As the dividends from livestream e-commerce gradually fade, Douyin and Kuaishou are searching for new revenue streams.
In the past, users were keen to camp out in livestream rooms to shop, and livestream e-commerce once became the core revenue pillar of major platforms. But nowadays, growth in livestream e-commerce has slowed, and the time users spend in livestream rooms is also declining.
At the same time, short dramas — with their tight pacing, addictive plots, and strong immersive feel — have attracted a huge number of users. According to the latest report from QuestMobile, the number of short drama users in China has reached 718 million, with the average user watching over two hours per day.
These addictive short dramas not only capture users' attention and strengthen their loyalty, but also unlock enormous commercial monetization potential. DataEye Research Institute estimates that by 2026, the market size for micro‑short dramas and comic dramas in China will conservatively exceed 120 billion yuan.
With the prospects of this hundred‑billion‑level blue‑ocean market clearly bright, short dramas are becoming the next battlefield for Douyin and Kuaishou as they compete for new growth drivers. To seize this new wave of opportunities, both platforms have recently invested heavily — putting up over 10 billion yuan in funds and resources — to aggressively double down on the short drama track.
1. Douyin supports live‑action short dramas with over 1.5 billion yuan
Recently, the Douyin Group Short Drama Copyright Center held its first Short Drama Industry Conference. At the conference, Hua Yuesheng, the relevant director, clearly stated:
"In 2026, the guaranteed support budget for live‑action short dramas will exceed 1.5 billion yuan, and the average guaranteed amount per drama will increase by about 60% compared with last year."
Source: Douyin
Meanwhile, Sui Yifei, head of operations for Hongguo Short Dramas, revealed that in 2026, Hongguo will also provide 30 billion in traffic incentives and tens of millions in promotion investment to support quality works.
It is worth noting that in April, at the 3rd China Online Audiovisual Conference 2026, Douyin Group had just announced a special fund of 500 million yuan to support live‑action short drama content and in‑depth development of realistic themes.
Within just these two months, Douyin has continued to increase its financial investment in short dramas, while placing special emphasis on "live‑action short dramas" and "quality works."
This move by Douyin should have reassured many short drama actors. That's because the recent prevalence of AI‑generated short dramas had made many actors worry that they would be replaced by AI, leaving them with "no roles to play" and "no way to make a living."
But now, Douyin has used real money to show its stance — and there are multiple reasons for this.
There is no denying that the AI wave has pressed the "fast‑forward button" for the short drama industry, especially by dramatically boosting content production efficiency. Data shows that in the first quarter of 2026, about 128,000 micro‑short dramas were launched across the industry, of which approximately 122,000 were AI‑generated — meaning AI accounted for over 95%.
This share is astonishing. At first glance, AI short dramas seem to have become the absolute mainstream in the industry. But is that really the case? Let's look at another set of data: during the 2026 Spring Festival holiday, the total number of views for live‑action micro‑short dramas was 25 times that of AI‑generated dramas in the same period.
The stark contrast between these two data sets speaks volumes: AI short dramas win on production capacity, but live‑action short dramas win people's hearts. As Le Li, editor‑in‑chief of Hongguo Short Dramas, put it, the value of live‑action short dramas lies in their ability to stay rooted in life and resonate emotionally with audiences. The genuine feelings they convey are the core that enables the industry to move forward steadily.
Furthermore, AI short dramas generally face problems of homogenization and formulaic plots, with some even lacking any bottom line. For example, an AI short drama titled "Transmigration and Counterattack: A Two‑Way Journey" featured the absurd premise of a female lead giving birth to 999 children within eight hours. The drama was widely condemned across the internet and was eventually taken down by regulators.
Source: Douyin
Such sensational content challenges public order and good morals, triggers user aversion, and ultimately damages the platform's content ecosystem — it should not exist at all.
AI short dramas have the advantage in quantity, but their quality lags behind. Live‑action short dramas, though fewer in number, are more likely to become high‑quality works and have secured a market foothold through their superior quality. A series of data released at the conference also confirmed the vigorous development of live‑action short dramas.
Statistics show that the total time spent watching live‑action short dramas nearly tripled within one year. More than 1,100 live‑action short dramas have exceeded 1 billion views across all platforms. The number of content categories expanded from 44 last year to 65, and the share of viewing time for series (sequel‑type dramas) rose from 6% to 15%.
Undoubtedly, these high‑quality live‑action short dramas have effectively increased user dwell time and loyalty, while also laying the groundwork for subsequent monetization. Within the Douyin and Hongguo Short Dramas ecosystem, this monetization system has already proven successful, forming a mature model of "advertising as the foundation, e‑commerce for explosive growth, and revenue sharing for a stable ecosystem."
Hongguo Short Dramas uses a "free viewing + ad‑based unlocking" model, covering opening splash ads, mid‑roll ads, and incentivized video ads. Relevant data shows that advertising revenue in 2025 was about 20 billion yuan.
At the same time, Hongguo Short Dramas has set up its own independent e‑commerce department and integrated with Douyin's e‑commerce supply chain. When users watch short dramas, the playback page uses AI to recognize products and displays a "find similar" button, enabling them to shop while watching.
In essence, retaining attention means retaining every commercial possibility. Douyin is precisely targeting and deepening its efforts in high‑quality live‑action short dramas to create a unique content differentiation barrier.
By continuously attracting users to stop and immerse themselves in watching high‑quality content, Douyin firmly holds onto attention resources, building a solid foundation for subsequent diversified commercial monetization.
2. Kuaishou invests more than 2 billion yuan of resources to double down on short dramas
While Douyin is spending heavily on short dramas, Kuaishou, also a content platform, has revealed its own bet.
Recently, the 2026 Kuaishou Magnet Engine Content Consumption Business Conference was held in Changsha. At the conference, Kong Hui, a relevant director, disclosed that in 2026, Kuaishou plans to invest 800 million yuan to explore diversified revenue‑sharing models, another 200 million yuan in cash to incubate premium drama series, and 1 billion in exclusive traffic to incentivize high‑quality short drama content.
It is not hard to see that Kuaishou is also focusing on quality short dramas. However, some might wonder why Kuaishou is putting most of its funds into diversified revenue‑sharing models.
Essentially, this is to increase both supply quantity and quality. The more revenue sharing, the more content — and the better the content. Kuaishou uses "guaranteed income" to stabilize creators and seek long‑term cooperation. At the same time, supported by a steady cash flow, creators can focus on their craft, daring to write, film, innovate, and consistently produce high‑quality content, thereby capturing users' attention.
Kuaishou's bold investment is thanks to the outstanding results it has already achieved in short dramas.
Data shows that as of April 2026, the average daily exposure of Kuaishou's short drama content reached 129 million, and users spent an average of 29 minutes per day watching short dramas. Over the past year, the supply of short dramas on Kuaishou grew eight‑fold, the number of advertising customers increased 2.6‑fold, and ad spend on comic dramas grew nearly 20‑fold in the past six months.
It is worth noting that Kuaishou specifically highlighted the advertising contribution of comic dramas. At the same time, the conference clearly stated that Kuaishou aims to empower the short drama content industry with AI, building a positive cycle where "creation generates income, users are engaged, and monetization becomes more stable."
Unlike Douyin, which this time is going all in on live‑action short dramas, Kuaishou — while also deeply cultivating the high‑quality live‑action short drama track — is simultaneously vigorously supporting the growth of AI comic dramas. With a dual‑engine model of strengthening the foundation with live‑action dramas and opening up a new arena with AI comic dramas, Kuaishou demonstrates a long‑term vision and huge growth ambitions.
There is no denying that the industry is currently plagued by various AI short drama excesses, with crude, low‑quality content emerging endlessly. However, AI comic dramas are fundamentally different from ordinary live‑action short dramas: they are presented in an animated visual form, which inherently imposes higher requirements on content generation technology, visual quality, and narrative coherence. And Kuaishou, with its self‑developed Kling AI model as a core asset, enjoys unique technological advantages.
High‑quality AI comic dramas indeed bring new growth to Kuaishou. Statistics show that the overlap rate between paying users of Kuaishou's comic dramas and paying users of its live‑action short dramas is 38%, indicating extremely high user expansion value and commercial growth potential.
Whether live‑action or AI comic dramas, quality is essential for capturing users' attention. Good content not only retains users but also generates commercial returns. Kuaishou primarily monetizes its short dramas through three channels: brand customization, integration with livestreams, and collaboration with external e‑commerce platforms.
Source: Kuaishou
Facing the hundred‑billion‑level blue‑ocean track of short dramas, although Douyin and Kuaishou have slightly different focuses in their development, both are making heavy investments and concentrating on premium short dramas.
This strategy is driven, on the one hand, by the need to keep pace with industry regulation. In 2026, the National Radio and Television Administration is promoting a plan for the creation and dissemination of high‑quality micro‑short dramas, setting a clear goal of producing 1,000 premium short dramas throughout the year, while also cracking down hard on vulgar, sensational, rule‑bending, and falsely advertised content. Since the beginning of this year, Douyin and Kuaishou have already taken down many non‑compliant short dramas.
On the other hand, it is the inevitable direction of the industry's development. The short drama market has long left behind the phase of crude, unbridled growth and has officially entered the deep waters of quality improvement, efficiency enhancement, and survival of the fittest. The old models that relied on eye‑grabbing sensationalism, formulaic plots, and gimmicks no longer work. Public tastes continue to evolve, and the demand for high‑quality content is stronger than ever.
The market has already changed. Platforms and industry participants must move with the times, adhering to a strategy of premium, high‑quality content creation in order to achieve long‑term, stable development.