Pacific Securities: AI Video Model Iteration Accelerates, IP Value Revaluation is Timely

On March 16, Pacific Securities released an analysis report on the film and television industry, pointing out that video models are accelerating their iteration. L3 short-form capabilities can now meet some needs of film and TV production, pushing the industry into an AI popularization phase. AI-produced animated dramas have a penetration rate of 50%-80%, with fully AI-generated realistic dramas rapidly increasing in volume. The global AI video penetration rate is only 1.4%, leaving significant room for growth. IP companies are expected to benefit first from content library resources.

Models are accelerating their iteration, and L3 short-form capabilities can now meet some film and TV production needs

In terms of models, overseas video models have made breakthroughs in cutting-edge capabilities such as physical simulation and fidelity. Domestic models continue to catch up with leading overseas models, focusing on controllability, multi-modal interaction, and local scenarios to form differentiated competition. Specifically, current native resolution of video models reaches nearly 2K, with single-generation duration up to 25 seconds. They also support synchronized audio and video output, improving controllability of generated visuals and storytelling, more accurately simulating real-world physical laws, character movements, and expressions. Additionally, lightweight models are released to reduce costs and improve quality and stability. In content generation, mainstream models currently support L3 short-form content creation, with some capabilities reaching L4 long-form content requirements, to a certain extent meeting the needs of the film and TV industry.

The film and TV industry is entering an AI popularization phase, with significant room for growth in penetration rate

Relying on rapid iteration of video models, AI video tools are gradually empowering film and TV production: 1) Animated dramas: AI application in content creation has reached 50%-80%, leading to explosive growth in animated drama supply, with AI animated dramas accounting for over 70%. 2) Live-action short dramas: evolving from “AI + real shooting” to fully AI-produced content, AI realistic dramas are rapidly increasing in volume; top works like “Zhan Xian Tai” achieved over 100 million views within six days of release. 3) Movies and TV series: mainly assisted by AI in production. AI animation films have already been launched, while live-action films are still in the early stages. AI significantly reduces costs in filming, shortens content production cycles, and enriches content themes and formats to improve efficiency. Looking ahead, the global video production market is about $316.3 billion, with the global AI video market at approximately $4.5 billion, representing only 1.4% penetration, still at a relatively low level.

Video tools as the core, IP segments benefit the most

AI video tools are the carriers that translate model capabilities into practical productivity. They depend on both model technology support and professional video content production experience. Currently, a collaborative development pattern has formed among video models, IP and film/TV companies, and third-party tool providers. In the future, AI video tool companies with technological advantages are more likely to leverage their creative capabilities and platform ecosystems to produce high-quality video content. Meanwhile, IP companies, with vast videoable content libraries, are expected to benefit fully from the maturity of AI video tools.

Since 2025, domestic and international video models have accelerated their performance breakthroughs, now capable of L3 short-form content production, driving the global film and TV industry into an AI popularization phase. Currently, AI penetration in the film and TV industry remains in the single digits. With further iteration of models and video tools, industry penetration is expected to see explosive growth. As the carrier, AI video tools highlight core value in the industry chain. Additionally, IP companies are expected to benefit significantly from this wave, leading to a reassessment of content asset values.