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ByteDance is finding out that the next streaming hit does not need a two-hour runtime, a blockbuster budget, or even a traditional film crew.
In China, it may only need a smartphone screen and a few minutes of viewers’ attention.
Hongguo, ByteDance’s free short-drama app, reached 168 million daily active users in July 2026, surpassing the combined mobile-app audiences of Tencent Video, iQiyi, Youku, and Mango TV. The milestone shows how quickly short-form entertainment, increasingly filled with AI-generated productions, is challenging China’s established streaming model.
The bigger story is how ByteDance got there. AI is making dramas dramatically cheaper and faster to produce, while Hongguo gives creators a massive distribution and advertising platform once those shows are ready.
Hongguo tops China’s biggest streaming apps in daily mobile users
Hongguo launched in 2023 and has grown alongside China’s short-drama boom. The South China Morning Post reported that Hongguo’s daily active users more than doubled year-over-year to 168 million in July.
The figure came from QuestMobile data cited in an August Nomura research note. Hongguo’s audience exceeded the combined mobile-app audiences of Tencent Video, iQiyi, Youku, and Mango TV.
SCMP also reported that monthly time spent on Hongguo jumped 157% year over year in July, while all four major long-form streaming rivals recorded declines on mobile.
Platform | Year-over-year change in monthly time spent, July 2026 |
| Hongguo | +157% |
| iQiyi | -27% |
| Tencent Video | -31% |
| Mango TV | -24% |
| Youku | -47% |
SCMP found that eight of Hongguo’s 10 most popular titles were AI-generated dramas or animated series. Unlike subscription-heavy long-form services, Hongguo lets users watch complete short-drama series for free and generates revenue through advertising, sharing some of the proceeds with creators.
The format also fits the kind of mobile consumption ByteDance already serves through Douyin, its Chinese counterpart to TikTok.
Seedance helps shrink short-drama crews, costs, and production time
Generative AI is helping to meet that demand at an extraordinary pace.
According to Our China Story, China was releasing an average of one new AI short drama every 36 seconds in July 2026. The publication also cited industry sources estimating that, after ByteDance launched Seedance 2.0 in February, a team of five people with a few computers could produce a 60-episode AI drama in a week for less than one-tenth the cost of a live-action production.
DataEye figures cited by Our China Story show why cheaper production does not guarantee success. Of the 221,900 new AI short dramas added to Douyin in the first half of 2026, only 1.3% crossed the source’s estimated 50 million-view break-even threshold.
AI may have made content easier to create, but it has also made viewers’ attention harder to win.
What eWeek found: AI made content cheap, but ByteDance already has the audience
As production costs fall, the number of AI dramas is climbing just as quickly.
When hundreds of thousands of new titles can be generated quickly, making another show is no longer the hardest part. Getting people to stop scrolling and watch it is.
ByteDance enters that contest with an advantage that goes beyond Seedance. According to SCMP, five ByteDance services, including Douyin, Hongguo, Toutiao, Douyin Lite, and Fanqie Free Novels, ranked among China’s 20 most-used apps by monthly time spent in July. Together, they accounted for 35% of the time users spent across those top 20 apps.
Baiguan also said that Hongguo and Douyin have introduced dedicated revenue-sharing programs for AI-generated animation. The publication cited Seedance’s growing use in professional television production as another sign that ByteDance’s AI video technology is expanding beyond short-form experimentation.
Hongguo’s rise is not just about cheaper AI production. ByteDance also has the apps and advertising infrastructure to put those shows in front of huge audiences and turn that attention into revenue.
Why China’s AI short-drama boom matters for APAC
China is already showing what happens when AI-generated entertainment moves from experiment to mass-market product. Hongguo offers other APAC streaming markets an early look at an industry where producing content may become dramatically cheaper, faster, and more accessible.
That could change where the real competitive advantage sits. If AI allows thousands of new shows to be produced at low cost, owning the audience, recommendation engine, advertising network, and distribution platform becomes increasingly valuable. ByteDance already operates across all four.
Baiguan has also pointed to the growing overseas reach of Chinese short-drama companies, suggesting the format has room to expand beyond China's domestic market. But Hongguo does not have to become an international streaming giant for its model to matter.
The playbook is already visible: use AI to cut production costs, flood mobile platforms with new entertainment, learn what holds viewers' attention, and monetize the winners.
Hongguo already has the audience. As AI makes creating another show easier, keeping that audience may become the much harder part.
ByteDance’s AI push goes beyond entertainment. See how Doubao Work takes the fight to Tencent in China’s enterprise AI market.