(Yicai) Oct. 15 -- Tencent Holdings has launched a short drama mini-program on its super app WeChat to rival ByteDance’s short drama app Hongguo.

Lvpaopao offers free content and earns money from advertisements between episodes. It does not produce content itself, as third-party producers and authorized distributors provide all short dramas. WeChat users do not need to download any apps and can watch the short dramas on the mini-program directly.

High-quality short dramas co-distributed by Lvpaopao with an average play duration of over 10 minutes per person can receive revenue incentives of up to 100 percent, of which 90 percent in cash dividends and 10 percent in advertising bonuses, according to the Lvpaopao mini-program. The threshold for the incentives is based on view duration rather than view counts.

Users’ view duration on Lvpaopao is about five times that of the overall market, and its retention rate is more than 2.5 times, according to statistics released by WeChat.

Hongguo had about 168 million users in July, up 107 percent from a year earlier, higher than long-form video platforms Tencent Video, iQiyi, Youku, and Mango TV combined, which is about 155 million users, according to the latest monitoring data from Chinese internet big data company QuestMobile.

WeChat launched Lvpaopao not as a proactive attack but as a form of traffic integration, an industry insider said, The Paper reported. Mini-programs of companies such as Jiuzhou Culture Media and Dianzhong Tech invested in advertising on WeChat, and WeChat earned advertising fees, so after they cut their investment in advertising, WeChat decided to enter this business to maintain advertising revenue, the insider explained.

In the short term, Lvpaopao is unlikely to bring significant changes to the industry, as producers will have to keep balancing revenue sharing across platforms, and users have already gotten used to Hongguo, a leading short drama producer said. In the long run, if WeChat relies heavily on channels such as ‌WeChat Channels to attract users, there is still a chance for Lvpaopao to stand out.

Users have very private and personal preferences when it comes to short dramas, said Han Jiazheng, professor at the School of Animation and Digital Arts at Communication University of China. Lvpaopao would let users’ WeChat friends see what they are watching, which could raise privacy concerns and create a social-psychological burden, making users less willing to watch dramas on the mini-program, Han explained.

Both Lvpaopao and Hongguo consider artificial intelligence-generated short dramas as their core business. Founder Securities believes that higher-quality, globalized, AI-generated content is the core theme of short dramas this year.

AI-generated lifelike simulation dramas have become the main driving force for platforms to attract users and release new products, with view counts exceeding the total of all AI-generated and animated short dramas in previous years.

Editor: Futura Costaglione