Orient Securities has released a research report stating that, in the long term, the anticipated emergence of mobile, built-in AI tools for short drama and comic production is expected to drive a shift among producers from PGC to UGC. This evolution is projected to ultimately accumulate a more substantial volume of data corpora for a fully-realized AIGC ecosystem. The report recommends focusing on platform-based companies with established IP reserves.
In the short term, the bank believes that a significant increase in supply, special traffic incentives for AI short comic dramas from platforms like ByteDance, and cost-side optimizations driven by AI will benefit the entire industry chain, particularly content providers. The key viewpoints from Orient Securities are as follows.
Recently, leading companies in the IP and short drama industry chain, such as China Literature and Chinese All, have successively launched all-in-one AI short drama production tools. These tools are expected to enable faster conversion of IP novels.
All-in-one AI short drama generation tools are anticipated to lower the barriers to short drama production, thereby promoting a substantial increase in the supply of short comic dramas. In 2025, AI-generated short comic dramas are still largely confined to semi-automation. Production teams need to navigate a pipeline from script → storyboarding → motion effects → dubbing → subtitles, switching between different AI tools and incorporating manual intervention to produce the final content.
Looking ahead to 2026, the bank identifies the most significant trend as the launch of all-in-one generation tools by IP holders and platform providers. This development is expected to lower the entry barrier for creating AI short comic dramas and significantly boost their supply. As of January 2026, several upstream IP novel platforms and short drama platforms have already released their own AI production tools or are undertaking comprehensive, all-in-one iterations of existing tools.
China Literature's "Manju Assistant" recently entered into a deep business collaboration with Shengshu Technology's multimodal large model, Vidu. Meanwhile, Chinese All is set to launch its own all-in-one product, "Ciyuan Shenbi." The bank anticipates that future upstream IP companies, including ByteDance's Tomato Novel and iReader Technology, are likely to provide vertical, all-in-one solutions for AI short comic dramas, accelerating the conversion of their IP libraries.
Enhancements in character, lip-sync, and style consistency, along with improvements in dynamic narrative capabilities, are expected to increase the utilization share of AI tools. In 2025, AI short comic dramas still faced significant issues with consistency, with characters and styles prone to errors.
In 2026, based on the iterative directions of models like SenseTime's SEKO, the bank expects more models to address consistency problems through methods such as digital identity binding for characters, multi-angle presets, and style locking. Regarding dynamic narrative, AI short comic dramas in 2025 suffered from a pronounced "slideshow" effect. By 2026, the bank predicts that AI for dynamic storyboarding will be capable of generating camera movements like pans, zooms, and tilts based on the script, while intelligent tweening for action and special effects frames will reduce the need for manual corrections.
Improvements in 3D capabilities are expected to drive the reuse of character models across digital assets and extend the lifecycle of IP. In 2025, AI short comic dramas were primarily 2D. For 2026, the bank forecasts a significant increase in the proportion of finished 3D comic dramas and short dramas with a live-action style. Given the greater reusability of 3D assets, this trend is seen as enhancing the potential for IP serialization and strengthening the conversion of IP across various digital content sectors, including comic dramas and games.
TikTok's incentives of up to 20x are boosting the overseas short drama market, with AI facilitating localization. Recently, ByteDance launched the independent app PineDrama, and TikTok's official short drama platform has opened for external partnerships. Early entrants and providers of high-quality content will receive dedicated traffic support on both TikTok and the PineDrama App.
In terms of content types, the platform is prioritizing and collaborating on locally produced overseas dramas, trending chart-topping series, and AI comic dramas. For such premium content, the platform will offer revenue support with incentive multipliers of up to 20x. The bank believes that the shift from live-action to AI production makes global distribution more convenient, with higher conversion rates and lower costs.
During the production process, simply changing the language pack and fine-tuning character models can generate content better suited to local markets. Coupled with TikTok's additional incentive multiplier of up to 20x for the AI comic drama track, the bank expects this to accelerate growth across the entire industry chain.
Related stocks: Tencent Holdings, China Literature, Chinese All, iReader Technology, Kunlun Tech, Huanrui Century. Risk warnings: Competition risks from ByteDance, risks associated with the pace of AI technology iteration falling short of expectations, risks of Return on Investment (ROI) from advertising traffic failing to meet expectations, and risks of conversion effectiveness not meeting expectations.
