On September 9, 2026, a set of data sent shockwaves through the entire film and television sector. According to QuestMobile's monitoring data, as of July 2026, the daily active users (DAUs) of Hongguo short dramas—a ByteDance-owned platform—reached 168 million, marking a staggering 107% year-on-year increase (based on standalone app metrics, excluding web and TV versions). Under the same criteria, Tencent Video (Tencent Holdings, 00700.HK) recorded approximately 50 million DAUs, iQIYI (NASDAQ: IQ) around 45 million, while Youku (Alibaba, 09988.HK) and Mango TV (Mango Excellent Media, 300413) each had about 30 million, totaling roughly 155 million across the four platforms. A free short drama app launched in August 2023 has, in just three years, achieved a user base that traditional long-form video platforms took over a decade to build—surpassing the combined DAUs of four long-form apps with a single application.

What demands even greater attention than the sheer user count is the growth momentum. In January 2026, Hongguo's DAUs just surpassed 100 million, making it ByteDance's fifth standalone app to exceed this milestone after Toutiao, Douyin, Doubao, and Feidan Novels. Less than seven months later, this figure surged by nearly 70%. Meanwhile, according to a Nomura Securities research report, all four major long-form video platforms experienced double-digit declines in DAUs, with monthly usage time dropping between 24% and 47%. This divergence paints a clear K-shaped curve—short dramas are on the rise, while long-form dramas are in decline.

01. Free: The Sharpest Commercial Weapon

How does Hongguo achieve this? The most straightforward answer is "free." Unlike iQIYI, Youku, Tencent Video, and Mango TV, which rely on a "membership subscription + advertising" revenue model, Hongguo short dramas adopt a "free viewing + ad revenue-sharing" approach. Users can watch all content without any fees, with the platform monetizing by selling user attention to advertisers. This model eliminates all paywalls, directly addressing user resentment toward continuous price hikes by long-form platforms. According to third-party data, the market share of free short dramas skyrocketed from approximately 11% in early 2024 to over 50% by year-end, with Hongguo capturing nearly 90% of the standalone short drama app market.

However, "free" is merely the surface. What truly propels Hongguo's rapid growth is ByteDance's complete ecosystem. Hongguo short dramas share the same underlying recommendation algorithm as Douyin, enabling precise content delivery based on users' viewing history, dwell time, and interaction behaviors. Nomura Securities data shows that Douyin's DAUs reached 714 million in July, with total user time surpassing WeChat for the first time. Industry estimates indicate that over half of Hongguo's new users come from Douyin referrals. After encountering short drama clips on Douyin, users can click to watch full episodes on Hongguo. This "Douyin drives traffic, Hongguo converts" closed loop represents a competitive advantage difficult for other standalone short drama platforms to replicate.

More critically, cost structures differ significantly. Long-form platforms rely on licensed content and original productions, with top-tier episodes costing millions or even tens of millions per installment. In contrast, micro-short dramas cost tens of thousands to several million yuan per production. Hongguo partners with numerous production teams, sharing revenue based on viewing time and ad income, launching dozens of new titles daily. This cost gap directly impacts supply efficiency. According to the China Network Audio-Visual Association, approximately 128,000 micro-short dramas launched industry-wide in Q1 2026, with AI-generated content exceeding 95%. DataEye Research estimates that China's domestic AI short drama and comic drama market will surpass 40 billion yuan in 2026. With Feidan Novels supplying web novel IPs, Douyin providing traffic entry points, and Hongguo serving as the playback platform—all three links operate within the same corporate group, creating barriers for external platforms to intervene at any stage.

02. Who Watches Hongguo? The Audience Long-Form Platforms Lost

Hongguo's user demographics reveal deeper structural shifts. QuestMobile's 2026 Short Drama Industry Insight Report shows that as of February 2026, users aged 50+ on Hongguo reached 40.745 million, accounting for 13.4% of its total user base. While this proportion may not seem staggering, it represents nearly 90% of all silver-haired users across short drama apps (46.53 million monthly active users in total). By May 2026, users born in the 1970s and 1980s combined accounted for 47.2% of short drama app users, with 63.1% hailing from second-, third-, and fourth-tier cities.

This audience had virtually no overlap with long-form platforms over the past decade. The China Network Audio-Visual Development Research Report (2025) reveals that as of December 2024, users aged 20–29 and those with bachelor's degrees or higher accounted for approximately 86% of long-form video users—nearly 20 percentage points higher than the national average. Long-form platforms built their businesses on membership systems, but middle-aged and elderly users resist monthly content subscriptions, leaving them permanently excluded. The 2024 Micro-Short Drama Industry Ecosystem Insight Report found that 60% of surveyed middle-aged and elderly users had never paid for micro-short dramas.

Hongguo tore down this barrier. Viewing is free, with advertising as the trade-off. The platform even rewards users with coins for watching dramas and daily check-ins. Earning money while consuming content was unimaginable during the long-form era. By leveraging a free model, Hongguo activated a user group long-form platforms could never reach—not by poaching their existing users, but by converting non-viewers into video consumers.

03. The 168 Million DAU Figure: A Number That Demands Sobriety

Hongguo's prosperity casts shadows. QuestMobile defines DAUs as "users opening the app that day," but Hongguo incentivizes sign-ins and ad-watching for coin rewards, with such behaviors counting toward DAUs. Jiemian News explicitly warns that a significant portion of Hongguo's users open the app solely to complete sign-in tasks, watch ads for coins, or accumulate cash-out quotas—typical incentive-driven activity. Such behaviors hold unequal advertising value compared to active content consumption—advertisers pay for attention retention and conversion, not clicks on cash-out pages.

Moreover, surpassing DAU scale does not equate to surpassing commercial quality. iQIYI and Tencent Video both boast hundred-million-level membership bases, with revenue dominated by subscriptions. Hongguo's income derives almost entirely from advertising. Market estimates peg Hongguo's 2025 ad revenue at approximately 20 billion yuan; in contrast, iQIYI's membership revenue reached 4.01 billion yuan in Q2 2026, down 2% year-on-year. The difference lies not just in volume but structure—membership revenue comes from stable monthly subscriptions, while ad revenue fluctuates with advertiser cycles and macroeconomic conditions. After achieving massive DAUs, Hongguo must answer how to convert attention into sustainable commercial returns.

Persistent criticisms also target content homogenization, clichéd plot formulas, and low premium content rates—endless rehashes of revenge fantasies, mother-in-law conflicts, and tycoon romances. According to DataEye's 2026 H1 AI Drama and Comic Drama Data Report, among 221,900 AI dramas launched on Douyin in H1 2026, only 1,055 surpassed 100 million views (0.48%). Using 50 million views as the breakeven threshold, just 1.3% of projects met this benchmark, with 98.7% failing to recoup costs within six months of launch. Despite exploding traffic, the micro-short drama industry conceals severe profitability challenges, characterized by "high hype, low returns."

04. Act II: The Race from Traffic to Monetization

Facing this disruption, long-form platforms are collectively pivoting. Since 2026, Youku, iQIYI, and Tencent Video have upgraded their revenue-sharing systems. Tencent Video unified horizontal-screen long, medium, and short dramas under a single framework. iQIYI launched the "Thousand Premium Micro-Short Dramas" plan and opened its IP library of 10,000 titles, while Youku established an independent micro-short drama center. The National Radio and Television Administration is also steering the industry toward premium content—issuing the Implementation Plan for the "Micro-Short Drama Premium Creation and Dissemination Initiative" in May 2026 and formalizing regulatory oversight with the Micro-Short Drama Development Management Measures in July.

Meanwhile, Hongguo seeks a second growth engine beyond free content. In April 2026, Douyin E-commerce restructured, formally establishing the "Hongguo E-commerce" department. The Hongguo app introduced a "Short Drama Merchandise" section, enabling users to shop from product pages linked to dramas or click "same style" buttons while watching to instantly purchase featured items. With ad-based monetization offering limited efficiency and imagination, e-commerce integration represents Hongguo's inevitable commercialization path.

As of May 2026, micro-short drama users reached 851 million, accounting for 66.7% of all internet users. Two out of every three netizens now watch short dramas. Hongguo's 168 million DAUs prove the traffic ceiling for short dramas far exceeds expectations. But traffic alone is not enough. Having replicated long-form platforms' decade-long user accumulation in three years, Hongguo must now achieve what long-form platforms never could—transforming 168 million DAUs into sustainable commercial value. For the entire video industry, the real test has just begun.

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