by SHEN Xiaoge
China's booming short-drama industry has a new villain: AI-generated costume dramas made with stolen faces, awkward fake actors and plots so chaotic that even the platforms hosting them are starting to push back.
At Douyin Group's first short-drama industry conference on Tuesday, Hongguo Short Drama, the fast-growing app that has become one of China's biggest entertainment platforms, announced a new round of incentives for live-action productions, including up to 1.5 million yuan ($208,000) for top titles, higher revenue-sharing payouts and dedicated funding for genres such as suspense and urban realism.
A company representative said Hongguo's guaranteed support budget for live-action productions in 2026 would exceed 1.5 billion yuan, with average guaranteed funding per title rising about 60% from last year.
Officially, the company says the push is about improving quality as audiences shift from "traffic-driven" viewing toward stronger storytelling. But it also reflects mounting pressure across China's AI-content ecosystem, where cheap generative tools have made it possible to churn out dramas at industrial speed.
Hongguo's support for live-action productions has been building for more than a year. In late 2024, the platform launched the "Guoran Plan," offering investment support of up to 2 million yuan per project for high-quality live-action dramas, alongside traffic promotion and guaranteed revenue-sharing arrangements. This year, it expanded those efforts with new user-acquisition incentives and higher script payments, as platforms increasingly compete for professionally produced content rather than sheer upload volume.
Over the past year, AI-generated short dramas have multiplied rapidly on Chinese platforms. Many rely on synthetic actors or manipulated facial images to mass-produce historical romances, revenge sagas and fantasy plots engineered for algorithmic engagement.
The economics are difficult to ignore. Traditional productions still require actors, costumes, sets and crews. AI-generated series can be made far more cheaply and released in huge volumes.
The results, however, have increasingly drawn criticism.
In one recent controversy, a Hanfu stylist and influencer accused an AI-generated costume drama called The Peach Blossom Hairpin of using her photos without permission to create a villain character portrayed as overweight and vulgar. Another model later made similar allegations.
The dispute quickly trended across Chinese social media, fueling broader debate over AI likeness infringement.
Hongguo later removed the series, saying the producer failed to provide sufficient evidence that the source materials had been legally authorized. The platform also suspended the studio behind the show for 15 days.
The company says it has since reviewed around 15,000 AI-related productions and taken action against hundreds found to violate platform rules.
The episode highlights a broader turning point for China's short-drama industry, which grew explosively through cliffhangers, exaggerated acting and ultra-short episodes optimized for smartphone viewing. Platforms are now competing not only on scale, but also on whether they can convince advertisers, regulators and audiences that the format can mature beyond pure algorithmic entertainment.
That helps explain why Hongguo's latest funding push favors grounded genres and live-action storytelling. Executives at the conference repeatedly emphasized emotional realism and human connection — qualities many viewers still find missing from fully AI-generated productions.
Hongguo, launched by ByteDance in 2023, has grown into one of China's dominant short-drama apps. QuestMobile data showed the platform had more than 304 million monthly active users in February, with average daily viewing time exceeding two hours.
Even in China's crowded attention economy, that is enough screen time to make the battle over synthetic entertainment increasingly hard to ignore.
