AI Decimates China's Microdrama Industry, Displacing Thousands of Actors

In a basement studio in Hengdian, a town of just over 200,000 people in eastern China's Zhejiang province, the familiar machinery of film production was still grinding forward. Cameramen adjusted lights. Choreographers walked through fight sequences. Actors in assassin costumes waited between takes, smoking and getting touch-ups from makeup artists. But the set was a relic of something already fading. Within months, the microdrama industry that had transformed Hengdian into a thriving creative hub would hollow out almost entirely, displaced not by market forces or changing tastes, but by a technology that could do the work faster and cheaper than any human crew.

Microdramas emerged during the pandemic as a natural fit for short-video platforms like Douyin and Kuaishou—roughly 90-second episodes that, strung together, told stories as long as feature films. The format exploded. By last year, the domestic industry was valued at nearly $15 billion, almost double what Chinese box offices generated. The work was grueling—18 to 20-hour days were standard, with productions racing to shoot what amounted to feature-length films in a single week—but it was work. Thousands of young actors, many without formal training, flooded into Hengdian and other production hubs like Qingdao and Xi'an. Some became celebrities with millions of social media followers. Others, even without name recognition, could earn multiples of an average monthly urban wage if they landed leading roles in successful dramas. The barrier to entry was low. The money, for those who caught the wave, could be real.

Then, in February 2026, ByteDance released SeeDance 2.0. The AI video generation tool arrived with the force of a market collapse. Within weeks, the streets of Hengdian emptied. Actor Zhuang Wenjie, 28, had returned from Chinese New Year holiday expecting to audition for higher-profile roles. Instead, she found jobs had simply vanished. "Suddenly there was a feeling of impending crisis," she said. By April, she left town entirely, joining an exodus of actors and crew. The numbers tell the story: in the first three months of 2026, more than 120,000 microdramas were released in China. Ninety-five percent were generated by AI. On Douyin alone, 220,000 new AI-generated microdramas accumulated 500 billion views in the first half of the year.

The economics were brutal. A 120-minute microdrama of ordinary quality that once required a live crew working for a week could now be produced by five people using AI tools for roughly $2,200—less than a tenth of what live production typically cost. ByteDance owned two of the main platforms hosting microdramas and controlled a repository of novels that could be mined for scripts. Competitors like Kuaishou, Alibaba, and MiniMax quickly released their own video-generation tools. The industry didn't evolve; it inverted. Actor Junlin, 24, had been filming 25 out of roughly 30 days per month in spring. By June, she'd worked only seven days. Roles that once paid thousands now paid $45 a day. Liu Yuzhan, 29, who had been booking four new roles monthly, turned to food delivery driving to cover his mortgage and his parents' retirement. "It's simply not enough to cover my daily expenses," he said.

The displacement rippled outward. Social media chat groups that once advertised acting opportunities filled instead with job postings for AI editors, programmers, and screenwriters. A new class of entrepreneurs rushed in. Tan Chen, a 21-year-old college student, founded a startup in April focused on AI production. His team took scripts and novels, optimized them for microdramas, designed characters and sets, and used AI prompts to generate video clips that were then edited together. When he started, clients paid $150 per minute. Within months, as programmers flooded the space and middlemen multiplied, rates had collapsed to $20 per minute. "This rapidly growing market inevitably has a certain degree of bubble," Tan acknowledged. His company pivoted to AI-generated cartoons to avoid the legal and ethical minefield of AI characters that resembled real actors without permission.

The question of whether AI could replace human actors remained contested. Actor Yu Shutian, 31, discovered what she believed was her own face "blended into" an AI character after fans alerted her. Proving the likeness was based on her face seemed nearly impossible, so she never pursued legal action. Instead, she made a pragmatic choice: "AI is unstoppable. If you can't beat it, join it." She began using AI tools herself and shifted focus toward directing. Junlin, still in Hengdian, held a different view. "AI is formulaic," she said. "It can't express the full range of human emotions and desires." But she also recognized the vulnerability of her position. "AI absolutely can't replace a real person," she said. "But it might be able to replace me."

Platforms showed signs of hedging their bets. Hongguo, a major microdrama streaming app, recently raised production standards for AI-generated content. Ratings suggested viewers still wanted live-action dramas—they ranked in the platform's top 10 alongside AI productions and cartoons. Whether that appetite would hold, or whether it represented a temporary nostalgia before audiences fully adapted to synthetic entertainment, remained unclear. The transformation was already underway. What role humans would play in the industry going forward—whether as directors, editors, or something else entirely—was far from settled. For now, Hengdian's studio lots stood quieter than they had in years, and thousands of actors faced a future that looked nothing like the one they'd imagined when they arrived.