The crossroads of the 100 billion short drama: iQiyi, Youku and Tencent Video face off against ByteDance

With the rise of short videos, the short drama market is becoming a new battlefield in the film and television industry. This emerging track has not only attracted the entry of traditional long video giants such as iQiyi, Youku and Tencent Video, but also triggered the strong rise of emerging forces such as Hongguo Short Drama under ByteDance. This article will deeply analyze the current situation and trends of the short drama market, explore the strategic game between iQiyi, Youku and Tencent Video and giants such as ByteDance in this field, and the future development direction of the short drama industry.

"Horizontal store becomes vertical store", the bigwigs of long video platforms can't hold it anymore.

On February 20, Gong Yu, founder and CEO of iQiyi, criticized Hongguo Short Drama for "abusing its dominant market position" and signing an exclusive agreement with content producers in a rare public speech. At this time, it had only been more than 40 days since iQiyi and Hongguo Short Drama officially announced their in-depth cooperation on January 13. The honeymoon period had just passed, and the two sides had already started to have disputes.

Behind the competition is a tempting cake that no one is willing to let go.

According to DataEye's "2024 Micro-Short Drama Industry White Paper", the scale of China's micro-short drama market reached 50.4 billion last year, a year-on-year increase of 34.9%, surpassing the movie box office for the first time. It is expected to exceed 68 billion in 2025 and exceed 100 billion in 2027.

According to a report by the China Internet Network Information Center (CNNIC), as of December 2024, the number of domestic micro-drama users reached 662 million, accounting for 59.7% of the total number of netizens. The number of people watching micro-dramas exceeded the number of people ordering takeout, reading online novels, and taking online ride-hailing cars.

During the same period, pressure was put on iQiyi, Youku and Tencent Video: The Lighthouse Professional Edition "2024Q1 Drama Market Report" showed that the cumulative number of views in the drama market was 25.683 billion times, a year-on-year decrease of 10.1%, and the number of popular dramas decreased by 28.3%.

The traditional chain of contempt has been overturned, the fantasy of dimensionality reduction has been shattered, and no one doubts the certainty and potential of this emerging track. All the giants have entered the game, and the next step is to compete for food and ammunition. Whoever can occupy more and better content will have more weight.

A new copyright war is brewing, and the long and short competition in the film and television industry has just begun.

01 Say goodbye to wild growth

At the beginning of 2024, a short drama called "I Was a Stepmother in the 1980s", which claimed to have "recharged 20 million on the first day of launch", brought the short drama into the public eye and became a popular top topic and a code to wealth.

But Li Xin (pseudonym), the owner of a short drama company who has five years of experience in short dramas on multiple platforms such as Kuaishou, WeChat, and Baijiahao, knows that the time to make a fortune quietly has long passed. "Paid short dramas are actually dead," he told Snow Leopard Finance and Economics about his judgment.

During the 2021 epidemic, online literature companies such as Shanhai and Jiuzhou tried to film novels into short dramas to attract traffic, and they accidentally struck gold. Li Xin remembers that in those two years, anyone who came out to make paid short dramas could make money, even if the filming was average and the data was not explosive, as long as the traffic was invested, they could make money. A hit short drama in 2022 brought in 80 million in cash.

Starting from 2023, the competition has become fierce. By last year, except for the hits on the list, 70% to 80% of the short dramas did not make money or even lost money. Even the self-produced dramas of large companies such as Shanhai and Jiuzhou only made a profit in 20% to 30%. For a big hit like "I was a Stepmother in the 1980s", the producer Tinghua Island only received a few million yuan.

Li Xin told Xuebao Finance that the reason why paid short dramas are going downhill is that the cost of streaming is high and the audience has found a shortcut to get free money. "Why pay 388 when you can buy a 100GB free version for 2.88 yuan on Taobao?" Because of the prevalence of piracy, the streaming time for new dramas has been shortened from one month to six or seven days or even shorter, and the recharge amount of top short dramas has suddenly dropped from hundreds of millions to tens of millions.

Coupled with the increase in production costs, it becomes even more difficult to make money.

In the past two years, Li Xin established a special paid short drama company, which had an independent team and produced 11 dramas. Each drama cost 500,000 yuan to produce, but only 3 of them made money. The rest were losses, and he eventually lost 6 million yuan. "In the past, it cost 400,000 yuan to shoot a costume short drama, but now it costs 800,000 yuan. In the past, actors in short dramas made 1,000 yuan a day, but now some popular actors make 20,000 yuan a day, which is 20 times the difference," he complained to Snow Leopard Finance.

With the huge traffic of ByteDance and the attractive free model, Hongguo has become the catfish that accelerates the reshuffle of the industry.

In August 2023, the Hongguo Short Drama App was launched. It first introduced mini-program short dramas through copyright purchases, and then cooperated with producers in the form of customized dramas and copyrighted dramas, accumulating a large amount of content.

According to QuestMobile data, by the end of 2024, Hongguo Short Drama, which was established less than a year and a half ago, will have a monthly active user base of over 150 million, a year-on-year increase of 551%. Compared with Youku, an 18-year-old long video platform, it is only about 30 million less. In March last year, the average daily usage time of Hongguo Short Drama reached 1.38 hours, surpassing Youku, iQiyi, Tencent Video and Mango TV.

Within Hongguo, 2024 is defined as the "first year of free short dramas."

According to DataEye data, from January to December last year, the market share of free short dramas climbed from 11% to nearly 60%. It can be said that half of the hot short drama market in 2024 is supported by free short dramas represented by Hongguo.

In the short drama track that has just bid farewell to its wild growth, Hong Guo is both a troublemaker and a rule maker in a sense.

It was also in this year that Gong Yu, the head of iQiyi, who had always held a "cautious and limited" attitude towards short dramas, finally "thought it through."

In the first half of last year, iQiyi tentatively launched two short dramas, "The Young Master and I" and "Abnormal Animal Research Center", which received decent reviews but did not break through the circle. On September 25, Gong Yu announced at the iQiyi iJOY Autumn Enjoyment Conference that he had officially entered the short drama market.

According to iQiyi's plan, "Micro Theater" will release two new works every week, mainly vertical screen short dramas of less than 5 minutes; "Short Theater" will release a new work every week, mainly horizontal screen, and each episode is 5 to 20 minutes. Since the second half of last year, micro short dramas have frequently appeared in iQiyi's financial reports as a new growth curve that has attracted much attention.

According to Yunhe data, in 2024, the number of short dramas released by iQiyi, Tencent Video and Youku will be 56, 202 and 114 respectively. In the top 20 list of box office revenue, Tencent Video contributed 16 and iQiyi made the list with two.

But when viewed in the context of the entire short drama market, these numbers are not impressive. According to DataEye data, in 2024, the total number of short dramas participating in the investment will exceed 44,600, of which 36,400 are new dramas.

No matter how ambitious you are, you have to put the food on the table and invite the guests. For long video platforms that are scrambling to incorporate short dramas into their ecosystems, continuously raising business priorities and increasing investment, the top priority is to increase the supply of content and attract more producers to join the game.

This is also why Hongguo’s exclusive contract with content producers will “break Gong Yu’s defense”.

02 Spending money to grab supply

In March this year, Li Xin officially started to cooperate with Hongguo on a short drama project. Compared with other platforms, the most attractive thing about this platform is its low threshold, high degree of freedom and certain income.

Unlike the boutique strategy of iQiyi, Youku and Tencent Video, Hongguo’s strategy is to cast a wide net and rely on volume to create hits. Regardless of the size of the organization, the number of fans, the strength of the content, or whether it meets the “boutique” standard, everyone has a chance to try. Hongguo will provide a large number of directions and scripts for content providers to refer to, “You don’t even need a scriptwriter, just shoot directly.”

Therefore, many paid short drama companies and traditional film and television organizations that do not have fans on Douyin and Kuaishou have chosen Hongguo. In 2024, Hongguo cooperated with more than 600 organizations to produce content.

Even friends from iQiyi, Youku and Tencent Video have joined hands with Hongguo. In January this year, Yu Zheng's vertical screen short drama "Ji Tianzhao", which he claimed to have invested 8 million yuan, was launched on Hongguo Short Drama. During the 2025 Spring Festival, Huace Film and Television reached a cooperation with Hongguo, and the total number of views of the free vertical screen short drama "Yao Qingli" exceeded 1 billion. During the same period, the short drama label Hao You Neng Ling under Ningmeng Film and Television launched 3 free short dramas on Hongguo.

Li Xin asked the platform and peers about the minimum production fee of Hongguo, which is 500,000, 700,000, 1 million and 1.2 million. A hit short drama can get 4 to 5 million yuan in revenue sharing, and a less popular one can only earn a few hundred thousand yuan. Even if you can't make money, you won't lose too much, "at least the production fee is in your hands." Last year, the benchmark case of New Classics Media was a short drama that made 2.8 million yuan.

As traffic continues to pour in, this ceiling is getting higher.

In November 2024, Hongguo had its first single work with a monthly revenue of over 5 million yuan. In February this year, the figure exceeded 10 million yuan. Le Li, the person in charge of Hongguo short dramas, said in public that throughout 2024, Hongguo, as a single platform, "should have provided the largest budget to the entire short drama industry." He predicted that the industry content budget in 2025 will continue to grow by more than 50%.

Go where you can make more money - for content producers, this is a simple choice.

Since the middle of last year, Li Xin has heard rumors that Hongguo has signed exclusive contracts with some short drama producers, and several have already signed. Exclusive contracts often mean higher production costs and more traffic, but he told Xuebao Finance that most agencies are currently cautious about signing exclusive contracts.

For iQiyi, Youku and Tencent Video, the revenue-sharing model is not new, and signing exclusive partnerships is also a common practice. Douyin and Kuaishou have also begun to experiment with revenue-sharing short dramas in the past few years.

In 2025, a crucial year for the battle for short drama content supply, all companies are increasing their spending.

Tencent Video has upgraded its profit-sharing policy for high-quality short dramas, linking creators' income to the effect of attracting new users, and extending the profit-sharing period for some exclusive projects. In February, Tencent Video announced that it would invest 10% to 20% of its drama budget in the development of horizontal screen short dramas; Youku increased the upper limit of the per-episode profit-sharing for S- and A-level short dramas, and introduced a "new user coefficient"; Gong Yu said at the 2024 Autumn Enjoyment Conference that more than 70% of the revenue would be distributed to content producers.

According to the revenue sharing policy announced by iQiyi last year, the revenue sharing ratio is 100% for exclusive premieres and 70% for non-exclusive and non-premiere premieres. If the content provider signs a global exclusive authorization period of more than 10 years and reaches a certain membership validity period, it can also get an additional 10% to 20% share in addition to the original basic unit price.

Among several long video platforms, iQiyi is the latest to enter the short drama market, but also the most eager. It can't wait to show the market that on this new growth curve of short dramas, iQiyi still has the ability to create hits and catch up.

But in this crowded and chaotic new battlefield, all past experience has been torn to pieces by several major changes.

03 Pinduoduo in the film and television industry

Two years ago, Gong Yu confidently wrote in his "Letter to Investors": the company has achieved the transformation from "iQiyi can create hits" to "iQiyi is a hit-making camp." He firmly believes that the success of "Kuangbi" can be replicated.

But two years have passed, and not only iQiyi, but the entire industry has not seen a phenomenal drama like "Kuaichuang".

There is no doubt about the money-making ability of hot-selling products.

According to DataEye data, 45% of short dramas have less than one million cumulative views, more than 60% (63%) have less than 5 million views, and only 4.3% of them have more than 100 million views. In 2024, the total views of 665 short dramas will reach 124.6 billion times, accounting for 40% of the entire market.

In the short drama track that believes in the tactic of a sea of ​​questions and produces thousands of new dramas every month, the long video platform's steady pace and pursuit of quality may not work.

"Everyone wants a hit, but first of all there must be enough of them to make a hit. The platform's focus on quality and raising the entry threshold means that the pool of works is small and the chances of a hit are correspondingly smaller." Li Xin told Snow Leopard Finance, "It's the same for producers. You can't make 10 out of 10 hits, but you can make 100. Quantity must be the first priority. Without quantity, there can be no quality."

The rise of Hongguo is such a Pinduoduo-style victory - large quantity, good quality, low price, and readily available.

A 25-episode short drama takes a month from preparation to post-production. The common production cost in the industry is about 10,000 yuan per minute. High frequency and high output, you can find any type of drama you want at any time. Spending hundreds of millions or billions of dollars to make a movie may not necessarily make money, but a low-cost short drama can see clear profits.

In Li Xin's opinion, if movies are romantic Western food and TV dramas are Chinese banquets, then short plays are lunch boxes that can fill your stomach anytime and anywhere. "You think short plays are not high-end, but middle-aged and elderly people think they are quite interesting. As long as there are people watching and the volume is large enough, won't the daily activity of the app be high? Whether it is obtained through subsidies of tens of billions or through WeChat forwarding, as long as it comes, it is a daily activity."

Compared with Hongguo, which has almost no threshold, iQiyi, Youku and Tencent Video have stricter review of producers and higher requirements for qualifications, content themes, formats, etc. To get S-level or A-level projects on Kuaishou, you must have an account with at least tens of millions of fans.

But the problem is that the platform's understanding of quality is not the same as the hit that users pay for. Quality may be a necessary condition for a hit, but it is definitely not a sufficient condition. Yu Zheng's short play "Ji Tianzhao", which he claimed to have invested 8 million yuan, has a popularity of just over 20 million on Hongguo Station, which is just mediocre.

Li Xin's company tried to make short plays with a slower pace, deeper content, a sense of sophistication and logic, but found that "they really don't make money." In his opinion, short plays that can make money in the future must have good cost control, provided that the viewing experience is guaranteed and meets the needs of the audience.

The short drama industry is changing too fast. The audience is getting tired of the aesthetics faster and faster. Hot topics are changing every week. There is no mature model to copy, and the hot routines that can be copied will soon pass the "appreciation period".

"Why do so many people come to make short dramas? Its biggest, or even the only advantage, is the low cost. If making short dramas is as expensive as making movies and TV series, it may be the end of the road. So now the production costs are rolled up, just like businesses engaging in price wars, which is a vicious cycle." Li Xin complained.

The short drama industry is still in turmoil. There is a consensus on the need for high-quality works, but the standard of high-quality works is still unclear. Before Hong Guo, no one had become the short-term rule maker of this emerging track.

What comes after the red fruit?

Author: Pi Shiya