China’s AI short-drama boom produced 221,900 titles in the first half of 2026, but nearly all of them lost money, according to statistics cited by The Paper. The report said 98.7% of the works were unprofitable even after generating a combined 515.738 billion views, showing that traffic alone did not translate into returns. On average, only one out of every 77 titles was able to cover its costs. DataEye vice president Lin Qiwen said many industry participants had expected AI to lower production barriers, but the same shift also caused creators to lose money faster. DataEye’s report showed AI live-action-style dramas surged from March, with their share of new releases nearing 65% at one point. Yet audience traction weakened, with the category’s share of total views falling from a peak of 80% to 68% in June. The expansion also coincided with a sharp decline in live-action short dramas. New live-action releases on the Hongguo short-drama monthly ranking dropped from 432 in February to 110 in June. Regulators have moved on both fronts: China’s National Radio and Television Administration published a support plan for premium live-action micro dramas on May 14, backed by at least 6 billion yuan from six major platforms, while also introducing review requirements for AI short-drama output through separate rules.