I came across a fascinating article from Economic Observer about a short-drama actress whose career was booming just a few months ago, and who now suddenly can’t find work. The anecdote is compelling, but the bigger point is the industry data behind it. According to the piece, after Chinese New Year 2026, live-action short-drama production volume dropped by 50%. Over the holiday period, AI-generated dramas accounted for 29.4% of total short-drama views, with total views reaching 8.67 billion. And of those AI views, more than 80% went to photorealistic AI dramas, meaning not anime-style content but something much closer to live action.

The economics are pretty brutal. The article says AI photorealistic dramas can be made at roughly one-tenth the cost of live-action and with an 80% shorter production cycle. At the same time, platforms are not just passively allowing this shift, but actively encouraging it. One director cited in the piece says Hongguo (ByteDance) is offering guaranteed minimum payouts of RMB 3,000 to RMB 30,000 ($436 to $4,360) per AI photorealistic drama, while live-action support is being adjusted in ways that push it toward higher-quality productions. Baidu, Kuaishou, and Migu are also said to be investing heavily in AI short dramas.

What makes this more striking is that this disruption is hitting an industry that was still growing very fast. The article says China’s domestic short-drama market grew from more than RMB 30 billion ($4.4 billion) in 2023 to over RMB 100 billion ($14.5 billion) in 2025. So this is not a story about AI replacing labor in a stagnant market. It’s a story about AI beginning to replace labor in a market that was still exploding. If you want to read the original, it’s linked in the comments.

Rui