BEIJING, April 21 (Xinhua) -- China's fast-growing micro-drama industry is entering a new phase as AI begins to challenge a production model built on speed, low cost and tightly packed studio sets.
In recent years, clusters of compact filming bases have emerged across the country, especially in second and third-tier cities. Built around vertical-screen production, low costs and quick turnaround, they are informally known as "vertical studios," or "shudian," a play on the country's well-known film production center Hengdian, as the Chinese characters "shu" and "heng" literally mean vertical and horizontal, respectively.
Within a single site, sets for banquet halls, mansions, hospitals, or subway platforms can sit side by side, allowing crews to shoot scenes in quick succession.
At Dazhi Film and Television Base in Jinshui District of central China's Zhengzhou City, more than 50 sets are spread across just over 10,000 square meters. "Directors can arrive with just a script. Everything else can be handled on site," said Zhao Jianting, who is in charge of the base. Since its trial operation in April 2025, it has served more than 2,600 production teams.
The model has helped drive the rapid expansion of micro-dramas. In Jinshui District, producing a 100-episode series can cost between 300,000 and 800,000 yuan (about 43,700 to 116,600 U.S. dollars), with a return cycle of three to six months, according to a local official.
The boom has also reshaped urban space and employment. Idle buildings, including unfinished projects and vacant exhibition halls, have been turned into filming locations. According to estimates by Peking University's National School of Development, the sector directly employed about 690,000 people in 2025 and generated a total of 2.03 million jobs.
For some, it has opened a new path into the industry. Xu Yan, who entered the micro drama industry in Xi'an in northwest China's Shaanxi Province two years ago, said the transition from a background extra to a speaking-role performer took just three months. "Even though I was already 36 when I joined, my experience shows that with effort and persistence, it is still possible to gain a foothold in a new field," Xu said.
However, the same features that helped micro-dramas expand quickly -- low barriers and fast production -- are now being tested by a technology that lowers them even further.
After this year's Spring Festival, some filming bases saw a drop in active productions, leaving some workers without projects. Industry insiders point to the rapid advancement of AI-generated video technology.
"If last year we saw AI as a wave approaching from afar, now it is sweeping across every corner of the film and television industry," said Feng Shengyong, an official with the National Radio and Television Administration.
According to industry participants, more advanced AI models have pushed the usable rate of generated footage above 90 percent. A director who likes to be called Qiu Qiu and has shifted from live-action to AI-based production said that when quality is comparable, AI dramas may cost only about one-tenth as much as traditional shoots, while taking far less time.
The shift is already visible in the output. According to DataEye, a leading industry data platform, more than 10,000 AI-generated animated micro-dramas have gone online each month since the start of 2026. In March alone, about 50,000 new AI-native titles were added on Douyin, the Chinese version of TikTok.
For genres such as mythological fantasy and historical stories, AI offers clear advantages, enabling visual effects that would otherwise be difficult or costly to achieve.
Yet lower costs have not resolved a more persistent challenge, which is quality.
Industry observers say AI-generated micro-dramas still vary widely, with intense competition at the lower end and significant content homogeneity. "AI-generated videos still show clear gaps in understanding human behavior," said He Tianping, an associate professor at Renmin University of China's School of Journalism and Communication. "Characters may lack coherent logic, and visuals can appear inconsistent."
As a result, attention is shifting back toward storytelling itself.
On April 5, an AI-produced micro-drama topped the popularity rankings on Hongguo Short Drama, a Chinese short drama platform under ByteDance. Notably, audience discussion focused less on technical flaws and more on storyline and presentation.
"AI can calculate audience preferences, but it is difficult to calculate emotional resonance," Feng said. "The works that people remember are often not the most sensational, but the most authentic."
Since 2025, authorities have refined oversight and review mechanisms for micro-dramas, while platforms have adjusted support and revenue-sharing policies to encourage more diverse content. Some production companies are also moving beyond formula-driven plots toward themes such as rural revitalization, cultural heritage and personal growth.
"True competition is decided by content that moves people," said Liu Tengyuan, founder of a Zhengzhou-based film company, which is now working with universities to improve scriptwriting.
Platform players are sending a similar signal. "In 2026, we will continue to increase investment in content and support innovation," said Le Li, editor-in-chief of Hongguo. The company plans to raise its overall content budget by more than 40 percent this year while maintaining investment in live-action micro-dramas.
Meanwhile, some "shudian" are exploring new directions. In Zhengzhou, the Dazhi base plans to launch immersive programs during the upcoming May Day holiday, allowing visitors to step into scenes and take part in productions.
As production becomes faster and cheaper, China's micro-drama industry is entering a new round of competition in which scale and speed still matter, but content remains decisive.
"With AI providing support and live-action production serving as the foundation, their combination could help push the micro-drama industry toward a new stage that is more efficient, more diverse and more creative," said Zhang Yongqiang, secretary-general of the Henan Higher Education Film and Television Education Association. ■
