# interactive drama

China’s AI Short‑Drama Boom Enters a ‘Deep‑Water’ Phase as Hit Rates Collapse

Rapid advances in AI video tools have slashed production costs and unleashed a surge of short animated dramas in China, but oversupply has driven hit rates below 5% and forced the industry out of its early ‘easy‑money’ phase. The market is now shifting from volume to IP‑driven, platform‑bound business models, with interactive formats, overseas distribution and B2B brand work seen as the most promising routes to sustainable revenue.