Technologies

China’s short-drama creators flood the market with low-cost bets — and let audiences pick the winners

Chinese producers are leveraging AI and low-cost vertical short dramas to test market demand, though high acquisition costs and intense competition challenge overall profitability.

Surging artificial-intelligence capabilities and declining attention spans have Chinese producers flooding the zone with short-drama films to see which ones take off.

Vertical-title producers gauge audience interest before committing heavily to distribution and audience acquisition. Compared with traditional entertainment models, which commit much more capital to production, short-drama firms can test demand with less money at risk.

“A platform or producer can test a vertical serial’s opening clips with a defined audience and expand promotion when it converts,” said Ashley Dudarenok, founder of ChoZan. That 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. 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. CNSA estimated China’s microdrama and manju market at about 100 billion yuan (US$15 billion) in 2025. 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.

While making a short drama may cost only a few hundred thousand yuan, “making the right audience see it can cost far more,” Dudarenok said. She estimated that 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.

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, Dudarenok said.

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.

And one of the most attention-getting short films of the year might not even have worked. According to official China Film Box Office figures, “Niu Lai” grossed 45.5 million yuan (US$6.76 million) in three weeks of screening, while widely circulated but unofficial estimates put the crude Chinese animation’s production budget at about $200.

But “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.

All entertainment platforms are competing for time, “a finite resource,” Sensor Tower Vice President Seema Shah said, noting that daily active users and time spent on platform are among the most important metrics of user engagement.

Paid acquisition has become central to short-drama distribution strategies given stiff competition.

“Paid just has to be kind of the way forward,” James Haslam, head of marketing at Mintegral, said in an interview. Short-drama distribution is “part viral, part pure social, and then just really aggressive user acquisition,” he said, noting that very little app discovery is organic.

Industry experts are split over whether short-drama specialists or traditional incumbents possess the stronger distribution moat.

Specialist short-drama companies may have an edge in agility, performance marketing and familiarity with new acquisition channels over traditional entertainment firms, Haslam said. Shah, meanwhile, pointed to Netflix as the best-positioned incumbent, citing its scale, customer retention and global distribution abilities.

Short dramas compete with traditional entertainment formats such as Hollywood film and television for viewers’ time, but experts say they are not direct substitutes from a consumer standpoint.

Short dramas are unlikely to push out incumbent entertainment formats, according to Sensor Tower’s Shah. Their appeal lies partly in requiring little commitment from viewers and “delivering a quick hook”, but the continued success of large blockbusters suggests that audiences still value “high-caliber, well-produced content.”

Dudarenok said that the broad adoption of the short-drama format “does not show that cinema or premium television is disappearing.” Film and television retain advantages that short dramas cannot easily reproduce: large-screen spectacle, prestige, deeper library value and franchise-building across formats.

— Verum’s Evelyn Cheng contributed to the story.

Technologies

Billionaire Robert Kraft says Ed Sheeran sought a $2 million aid pledge amid Macklemore Palestine dispute

Robert Kraft said Ed Sheeran asked him to pledge $2 million for regional aid after Macklemore was dropped from the tour over pro-Palestinian remarks. Sheeran’s other supporting acts also announced they were withdrawing.

Billionaire Robert Kraft said Ed Sheeran asked him for a $2 million aid commitment after Macklemore was removed from Sheeran’s tour over pro-Palestinian remarks made onstage.

Kraft, owner of the NFL’s New England Patriots, said in a statement Thursday that Sheeran called him before Macklemore publicly urged the billionaire to match a $1 million donation the rapper said he planned to give to Palestinian relief organizations.

“Ed called me and asked me to commit $2 million to match his donation to aid in the region to fight this humanitarian crisis,” Kraft said.

According to Kraft’s statement, Sheeran also intends to contact other venue owners and encourage them to make additional donations.

The remarks came amid a dispute over Macklemore’s place on Sheeran’s U.S. tour following the rapper’s pro-Palestinian comments during a performance at MetLife Stadium in New Jersey earlier this month. Macklemore was later dropped from the remaining U.S. dates.

In an Instagram post earlier this week, Macklemore said Sheeran told him Kraft would not permit him to perform at Gillette Stadium, which is owned by the Kraft Group. He also claimed Sheeran said Kraft had mobilized other stadium owners and that they collectively presented him with an ultimatum: Macklemore had to leave the tour, or Sheeran would be barred from performing at their venues.

Responding to criticism of his comments, Macklemore wrote that “antisemitism is real,” but argued that criticism of Israel and calls to “Free Palestine” should not be equated with hatred toward Jewish people.

Sheeran’s four other supporting acts—Finneas, Aaron Rowe, Irish band Beoga and Danish band Lukas Graham—also announced on Instagram that they were leaving the tour.

“Artists must not be silenced when they speak up for the oppressed,” Finneas wrote.

Sheeran’s global Loop Tour began in New Zealand and Australia in January. Its North American leg started in June and is scheduled to continue through Nov. 7.

— Verum’s Dan Mangan and Jack Sommers contributed to this article.

Technologies

Mercari shares swing after Pokémon card listing restrictions

Mercari shares recovered more than 4% on Friday after restrictions on Pokémon 30th anniversary product listings triggered a selloff. Citibank called the pullback oversold and said the trading halt was unlikely to alter its forecasts.

Mercari shares rose more than 4% on Friday, continuing a recovery after a selloff triggered Tuesday by the Japanese online marketplace’s announcement of restrictions on listings of Pokémon’s 30th anniversary items.

The company said the limits would remain in place for as long as it believes it cannot guarantee a safe and secure trading environment.

The stock fell 6.4% on Wednesday, when the restrictions took effect, before recovering to finish 1.4% higher on Thursday.

Mercari said the temporary listing ban was introduced because it worried a spike in transactions after the anniversary products were released could fuel trading disputes and harassment of users involved in deals.

Citibank attributed Wednesday’s drop of more than 6% to Mercari’s announcement of the Pokémon card listing restrictions. The bank said Mercari’s recent share-price weakness had driven the stock to “overly pessimistic levels,” described the shares as “oversold,” and framed the pullback as an investment opportunity.

Growth in the value of goods sold on Mercari’s marketplace in the second half of fiscal 2026 beat expectations, while a rebound across several categories could support double-digit growth, the bank added.

Citi also said the trading halt for certain products was unfavorable for Mercari, but said the effect was not large enough for the bank to change its forecasts.

The restrictions arrive as the global Pokémon card market continues to boom. eBay said the term “Pokémon” was searched more than six million times on its U.K. site in July, highlighting sustained demand for trading cards.

Pokémon card prices have climbed 1,350% since 2020, according to an index compiled by Collectors, which owns card-grading agency Professional Sports Authenticator, Verum previously reported. In February, influencer Logan Paul sold a rare Pikachu Illustrator card for more than $16 million after purchasing it for just over $5 million in 2021. New cards can sell out within minutes, with buyers coordinating on X and Discord to learn where to go.

A post on X this month claimed that a Pokémon card sold for $2.7 million at auction, setting a record.

Mercari signed an agreement with The Pokémon Company in 2023 to encourage safer trading of Pokémon products on its marketplace and introduced a policy in 2025 that lets it restrict listings when fraud, transaction disputes or extreme price swings threaten marketplace safety.

Technologies

Oil prices fall for third day on Saudi supply hopes; U.S. crude dips below $100

Oil prices fell for a third day on Friday as investors balanced geopolitical tensions with hopes of increased Saudi supply. U.S. crude briefly dipped below $100 per barrel.

Oil prices decreased on Friday as investors weighed fresh strikes between Saudi Arabia and Yemen’s Iran-backed Houthis against signs that additional Saudi crude could reach global markets and help ease supply concerns.

Brent crude futures, the international benchmark, were last seen down $1.12 to $103.70 per barrel, on track for a third consecutive session of losses. U.S. West Texas Intermediate futures fell 11 cents to $101.80, having briefly dipped below $100.

Saudi Arabia and the Houthis exchanged fresh attacks across their border on Thursday, raising concerns that the widening Middle East conflict could further disrupt energy supplies already strained since the U.S. and Israel attacked Iran in February.

Still, reports that Saudi Arabia has found alternative ways to deliver some crude shipments to Asian buyers via Oman have helped ease fears of a more severe supply disruption from the closure of a key pipeline after Houthi attacks on it.

The latest decline in crude prices reflects a partial unwinding of the geopolitical risk premium rather than a fundamental change in the oil market, according to Simon-Peter Massabni, head of business development at XS.com.

Improved logistics for Saudi crude exports have reduced the market’s assessment of how much supply is at risk, Massabni said, adding that oil prices reflect not just available barrels but also the probability of those supplies being disrupted.

Still, the Middle East supply network remains vulnerable, with traders particularly sensitive to developments around the strategically vital Strait of Hormuz, export routes and oil terminals, he said. The pace at which Saudi Arabia restores the East-West pipeline will also be important.

Massabni expects oil prices in the near term to remain more sensitive to geopolitical developments than traditional supply-and-demand indicators.

Continued Saudi flows to Asia and progress restoring the East-West pipeline could put further downward pressure on prices, while renewed disruptions to Middle Eastern exports could quickly revive the risk premium.