TikTok's Short Drama Platform "Hongguo" Sparks Industry Chaos with Policy Shift

TikTok Announces Support for Live-Action Dramas at Short Drama Industry Conference

TikTok recently announced a new policy to strongly support live-action dramas (referred to as “real-person dramas”) at the Short Drama Industry Conference held in Changsha. The platform plans to increase the content distribution ratio in organic traffic scenes, with distribution amounts expected to grow by approximately 15%. Additionally, eight key categories have been designated for extra rewards. The total support budget has been increased to 1.5 billion yuan, with the minimum guaranteed amount per project rising by about 60% compared to last year. At first glance, the platform appears to be shifting its focus toward prioritizing live-action content.

Just Two Months Ago, AI Content Was the Focus

However, just two months ago, Hongguo had been actively promoting AI-generated content. In February of this year, following ByteDance’s release of the Seedance AI model, Hongguo rolled out incentives for AI-generated dramas, particularly “manga dramas” (AI-created dramas). The distribution coefficients for AI-simulated live-action short dramas were set at the highest level, encouraging production companies to focus on AI content. As a result, of the approximately 128,000 short dramas released industry-wide in the first quarter of 2026, AI-generated works accounted for 122,000, leaving live-action dramas with less than a 5% share.

Production Companies Retreat from Live-Action Drama

This abrupt policy shift has had a significant impact on production companies. According to industry reports, companies like Xi’an Fengxing and Zhengzhou’s Huayang Nianhua, which previously focused on live-action dramas, have drastically reduced their production. Chengdu-based Zhongdu Technology has completely exited the live-action drama sector, citing long project recovery periods and low profit margins as reasons. For smaller production companies, the acceptance rate for scripts has plummeted from about 30% to just 7.5%, making business continuity increasingly difficult.

Criticism of Hongguo’s “Flip-Flopping” Policies

The rapid policy shifts have drawn criticism, with many accusing Hongguo of “flip-flopping” on its decisions. Industry insiders argue that while Hongguo can easily change direction due to ByteDance’s vast traffic resources, production companies, which have heavily invested in filming, struggle to adapt. Although Hongguo announced support for live-action dramas at the recent conference, many in the industry describe the situation as “internal contradictions,” suggesting that trust in the platform has already eroded significantly.

Unauthorized Use of Faces in AI Dramas Comes to Light

Adding to the chaos, issues of copyright infringement have emerged in AI-generated dramas. Notably, a Hanfu (traditional Chinese clothing) blogger accused the platform of using her face without permission in an AI-generated drama. Although Hongguo removed the problematic content, its response was deemed insufficient. As legal frameworks around AI-generated content (AIGC) develop, the platform’s governance capabilities are being called into question. Hongguo has begun removing low-quality AI dramas, but this move highlights the decline in content quality caused by its own policies.

Regulatory Actions and Future Challenges

Regulatory authorities are also stepping in. The State Administration of Radio and Television has launched corrective measures in response to the surge in unauthorized AI modifications. Hongguo has reported investigating and deleting over 10,000 AI-generated dramas. Many of the deleted works were concentrated in emotionally charged genres like “reincarnation” and “revenge,” suggesting that the design of distribution coefficients may have distorted content quality. While Hongguo has pledged to continue supporting live-action dramas, maintaining policy consistency and ensuring the sustainability of the industry remain critical challenges.