When it comes to artificial intelligence, Hollywood studios have tread lightly, insisting that human actors, writers and directors will stay in the mix regardless of how the new technology gets used. That is decidedly not the case with microdramas.
International players are already flooding the zone with thousands of cheaply produced — but highly addictive — microseries that are fully AI-generated, some of which are available in the U.S.
What’s more shocking: The content is driving subscriptions, retention and viewership for some of the biggest players worldwide.
This trend underscores the fact that in many parts of the world, AI is no longer an experiment, with a myriad of international companies betting big on the technology to cut costs and production time in a medium already known for producing quick, cheap content. They also highlight how different cultures are embracing AI, with countries like India showing far more acceptance of fully AI-generated content than the U.S.
“We saw that the metrics of engagement retention for AI-generated content based on human screens … is really similar to what we do with live-action,” Bogdan Nesvit, CEO of Ukrainian vertical platform maker Holywater, revealed last week at a microdrama conference in Los Angeles.
Indian AI-powered entertainment company Dashverse, which licenses some of its content to TikTok and ReelShort, plans to ramp up production to 1,000 AI-generated microseries a month by the end of the year, up 10x from its current output of 100 series in June. The company said an hour of content costs as little as $20,000, compared with $150,000 budgets for live-action vertical series. Even in the U.S., HarperCollins is planning to produce AI-generated animated content based on its romance novels.
These AI series are not created with a few simple prompts, these companies insist. Dashverse employs 700 people across its platform and made clear that writers pen each script and animators work closely with their AI tool to piece together their series. StoReel, a Chinese AI-native entertainment content platform, employs 60 people to produce its AI-generated content, 20 in the scripting department and 20 on the production side.
“If you look at the rise of microdramas as a format, it’s already happening,” Amit Jain, founder and CEO of Luma AI, told TheWrap. “It might look kind of bad right now, but it used to look very bad.”
His point is that with AI’s rapid advancements, “kind of bad” now could quickly become acceptable.
AI excels at making short, compelling videos that look realistic. While the technology may fall apart in a big-screen feature film as AI still struggles with consistent shots, Jain said, it’s suitable for clips that are a minute long and meant to be viewed on a mobile phone.
That’s sqaure in the sweet spot of microseries.
How an AI microseries is built
AI-generated microdramas are not as simple as putting a prompt into ChatGPT or Claude and spitting out 90 minutes’ worth of chapterized content.
TheWrap spoke with several entertainment companies that produce AI-generated scripted content and found several common practices.
Dashverse, Holywater’s My Drama, Israeli-based Shortical and StoReel all made clear that whether live-action, animation or AI-generated, the content lives and dies on a compelling story. Each of these companies either adapts a script from existing libraries or pens an original script for generation.
The leading companies use AI engines compatible with the latest video generation technology like Bytedance’s Seedance 2.0. Directors and showrunners can then create their own AI avatars or use their platform’s library of existing AI actors. Production artists “create” AI-generated locations and any fantastical elements needed for the script.
“We build the characters just like casting … We can have Brad Pitt if we want — or somebody who looks like Brad Pitt,” Ofir Lobel, head of content at Shortical, said, which will likely have U.S. copyright lawyers fidgeting. “Everyone’s available, at least their AI version.”
From there, designated showrunners will enter a page of dialogue – equal to one minute or one episode of a microseries – into the engine. The LLM will then produce one minute of content. The producers can adapt their prompt to get more specific and adjust each element.
Dashverse and StoReel said that they spend 10 days to a month on the scripting process and a month on production. While the production process is still much quicker and more cost efficient than a live-action shoot, the production still requires some artistic skill.
“If the tech is already so advanced, what’s really going to be competitive is everybody’s taste,” StoReel co-founder Angela Yu told TheWrap. “It’s not going to be that AI is going to take over creation, but people who actually have very high creation powers are going to be the ones that succeed.”
The international players
International audiences have fully embraced AI content, according to some of the leading companies.
China has led the charge in the market. In March alone, roughly 50,000 AI-native titles were added to Douyin, China’s popular video-sharing platform. To put that in perspective, that is six times more content than Netflix’s current library.
Holywater’s Nesvit said that AI has allowed the platform to take bigger swings in content. A microseries it created about Formula One would have cost the company upwards of $500,000 if it were shot traditionally, but the AI tool allowed it to stay within budget.
Tanveer Ali, vice president of business and partnerships at Dashverse, said that it has found similar success in India.
“AI acceptance in India is crazy,” Ali told TheWrap. “When we first launched our show in August of last year, we had our own doubts, but the response has been overwhelming.”
The company’s subscription-only platform DashReels reported 10 million monthly active users, a million daily active users and a retention rate of 68% on its AI content. Dashverse, including the subscription platform and its ad-supported ShortFree, has more than 50 million combined downloads with over 4 billion episodes consumed.
Initially, the StoReel co-founders wanted to just create a traditional microseries app, but they saw the steep competition and how much other companies were spending on user acquisition, and it was not sustainable as a startup.
“In January 2025 we saw the [AI] content was just terrible, it was unwatchable. But in September, when Veo 3 was launched, we saw that there was a huge quality jump,” Yu said of the Google AI video generator. “Now the quality of AI short dramas are really becoming commercially viable.”
Yu added that AI content has allowed her company to expand genres into sci-fi and fantasy as well as LGBTQ+ shows.
Up until recently, Israeli microseries company Shortical primarily focused on live-action microdramas, using real talent and production crews. The platform launched its first AI-generated project with Ofir Lobel at the helm last month. Lobel has previously directed Netflix series, including “Blank Space” and “Trust No One,” but this was his first time creating a fully animated series.
“I see [AI] as power back to the people,” he told TheWrap.
Lobel said there have been two quantum leaps in the last three years in entertainment, the first being the rise of the microdrama format and the second being AI. Despite early trepidation, he fully embraced the format and became head of content at Shortical.
“Just like Pixar movies, you can also always say that Pixar movies, they’re made on computers,” Lobel said. “They’re not shot, they’re not live-action, but they do touch you at the end of the day.”
As with many of the leading microseries apps, AI-generated content makes its profits off of subscriptions rather than an ad-tier.
Dashverse has found that the cost saving in resources and employment on the AI content allows them to take greater swings and see greater returns. The company would spend $150,000 for a live-action production, still relatively cheap compared to Hollywood budgets, but the leadership said that that budget is not enough to create a high-quality fantasy show.
“That’s where AI gives you the flexibility to create something like a period drama set in medieval times,” Ali said. “You can get it done with AI for cheap. An hour of content costs around $20,000 to 30,000.”
Ali said the company is trying to get budgets as low as $10,000 for some series by the end of the year.
Coming to America
American audiences are slower to hop on the AI-generated content train. While some short form video has been embraced by audiences, the traditional entertainment industry is fearful of how the new technology will kill jobs and reduce creativity to lines of code.
Many vertical-first companies, however, are jumping aboard. Harlequin, the romance arm of HarperCollins’ publishing group, partnered with DashReels to create animated AI-generated content based off of some of its IP.
The initial partnership was a multi-year deal for Dashverse to create 40 adaptations, which are set to be released by the end of the month. Ali commended the company, which has been in business since 1949, for its progressive approach to IP and adaptation.
CandyJar announced last month its fully AI-generated content arm, Ironblood, will launch in July. Ali Albazaz, CEO and founder of CandyJar’s parent company Inkitt, said that AI will reduce production costs for the company by 99%. They are planning to expand into action, adventure, superhero and sci-fi fandoms with this new platform.
“All of our social media feeds are full of ‘AI slop’ and we’re committed to being the anti-slop AI entertainment platform,” Albazaz told TheWrap. “With AI, we are able to create Hollywood standard visuals paired with compelling, proven-IP storylines, and the end result is unbelievable.”
ATwist, founded by traditional entertainment execs Chris McGurk, Jana Winograde and Susan Rovner, said that their platform is AI-native, meaning that they use the technology to support production efficiency, personalization and audience insights but not necessarily to create fully AI-generated series.
“We think of aTwist as a double helix: One strand is storytelling, the other is technology. AI lives on the tech strand, but everything is always touched by a human hand,” a representative for the company told TheWrap.
Dashverse’s Ali believes 2026 will be the year of the vertical-first AI drama, but the real test won’t be the technology’s speed. It will be whether the industry can maintain that human spark while chasing the scale that global audiences are beginning to demand — and whether AI-generated microdramas will go down as well in the West as they have in the East.
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‘ Some details of this article were extracted from the following source www.thewrap.com ’
