are needed for each segment, and then goes back to dismantle the script and generate materials. The script has changed from "blueprint" to "material list".
At the same time, the DataEye report shows that the number of active manufacturers in the midstream of the industry has dropped from 1,216 to 698, a decrease of 42%. The unit price of the manufacturers has been reduced to 300 to 500 yuan per minute, and the net profit margin of the OEM is only 5% to 8%. The more standardized the production molds are, the narrower the living space of pure OEMs will be. This also answers the question left in the previous section: How big Kuaishou’s shovel-selling business can be depends on how much profit the person holding the shovel has left.
Therefore, the essence of the script battle is not who has stronger creative ability, but who can turn the story into a standardized asset that can be authorized, renewed, and reused in batches, so as to maintain profit margins in a market with oversupply.
Once the content assets are created, they need to find a place to monetize them, which brings us to the third battlefield.
03 Settlement rules are the key to success
The entrance battle in 2026 is divided into two paths.
One is an independent APP.
QuestMobile data shows that Hongguo had 168 million daily active users in July, an increase of 107%, which is more than the combined daily active users of iQiyi, Tencent Video, Youku, and Mango TV. In September, the monthly active users reached 430 million, and the average daily usage time per person per month was about 151 minutes. This set of figures shows that as long as the content is cheap enough and the supply is sufficient, short dramas can escape from a bunch of content categories and grow into independent consumption scenarios rather than subsidiary columns of a certain platform.
The other one is ecological embedding.
Tencent's Green Bubble short drama does not have a separate APP and runs directly on WeChat. It had 143 million monthly active users in August and 89.68 million weekly active users in the first week of October, a month-on-month increase of 44.1%. Users can search, watch, and share in WeChat without leaving the entire process.
Baidu Wenju Hui takes the form of a mini program, packaging short plays and comics for advertising and monetization. While Kuaishou manages the traffic of short dramas on the main website, it also opens up an independent Xifan position.
Each of the two routes has its own ledger. The advertising inventory, user duration, and algorithm recommendations of independent APPs are relatively controllable, but it is expensive to acquire users and difficult to retain users. Mini programs have low customer acquisition costs and rapid social growth, but their duration and advertising space are limited by the host ecology, and they essentially have to pay rent to the host.
Therefore, the first level of the entrance battle is a competition between download and click efficiency. The winner is the customer acquisition cost and per capita time, not the DAU (Daily Active Users) ranking list.
So, the real key lies in the settlement rules.
Regarding the split income of content providers, the basic calculation method commonly used in the industry is: (new viewing time) * (basic time unit price) * (content type coefficient) * (copyright coefficient) * (incentive coefficient) * (completion and replay correction coefficient). But there will also be some subtle differences and fine-tuning. For example, AI dramas will have an additional "painting style coefficient". This coefficient has been adjusted three times in the first half of 2026.
This calculation method means that the platform does not need to buy out copyrights to control supply. It only needs to move the coefficient to determine what and how much is produced in the market. This is the true meaning of "entrance": the entrance is not a faucet, but a water price list, and the company with a fixed coefficient is the banker.
Therefore, what the platform really holds in its hands are three things: what content can be put online, how much traffic it can get after it goes online, and what proportion it will be settled at. This also explains why these four major manufacturers appear to be moving very differently, but are actually putting together the same puzzle.
Competing for scripts or seizing the entrance to next-generation traffic are essentially just means. Scripts are production materials that can be copied, and entrances are distribution channels that can be negotiated. What is truly scarce and cannot be copied is the power to set prices for all of this.
Whoever controls the settlement coefficient will simultaneously decide what to write in the upstream, what to shoot in the midstream, and how much to earn in the downstream. This is probably the most noteworthy point in this melee: On the surface, the four major manufacturers are competing for user time, but in fact they are competing for the right to fill out a form. For others in the content industry, what they need to think about is not just “which platform to cooperate with,” but also how they can survive when the pricing power is completely out of their hands.
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