AI Micro-Drama Turmoil in China

China's AI micro-drama market faces a crisis: 95% of production is AI but <4% of views, 90% of AI contractors losing money. Red Fruit removes 3,522 titles, actor exodus at Hengdian. New NRTA regulations take effect September 1. However, positive signals like HolyWater's 23.6% paid conversion and AI virtual star Fang Taozi's commercialization show pockets of success.