Huanyu: Chinese Period Epics and the Rise of Mini Dramas

This case (also available in Simplified Chinese) unfolds the dilemma faced by Yang Le, CEO of Huanyu Entertainment (Huanyu) as her company embarks on scaling mini-drama productions – a new entertainment genre, evolving within an industry increasingly reshaped by Artificial Intelligence (AI). Huanyu’s core competence in producing Chinese period dramas, had found significant commercial success. Partnering with over-the-top (OTT) platforms like iQiyi, Netflix and Amazon Prime had contributed towards this success. Mini-dramas were triggered by market dynamics. China’s film and entertainment industry was going through a structural shift with viewers preferring short form content. The mini-drama market was slated to surpass US$9.3 billion and reach over 660 million viewers by year end. Huanyu had aired its first ever mini-drama, Lucky Strike (吉天照), in early 2025, and then two other mini-dramas. Yet the new venture was not short of hurdles. A key challenge was to balance shorter delivery time with engaging ‘snackable’ content. The second bottleneck was low unit economics, as mini-dramas could open additional monetisation possibilities but had lower per episode revenue. Platforms often claimed ownership of intellectual property (IP) and captured the lion’s share of advertising revenue. The third challenge was to make mini-dramas attractive to younger audience. The fourth challenge was global expansion, which required strategic distribution partnerships. Should Huanyu continue prioritising long-drama period epics or shift towards the fast-growing mini-drama segment? This case helps students understand (1) Market entry strategies in a low-end disruptive market (mini-dramas); (2) AI as a disruptor and Innovator’s Dilemma; (3) Trade-offs among core competence, existing business model, and innovation; and (4) use the Dynamic Capabilities framework to determine a trend as a structural shift. Inspection copies and teaching notes are available for university faculty. To receive an inspection copy and teaching note, please email ccxshop@smu.edu.sg with your registered faculty email ID and a link to your contact information on the faculty directory at your university as verification. An inspection copy and teaching note will then be sent to your faculty email account. Download information SMU Faculty/Staff can download the case & teaching note on iNet with your SMU login ID & Password via the following links: · The Case (SMU-26-0010) · Teaching Note (SMU-26-0010TN) For purchase of the case and supplementary materials via The Case Centre, please access the following links: · The Case (SMU-26-0010) · Teaching Note (SMU-26-0010) For purchase of the case and supplementary materials via Harvard Business Publishing, please access the following links: · The Case (SMU-26-0010) · Teaching Note (SMU-26-0010)