By Sherry Qin

China relaxed its rules on drama production to strengthen content supply, which analysts say would benefit producers and long-video streaming platforms.

China's broadcast watchdog plans to ease restrictions on the number of episodes for TV series and intervals between each season for dramas, the National Radio and Television Administration said in a statement late Monday.

The regulator had previously set a cap of 40 episodes for TV series and a one-year interval for broadcasting seasonal dramas.

China will also strengthen the production of documentaries and animated movies, while welcoming imported content and high-quality short dramas to TV broadcasts, it added.

"These measures may help revive the long-form drama industry from the impact of the previous strict regulation by the China watchdog and audience churn to short-from video content," Nomura analysts said in a note.

In recent years, Chinese audiences have grown more accustomed to and spent more time on micro dramas. These dramas could be as short as one minute for each episode, and often feature steamy romances and tangled family dramas.

The policies bode well for "drama content producers and long video platforms given likely more diversified content supply, shorter regulatory review time, and potentially more monetization potential," Citi analysts said in a note.

Citi thinks that leading Chinese drama producers, including China Literature and Damai Entertainment, would directly benefit from the easing of production restrictions, while long-video streaming platforms such as iQiyi and Mango Excellent Media would benefit from more diversified content to serve changing consumer demand.

Shares of media companies were mixed on Tuesday following strong gains the previous day fueled by speculation about the regulatory proposal.

Damai Entertainment was down 0.7% in morning trading in Hong Kong after ending 10% higher on Monday, while China Literature was 1.44% higher after gaining 15% the previous day.

Still, Nomura analysts are cautious about a recovery in China's long-form video industry.

"While an easing regulatory environment helps, content creation capabilities remain crucial for producing high-quality long-form content that can re-engage viewers," they said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

August 18, 2025 23:52 ET (03:52 GMT)

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