Core Viewpoint - The article discusses the decline of Chinese short dramas' dominance in the overseas market, highlighting the increasing competition from foreign companies that have begun to produce their own short dramas, thus capturing a significant market share from Chinese apps [4][8]. Market Trends - In the first three quarters of this year, over two-thirds of the top thirty overseas short drama apps were contributed by Chinese apps, a decrease from 95% in the same period last year, indicating a loss of nearly 30% market share to foreign competitors [7]. - The article emphasizes that the previous dominance of Chinese short dramas was due to a first-mover advantage, but as foreign companies learn to produce culturally relevant short dramas, the market share is expected to continue shifting [9]. Industry Developments - Hollywood is also exploring the short drama format, with companies like Paramount collaborating with Chinese platforms and Fox investing in AI-driven short drama companies like Holywater [10][11][12]. - Holywater, a Ukrainian company, utilizes AI technology to create short dramas, significantly reducing production costs and time. For example, a fire scene that would typically cost $8,000 to film can be generated using AI for just $100, with a production cycle of one week [15][16]. Innovation in Audience Engagement - Holywater incorporates AI not only in production but also in audience interaction, allowing viewers to chat with characters, enhancing engagement and creating a more interactive experience [18][19]. - The company aims to break the "fourth wall" by allowing audience feedback to influence the storyline, making the viewing experience more participatory and akin to interactive gaming [20]. Competitive Landscape - The article concludes that Chinese short dramas need to discover new competitive advantages in the overseas market to avoid being overtaken by local short drama companies that are leveraging advanced technologies and innovative engagement strategies [21].

Group 1 - Fox Entertainment has made a strategic investment in Holywater, an AI short drama company, to expand its creative content portfolio and audience reach [1][3] - Holywater, based in Ukraine, operates four core applications: My Drama, FreeBits, My Passion, and My Muse, focusing on short dramas and e-books [3] - As part of the agreement, Fox Entertainment Studios will produce over 200 vertical screen works for My Drama over the next two years, with initial projects including "Billionaire Blackmail" and "Bound by Obsession" currently in production [3] Group 2 - My Drama ranked first in the DataEye overseas short drama product rankings in September 2025, with a material investment volume of 202,000 sets [6] - The overseas short drama market is witnessing a wave of investment and mergers, with several companies, including StoReel and CreativeFitting, securing significant funding for content development [7] - The investment trend indicates a shift in the overseas short drama market from land-grabbing to a merger and acquisition phase, particularly with traditional media giants like Fox Entertainment entering the space [7][8] Group 3 - The competition in the overseas short drama market is intensifying, with a "burning money" strategy leading to the elimination of several micro-short drama apps [8] - Traditional media giants are recognizing the potential of micro-short dramas as an emerging sector, indicating a growing interest in this market [9] - The influx of capital and the competitive landscape suggest that the overseas short drama market is entering a new phase of investment and heightened competition [9]