Summary of the News
This analysis discusses a counterintuitive phenomenon in the film and television industry in 2026: the first domestically produced, fully AI-generated growth drama, "The Post-Journey to the West," immediately became the number one most-watched show of its time upon release, propelling its producer, Mango HyperMedia, to achieve two consecutive 20% price increases on the stock market. This success led to a surge in the prices of AI-related film and television stocks. Meanwhile, the total box office for live-action films during the 2026 summer season reached 12.498 billion yuan, with 340 million viewers, setting new records for three consecutive years, completely shattering the previous assumption that the emergence of new AI technologies would inevitably lead to the decline of traditional live-action films and television. The conclusion drawn is quite counterintuitive: AI is not a threat to traditional media; rather, it is a tool that enhances the efficiency of the industry. What AI has truly eliminated are the low-quality, mediocre works that have thrived in the past due to information asymmetries and poor production practices. Instead, it is forcing the industry to focus on creativity and authentic expression.
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Plain Language Explanation
1. The Capital Market is Speculating on the "Imagination Value" of AI in Film and Television
Many were surprised when Mango HyperMedia's stock price soared by 20% twice in a row. The company's semi-annual report clearly stated that its profits had dropped by 73% in the first half of the year, and even Mango itself acknowledged that AI-related revenues accounted for a very small portion of its total income, not enough to support its performance. Other film and television companies, such as Huanrui Century and Bona Film, also warned about the risks associated with AI, noting that AI had not yet generated significant profits. However, investors ignored these concerns and drove the stock price up, largely based on their belief that AI could reduce production costs and introduce new innovative methods in the industry. Similar phenomena have occurred before: for example, the low-budget documentary "A Letter to Grandma" became a viral hit, but its producer's stock price only increased by 18% before falling back to its original level within half a month. Such speculation is often unfounded and does not lead to long-term success. Only companies with exclusive intellectual property and a deep understanding of content quality will survive; those that merely rely on AI trends will quickly be exposed.
2. AI Dramas and Live-Action Films Do Not Compete: Their Audiences Are in Different Universes
Many thought that AI dramas would compete with live-action films for viewers, but in reality, their audiences are largely distinct. The audience for AI dramas consists of those who previously enjoyed free, high-quality short videos. With AI, the cost of producing videos has dropped significantly—creating a 90-minute drama now costs only about 2,000 yuan. This has made it possible to produce high-quality content in genres that were previously unaffordable, doubling the audience base in just one year, with users watching an average of one and a half hours of content per day. However, AI dramas have not yet gained widespread popularity. In the first half of 2026, 220,000 AI dramas were released, but only about 1,000 of them exceeded 100 million views, accounting for less than 1% of the total. The box office for the first fully AI-produced theatrical film was only 15 million yuan, indicating that AI dramas are still dominated by the free, low-budget market.
3. AI Cannot Replace Humans as the Core of the Film and Television Industry
No matter how advanced AI becomes, there are fundamental limitations that prevent it from taking over the industry. First, copyright laws do not recognize AI-generated content as legitimate property; if someone copies such content, the creator has no legal rights to protect it. This means that AI-generated content cannot be valued as an asset on a company's balance sheet and can only be used to reduce production costs. Second, AI lacks genuine human experiences. While AI can create visually appealing content, it cannot replicate the emotional depth and personal insights that come from real-life experiences. When everyone can use AI to produce passable visual effects, what truly sets apart good content is the creativity and thought that come from human beings.
4. AI Does Not Eliminate Quality Content; It Only Removes Low-Quality Works
Data shows a clear decline in the number of new live-action short films on platforms: from 432 in February to 110 in June, a reduction of three-quarters. The eliminated works were mostly low-quality productions with poor production values. AI has reduced the barriers to making content, making it easier for companies to produce better-quality films. As a result, only the low-quality, mediocre works that relied on cheap production methods are being phased out.
5. The Cycle of Film and Television Technology: It Is the Laziness, Not the Content, That Dies
This is not a new phenomenon in the industry. In 1927, the advent of sound films led to claims that silent films were dying, but silent film as a format simply gave way to color films, which continued to be used for classic works like "Schindler's List." AI is similar to previous technological advancements; it frees creators from tedious tasks, allowing them to focus on creativity. The industry will eliminate those who do not put effort into producing high-quality content and instead rely on easy shortcuts to make quick profits, pushing everyone back to the essence of creating meaningful and engaging content.