China’s short-drama producers are flooding the market with cheap, low-budget films, allowing audiences to pick the winners. Surging artificial-intelligence capabilities and declining attention spans have led to this strategy, with producers testing audience interest before committing heavily to distribution and audience acquisition.
A low-budget Chinese animated film, “Niu Lai”, which translates to “Here Comes the Cow”, became a viral hit despite being widely mocked for its crude visuals. People packed cinemas to see just how bad it was, with the film grossing 45.5 million yuan in three weeks of screening.
Producers gauge audience interest before committing heavily to distribution and audience acquisition. This approach allows companies to put more money behind titles that drive engagement and quickly pivot away from those that do not — a fail-fast approach. Generative AI has accelerated this high-volume production strategy by reducing the time and cost required to make new titles.
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About 128,000 short-dramas were released in China in the first quarter of 2026, over 95% of which were AI, according to estimates published by China’s Netcasting Services Association. The format overtook long-form video in average daily use, ranking second among audiovisual categories.
Vertical titles can generate strong advertising revenue, with opt-in video ads earning about 11 times Mintegral’s Android benchmark in the first half of the year, according to the report. However, heavy distribution and audience-acquisition spending can erode some of the margins created by cheap production.
Ashley Dudarenok, founder of ChoZan, said that making a short drama may cost only a few hundred thousand yuan, but “making the right audience see it can cost far more.” The cost of buying 1,000 promotional ad impressions rose from 50–80 yuan in 2023 to around 150–200 yuan in 2025, sometimes exceeding 300 yuan during competitive periods.
Competition for viewers is also intensifying, with short drama campaigns paying an average 2.3 times Mintegral’s Android benchmark per app install, while the number of active advertisers and advertising creatives more than doubled, according to the report.
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Seema Shah, Vice President at Sensor Tower, noted that daily active users and time spent on platform are among the most important metrics of user engagement. All entertainment platforms are competing for time, “a finite resource,”
Dudarenok said that high volume and low production costs do not necessarily translate to commercial success. While a few stellar hits can generate substantial revenue, most still fail to produce meaningful returns on investment.
“Niu Lai” performed very poorly at first, taking off only after people decided to see just how bad it really was. It may not have survived long enough to succeed with the fail-fast approach.
