🇨🇳 Vertical Drama in China

The birthplace of vertical drama, and the market that already left the paywall behind. The reversal took two years: 70% of the market ran on paid unlocks in 2023, 66% is free and ad-funded in 2025. Duanju revenue passed the national box office in 2024 — CNY 50.44B against CNY 47B, with 662 million viewers — and ran at roughly twice the box office in 2025 per the NRTA. The centre of gravity is Hongguo, ByteDance's free ad-funded app, which peaked at 304M monthly users in February 2026 — but read that against the CNNIC count, because the two point in opposite directions: the national audience has stopped growing, 662M at end-2024 against 664M at end-2025, with penetration slipping from 59.7% to 59.0%. One app is taking share inside a market that has stopped adding people. Growth of a platform is not growth of a market. Regulation is the other half of the story: mandatory on-screen AI labelling since September 2025, licensing thresholds raised in January 2026 (CNY 1M standard, CNY 3M for key titles), 25,000+ episodes pulled in earlier sweeps, a two-month NRTA campaign opened in June 2026 against eight banned content categories — 670 AI-made dramas sanctioned in Q1 alone — and, on 24 June, draft Administrative Measures giving the format its legal definition: serialised, episodes under twenty minutes, three tiers by investment scale.

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