China's Microdrama War Pits Tencent Against ByteDance for Screen Time
A banker in southern China's Guangdong province has been watching microdramas so compulsively that she once kept going while she showered. Shen Jiaoqi told the South China Morning Post that the appeal was as much the look of the shows as their plots, because AI had made the characters stunning. Her habit is one small tile in a very large picture, and that picture has become a battlefield for two of China's biggest technology companies.
Tencent Holdings and ByteDance have both expanded their AI drama output in recent months, betting that episodes of a few minutes with sharp plot twists can hold attention and carry advertising. The format has spread quickly in China over the past few years, offering viewers a fast hit in episodes short enough to finish in a lift.
But the competition has sharpened into a contest for screen time. Tencent's Lvpaopao, a short video mini app inside WeChat that translates as green bubble, reached 143 million monthly active users two months earlier, according to a report by Chinese outlet Jiemian citing data from QuestMobile.
Its weekly active users passed 89.6 million in the first week of this month, a 44 per cent rise on the same period a month before. That momentum has unsettled ByteDance, which runs Hongguo, one of the country's most popular microdrama platforms.
Li Liang, a vice president of ByteDance's Douyin Group, wrote on Weibo that Tencent's growth in short drama and short video far exceeds that of both Douyin and Hongguo. He added that the short drama and short video markets are fully competitive with rapidly changing landscapes, and that no company can safely stay on top.
And the numbers behind Hongguo show what is at stake. Its daily active users reached 168 million at mid year, more than double a year earlier, according to a Nomura research note citing QuestMobile, a figure larger than the combined daily users of Tencent Video, iQiyi, Youku and Mango TV.
The market as a whole is expanding quickly. QuestMobile put monthly active users across microdrama apps at 467 million two months earlier, up 77.6 per cent year on year, with almost all of it free to watch and paid for by advertising.
Zhang Yi, founder and chief analyst at consultancy iiMedia, said the shows are cannibalising engagement hours from both longer form streaming and social feeds. He described the real battle as locking in screen time and releasing advertising inventory while paving the way for payments and ecommerce, and called Tencent's push a defensive move against ByteDance's siphoning of users and advertising revenue.
But the boom has also raised questions about where China's AI capacity is going. Posts went viral claiming that more than half of all Chinese AI token usage goes into microdrama production, a claim that state media and ByteDance both rejected, with ByteDance saying only about 10 per cent of its computing power was used to train and serve video generation models.
Neither company responded immediately to requests for comment. For Shen, the hours are not wasted, since she says she works hard all week and deserves to be entertained for free, and feels no guilt about relaxing that way.
Tencent's Lvpaopao reached 143 million monthly active users in August, according to QuestMobile data
Its weekly active users passed 89.6 million in the first week of October, up 44 per cent in a month
ByteDance's Hongguo reached 168 million daily active users in July, more than double a year earlier
Microdrama apps as a category reached 467 million monthly active users in August, up 77.6 per cent
ByteDance rejected a viral claim that most Chinese AI token use goes into microdrama production
Source: South China Morning Post
