Author｜Wuta

Editor｜Li Xiaotian

This year, in June, Mandy made the move from Atlanta to Los Angeles. Her rent jumped from $1,800 to $2,600 per month, and she transitioned into the role of an independent short drama director.

The reason for her relocation was straightforward: Atlanta simply didn't offer enough opportunities.

Towards the end of 2023, a film school classmate invited Mandy to co-found a startup, where she would collaborate with their production company as a producer on a project-by-project basis. At that time, short dramas were still a relatively new phenomenon in the U.S., with production roles predominantly occupied by Asians and only a handful of American crew members. Back then, Mandy's work-life balance was "just right."

"I studied in Atlanta, a burgeoning hub for film and TV production in North America that attracted numerous production crews, so I decided to stay after graduation. However, for creative professionals like myself, opportunities were scarce," Mandy reflected.

Starting in May or June of this year, job openings in the industry saw a sharp decline. Mandy observed that clients, platforms, and short drama companies she had been in touch with in early May were still hiring and expanding. Yet, by June, nearly all such activities had come to a grinding halt.

The underlying cause was unmistakable: many industry practitioners were going "all in on AI."

As AI drastically reduced production costs, live-action crews found themselves at a standstill. However, the influx of AI teams did not lead to easy success: revenue-sharing ratios plummeted, competition intensified, and despite seemingly low barriers to entry, profitability remained elusive.

Amidst this industry reshuffling, questions arose: Who managed to secure new positions? Where do the true barriers lie in the realm of AI short dramas? And where will the next battleground emerge?

Overseas Expansion of Short Dramas: Live-Action Fades, AI Faces Challenges

The displacement of live-action short dramas by AI is starkly evident in the financials of public companies.

According to DataEye Research Institute, Jiuzhou Culture's AI dramas and comic adaptations now account for 95% of its total output, with 1,399 new titles produced and broadcast in March 2026 alone. Kunlun's Tiankong AI Native business surpassed $800 million in Annual Recurring Revenue (ARR) in the second quarter of 2026, with its AI short drama platform contributing over $700 million. Over 80% of the new content on its DramaWave platform is AI-generated.

Chinese teams are rapidly expanding their reach in AI short dramas on a global scale, while overseas live-action productions remain mired in difficulties, struggling to find breakthroughs.

Cecilia, the head of U.S.-based Crazy Stone Pictures, noted that after the second quarter of 2026, overseas live-action short drama projects declined by at least 30-50% year-on-year.

Short drama actress Blake Manning shared with Business Insider that she was cast in April but later informed, "You've been replaced by AI." Another star, Rebecca Berg, experienced an even sharper drop: her weekly audition calls fell from 20-30 to single digits after early June.

The shift was driven by considerations of cost and efficiency, making it almost inevitable.

Wang Wenjin, the founder of Haoli Media, revealed that her first short drama cost $110,000 in 2023. By January 2025, production costs had nearly doubled to $200,000.

Mandy noted that while overseas short drama crew wages had not surged, actor salaries constituted the primary cost driver. This year, she encountered actors demanding $3,000 per day—far exceeding the industry standard of $1,000. Producer Linda added that an actress who charged $800/day in 2023 commanded $1,500/day by mid-2025.

Vanessa von Schwarz, an actress who rose to fame through short dramas

In North America, actors' working hours are somewhat protected. While some projects operate non-union, adult performers generally adhere to rules limiting workdays to 12 hours and mandating 12-hour breaks between shifts. Under these rules, Mandy's longest short drama shoot spanned 13 days; the shortest, 6 days.

Multiple industry insiders revealed that overseas live-action short dramas typically cost $150,000, while AI versions cost a mere tenth of that.

In her first three months in Los Angeles, Mandy secured two projects. Her daily pay rose slightly, but the volume of projects halved, and she now pays 23-30% in taxes. "Some work expenses are tax-deductible, like gas for driving to sets," she mentioned.

Despite the decrease in projects, Mandy has no regrets about moving to Los Angeles. "This may just be a transitional phase. If I'd stayed in Atlanta, I'd have even less work," she said.

But are AI short dramas, which are squeezing out live-action productions, faring any better?

Not really.

In July and August, the industry was shaken by a seismic shift: TikTok altered its short drama revenue-sharing model.

Data showed that TikTok's local dramas generated over $24 million in August, with AI titles surging 55% to record highs. Yet, many creators saw their payouts plummet, sparking debates across groups and social platforms about "insiders, outsiders, and fringes."

"300 million views, $20,000 payout—overseas team disbands immediately."

"Same show earned two-thirds less than in July."

"$10 per 10,000 views is high for this industry."

Deng Chengye, CEO of AI short drama exporter Qiyun Gongfang, cited a range: "Initially around $30 per 10,000 views, it suddenly dropped to a few dollars. This collapse affected many early AI short drama exporters."

Another entrepreneur lamented, "TikTok's deception has sparked widespread skepticism about this industry."

Competition within the sector has also intensified.

When bidding for a DND (Dungeons & Dragons) project this year, Deng faced six competitors. The project required full-English presentations—directors had to explain their vision for plot, visual style, and production—and produce a demo within three days.

Who Occupies the New Niches?

The industry remains flooded with followers. After speaking with multiple practitioners, a consensus emerged.

Yet, while followers cluster at the gate, serious players are forging their own paths outside. The greatest misconception? Confusing "easy entry" with "easy profits."

While many entrepreneurs still approach AI short dramas with a live-action mindset, focusing on "making AI perform more like humans," the overseas AI short drama ecosystem is already being divided among several forces.

First are Chinese teams, which are forming new industrial clusters domestically. Just as live-action short dramas reshaped entertainment geography—spawning hubs in Zhengzhou, Ningbo, and Xi'an—AI short dramas have created a new "Four Little Dragons": Hangzhou, Chongqing, Nanchang, and Wuhan. Scriptwriting leans toward Hangzhou and Chongqing; production favors Zhengzhou, Nanchang, Chongqing, and Wuhan. "Wuhan, in particular, benefits from its animation school supplying local talent," noted an industry expert.

Beyond Chinese teams, two other forces dominate overseas niches: mature local transition teams and AI-native entrepreneurs. "Outside China, the U.S. leads in AI short dramas," Deng told Xiaguang Society.

Among transitioning teams, digital publishing platform Inkitt stands out. Founded in Berlin in 2013, it now has offices in Berlin and San Francisco. Its short drama app CandyJar claims AI cuts production costs by 99%; sister company Ironblood specializes in male-targeted action AI short dramas, training real actors for micro-expressions to complete a title in 3-4 weeks for under $60,000.

According to DataEye's H1 2026 report, CandyJarTV ranked among the top 20 overseas micro-short drama apps by in-app purchase revenue, alongside Ukraine's My Drama, South Korea's Vigloo, and Israel's Shortical.

AI-native entrepreneurs include 25-year-old Cecilia Shen, a former Google engineer who founded "the world's largest independent AI-native film studio," Utopai Studios. Its website declares: "Next-generation studio. Human-directed. AI-powered."

Screenshot of Utopai Studios' website

Utopai Studios pursues a high-profile strategy: debuting at Cannes' MIPCOM opening ceremony and collaborating with Oscar-nominated Antonio Banderas. Forbes reports its valuation at $1 billion—the highest publicly reported for a pure AI film studio to date.

This underscores how overseas locals and international giants are entering the fray, ending the era of Chinese dominance and ushering in a "Warring States" period of global competition.

The Hottest—and Most Expensive—Genres

Werewolves and alpha males remain runaway hits overseas.

The appeal of werewolves stems from their deep-rooted cultural DNA.

One of the earliest werewolf tales appears in the Epic of Gilgamesh, where the goddess Ishtar transforms a shepherd into a wolf. Herodotus recounts a Neuri tribe legend of annual wolf transformations in The Histories, though he disbelieved it. In early modern Europe (15th–17th centuries), werewolf myths intertwined with witch trials, with some accused of consorting with demons and executed.

Initially paired with horror, the genre shifted after Twilight (2008) grossed $393 million globally and spawned four sequels totaling $3.3 billion. The franchise's romanticized werewolves became a staple.

Twilight movie poster

While wildly popular, such fantasy content is also the most costly to produce.

Deng told Xiaguang Society his team "drew cards" (generated variations) over 20 times for a werewolf scene earlier this year.

In October, an AI short drama executive calculated costs: 720p videos cost $1.5–1.6/second in model fees, or $90/minute. With three "draws" per shot, compute costs near $300/minute. Thus, early-year werewolf AI short dramas faced even higher costs.

Chinese online literature giant COL disclosed at a June 3 Beijing roadshow and online call that "AI short dramas and video generation account for 55% of all domestic token consumption." COL attributed this to AI virtual human dramas increasing token usage compared to comic adaptations, as production requires constant "drawing" to select ideal shots, driving sustained consumption.

The China Academy of Information and Communications Technology's Token Economy Development Research Report (2026), released on September 30, cited the same 55% figure for AI short dramas' industry-wide token share.

"Despite technical advances and asset libraries improving accuracy, natural light scenes remain challenging," Deng admitted.

Another intriguing point: AI overseas short dramas may have an untapped niche.

Culturally, werewolves' vampire counterparts also carry hit potential. Yet no true blockbuster has emerged in this subgenre despite recent hype.

Genres have hot and cold cycles, but the race has no finish line—the next AI short drama sensation may hide in an ancient, unexplored myth.

Why is Latin America the New Battleground for AI Short Drama's Global Expansion?

In terms of views and payments, Latin America has been a standout region over the past year.

"Actually, during the era of live-action short dramas, Latin America already delivered strong data. However, with the democratization of AI technology, the barrier to localization in Latin America has rapidly decreased. As more people enter the market, there have been more hits," Deng Chengye explained.

Specifically, three structural forces are driving the booming short drama market in Latin America:

First, Latin America has one of the highest smartphone penetration rates in the world: GSMA predicts that smartphone adoption in the region is approaching 80%, while fixed broadband remains limited in many areas. As a result, mobile phones are the primary device for internet access and content consumption, making them a natural fit for the popularity of short dramas.

Second, since television became widespread in Latin America in the 1950s, TV dramas have become a familiar companion for local audiences. They have shaped regional identity, weaving love, conflict, and social issues into daily viewing habits. Unlike Western soap operas, which unfold slowly over years, Latin American TV dramas typically complete a full, dramatic storyline within a hundred or so episodes, featuring forbidden love, hidden identities, and dramatic resolutions. They are not just entertainment but a shared language among the people.

The popularity of TV dramas in Latin America is closely tied to the region's strong Familismo (familialism) culture. As British cultural and media studies scholars noted in their book Family Television, television was originally a family ritual medium centered in the living room, meant to be watched together by the entire household. Its existence presupposes a unified nuclear family and fixed shared family time.

Specifically, 69% of iPhone users and 68% of Android users reported engaging with short dramas through subscriptions, one-time purchases, or in-app payments. In certain markets, iPhone users were more inclined to pay for micro-short dramas, thereby challenging prevailing industry stereotypes about the audience demographic.

The burgeoning potential of the Latin American short drama market has also drawn the attention of Chinese platforms expanding their overseas presence.

PineDrama, a platform incubated from TikTok's operations, made its debut in late 2025 in the United States, Latin America, Indonesia, and other regions. It offers short dramas for free, with a particular emphasis on "overseas local productions".

Local productions are crafted by overseas teams in the native languages of the target markets, thus eliminating the need for translation. Another strategy involves "translated dramas", which entail exporting Chinese short dramas after translation. These two approaches follow distinct trajectories: local productions frequently adopt a paid viewing model in Europe and the United States, while translated dramas predominantly find their audience in Southeast Asia.

On October 14, Sensor Tower, an overseas mobile data research firm, released estimates indicating that PineDrama had surpassed 100 million downloads and boasted approximately 7 million daily active users less than a year after its launch.

In addition to PineDrama, other leading platforms are intensifying their efforts in Latin America. ReelShort co-produced Spanish-language originals with Colombia's Caracol TV and launched locally produced series in Argentina. DramaBox initiated local productions in Mexico, Colombia, and Brazil, initially focusing on adapting existing scripts.

The expansion is not limited to Chinese platforms; Latin American traditional media groups also launched vertical-screen content platforms in 2025 and 2026. For instance, Brazil's Globo introduced GloboPop, TelevisaUnivision, the world's largest Spanish-language media company, launched ViX MicrO, and Chile's Mega TV introduced MegaShorts.

Moreover, emerging short drama startups within the Latin American cultural sphere represent a growing force. Platforms such as Shorta, the first original vertical-screen series platform in Latin America; Idilio TV, founded in 2025 and led by a16z Speedrun; and TeleReels, specifically tailored for Hispanic and Latino audiences, are proliferating.

In this wave of expansion, Chinese entrepreneurs are also key participants. TeleReels is a prime example of a short drama team built by a Chinese entrepreneurial team. CEO Leky Lin, born in China, grew up in Argentina, and received his education in the United States, is an award-winning producer with over a decade of experience in international film, television, and media management. COO Moon Zhang, a seasoned screenwriter, oversees content IP acquisition and planning, while CTO Samuel Zhang has served as an engineering lead at consumer platform companies like Airbnb and Microsoft.

Conclusion: The Other Side of AI's Rise

Meanwhile, Mandy's friends are attempting to "escape" the industry, with some transitioning into advertising and others venturing into independent filmmaking.

Recently, there have been notable successes in independent filmmaking in North America. For example, the true-crime documentary You Can See Everything, secretly produced over three years, narrates the story of the 34 days before and after the imprisonment of Elizabeth Holmes, founder of the notorious Silicon Valley fraud Theranos, in 174 minutes. The film received widespread acclaim following its "secret surprise screening" at the Telluride Film Festival. It is rumored that the filming was initiated by the Holmes couple, who invited U.S. independent film company A24 to document their story.

"Currently, the independent film ecosystem in North America is relatively well-established and shows no signs of being 'invaded' by AI, so it's understandable why people are transitioning," Mandy observed.

Regarding the future, Mandy expressed her desire to focus on what she can do in the present. "The industry is evolving so rapidly. In just two years, we've witnessed the rise of short dramas to prominence, their hosting of lavish events, and subsequent collapse. Everyone in the industry is still exploring, and there's no clear conclusion yet."

From the mass suspension of live-action productions to the revenue fluctuations of AI short dramas; from the migration of Los Angeles directors to the emergence of new teams at animation schools in Wuhan—the 2026 global expansion of AI short dramas resembles a fast-forwarded industry documentary. Some see opportunity, others see a bubble, some turn away, while others strive within the bubble.

No one can provide a definitive conclusion about this industry. Nevertheless, new foundations are being laid. There is no standard answer for AI short dramas going overseas, but they are rapidly developing their own unique solutions.