Summary of the Analysis
This analysis casts a damp shadow on what appeared to be a “steadily improving” 2026 Chinese film summer season: On the surface, the total box office of 12.4 billion yuan set a new record, marking three consecutive years of growth in the summer season’s box office. However, upon closer inspection, this growth is largely superficial—most of the additional revenue came from imported films, while the total box office for domestic films actually decreased year-on-year. The majority of the box office was captured by a few top-tier blockbuster films, leaving little profit for smaller and medium-sized productions. Looking upstream, film investment and the number of new projects have plummeted in the past two years, meaning the industry is relying on projects funded earlier. This situation lays the groundwork for a shortage of new films in the next 2-3 years. On the downstream side, there are more and more cinemas, but the average number of viewers per show has dropped to less than 9, and ticket prices have become increasingly low, resulting in poor profitability for cinemas. At the same time, it has become increasingly difficult to attract audiences; films without unique appeal struggle to attract viewers, leading to a vicious cycle where all films try to release during the “golden periods,” leaving ordinary times with very few releases.
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Simplified Explanation of Key Points
1. The “inflated” box office figures for the summer season
People often assume that an increase in the total box office means the industry is doing well, but this summer’s growth wasn’t driven by domestic films. While the 2026 summer season’s box office was 532 million yuan higher than 2025’s, the box office for domestic films actually decreased by 157 million yuan. It’s like if the entire food street below your apartment saw a rise in sales this year, but most of the increase came from new foreign fast-food restaurants, while all the Chinese restaurants combined earned less than last year. The wealth gap in the industry is even more pronounced: 18 films earned over 100 million yuan this summer, with the top four films accounting for 61% of the total box office, while the remaining 14 films together earned less than 40%. Many of the smaller films barely made back their production costs after just two weeks of release. In other words, 90% of the industry’s practitioners are struggling more than last year.
2. Films released this year are mostly from two years ago
It takes at least 1-2 years to produce a commercial film from funding to release. The films you see in cinemas this year were mostly funded around 2024. However, in 2023, over 700 films started production, but in 2025, only 200 did. This means we’re currently relying on resources from 2024, and in two years, we’ll run out of new content. The situation for film companies is dire: more than half of the 15 listed film companies were still losing money in the first half of the year. Even Light Media, which made over a billion yuan from “Nezha,” saw its profits drop by 98% this year. Investors are now very cautious, with 9 out of 10 films resulting in losses. This contraction in supply is not just a potential issue; it’s already a reality.
3. Audiences have become more selective
Audiences are no longer willing to buy tickets for just any film, especially those with no unique appeal. A mediocre romance or comedy film used to sell for tens of millions with effective marketing, but now that’s not enough. Films need to be either IMAX-exclusive (with significant IMAX revenue) or highly buzzed-about online to attract viewers. There are no longer “blockbuster” films that appeal to everyone; the audience is highly segmented. Cinemas are also struggling, with fewer and fewer people attending each show, and ticket prices are low, leading to poor profitability. They’re forced to focus on top-tier films, leaving smaller films with little chance of success.
4. The industry is competing fiercely for the golden periods
Films are rushing to release during the summer, Spring Festival, and National Day, which are considered the “golden periods” due to high attendance. However, this competition leads to overcrowding and decreased attendance. For example, the Qingming and May Day periods had combined box offices of only 300 million and 700 million yuan, respectively. Big-budget films fear low attendance, so they avoid these periods, while smaller films struggle to make a profit. This creates a vicious cycle where all films try to release during the golden periods, further weakening ordinary times. There are already examples of this; for instance, “A Letter to Grandma” didn’t release nationwide immediately but started with limited screenings in a few cities, gaining popularity through word-of-mouth before expanding. Small-budget films can survive by targeting their core audience and gradually building their market. If all films focus on the golden periods, the rest of the year will be quiet for cinemas, further shrinking the industry’s overall market size.