The Truth Behind the “Cold Winter” in the Film Industry: It’s Not About a Lack of Projects, but the Collapse of the “Middle Layer”
Hello everyone, I’m your financial journalist and economist. Recently, Hu Ge made a candid statement in an interview with GQ: “The film market is very realistic; if you can’t recoup your costs, the opportunities you have become even fewer.” This might sound harsh, but it reflects a profound and painful structural transformation that the Chinese film industry is undergoing.
Many people see this as a “cold winter,” but to me, it’s more like a sudden change in climate. The industry used to be like the four seasons—cold in winter and warm in spring. Now, it’s like global warming, with ice caps melting and sea levels rising, causing many old models (such as low-to-mid-budget films) to disappear forever.
Below, I’ll break down this news into five key aspects to explain what’s happening and what the future holds.
---
1. The Rules Have Changed: From Focusing on Acting to Focusing on Risk Management
In the past, when we chose actors, we looked at how well they performed and whether their roles posed challenges. But now? We’re interested in whether they can help investors recoup their investment.
Actors like Hu Ge, Song Jia, and Zhao Youting are top-tier performers with numerous awards. So why do they suddenly have fewer roles or long gaps between projects?
- Hu Ge’s Dilemma: His recent films (such as *Bu Xu Zhi Xing* and *Zou Zou Ting Ting*) received positive reviews and awards, but their combined box office was only over 200 million yuan. In the eyes of investors, that’s a loss.
- Song Jia’s Gap: The Golden Rooster Award-winning actress hasn’t worked in a new project for 8 months since finishing her last film.
- Zhao Youting’s Struggle: “If no one wants to work with me, how can I make films?”
Core Logic: The film industry used to allow for mistakes—you could lose money on an art film and build a reputation to make up for it with a commercial one. Now, the tolerance for failure is almost zero.
- In the Past: Actors were seen as artists, and their works as works of art.
- Now: Actors are considered assets, and their films are financial products.
Investors no longer ask, “Does this role perform well?” They ask, “How much risk is involved? If the box office falls short of expectations, will I lose all my money?” This has led to a cruel reality: only projects with proven, “safe” combinations of popularity and big IPs get funding. Even talented actors with unstable commercial box offices are temporarily marginalized. This is a financial risk management issue, not an artistic one.
---
2. The Industry Structure is Collapsing: The “Middle Class” is Disappearing, Leaving a “Dumbbell-Shaped” Industry
This is the most crucial economic insight of the article. The film industry used to be pyramid-shaped, with a few high-budget blockbusters at the top and many low-cost content at the bottom.
- The Top: Superblockbusters like *The Wandering Earth* that make huge profits.
- The Bottom: Low-cost micro-series and web dramas.
- The Middle (the Key): Medium-budget films (thriller, crime, romance, comedy) that were the backbone of the industry.
- **New directors and actors developed their skills here; second- and third-tier actors built their careers here; technicians made a living here; audiences formed their viewing habits here.”
What’s happening now? The middle layer is collapsing.
- Where the Money Goes: Funds either go into billion-dollar blockbusters or into low-cost micro-series that generate quick returns.
- Result: The industry has become “dumbbell-shaped”—with only two extremes, and nothing in between.
Why is the middle layer disappearing? Because micro-series are too profitable. The cost of a micro-series is a fraction of that of a film, and they can recoup their investment in days. Investors, seeking high returns, prefer low-risk options. As a result, actors like Song Jia and Zhao Youting, who are suitable for medium-budget films, have fewer roles.
---
3. The Truth Behind the Numbers: Global Trends of “Deleveraging,” but at Different Rates
The article mentions an unexpected phenomenon: China’s box office has plummeted, while North America’s summer season has set records. Does it mean China is failing, and the U.S. is thriving?
No. The global film industry is experiencing a reduction in projects, just with different patterns.
- China: Box office down 40.6% in the first half of 2026; viewership down 34.2%.
- Reasons: Audiences are tighter with their wallets, and content like micro-series, games, and short videos have drawn their attention.
- The U.S.: Box office was strong (films like *Odyssey* and *Spider-Man*), but Hollywood’s production decreased by 20%-28%.
- This means: Fewer films are being released, but they are all superblockbusters.
Core Logic: Everyone is reducing their risk and clearing inventory.
- In the Past: 100 films were made a year, with 10 blockbusters and 50 making small profits; the industry was still thriving.
- Now: Only 20 films are made, all high-budget, with the bet being on big hits. If they fail, the entire industry suffers.
So, the “cinema boom” is a illusion—a result of concentrated resources on top-tier projects. The real production side (studios, crews, writing teams) is still struggling.
---
4. The Competition has Evolved: Films No Longer Compete Only with Other Films
In the past, the biggest competitor to a film was another film. Now, the biggest competitor is your time for the day:
- Competitors include: 15-second short videos on TikTok/快手, 1-minute micro-series, immersive games, and podcasts/AI-generated comics.
Why are films losing? Because of the change in value for money.
- Watching a film: 100 yuan for 2 hours might feel tedious.
- Watching a micro-series: Free or a few yuan for 10 minutes, with intense content and emotional impact.
Core Logic: Audience attention is a scarce resource. When low-cost, high-stimulus content (micro-series and short videos) can meet entertainment needs at low cost, traditional films must offer something unique to stay relevant.
If a film can’t provide the depth, visual impact, or emotional connection that micro-series offer, it will be abandoned.
---
5. The Way Forward: Stop Spending Money and Focus on Making Quality Content at Low Costs
The article offers two practical suggestions for the industry to overcome this:
1. Redefine “quality”: Allow low-budget projects to survive.
- Misconception: Quality = big stars, special effects, and expensive sets = high costs.
- Reality: A healthy industry needs a “long-tail effect”—films that make small profits but still contribute to the ecosystem.
- A 20-million-yuan film should make 10 million; an 8-million-yuan film should make 5 million.
- These small wins are essential for the industry’s survival.
If only high-budget projects like *The Wandering Earth* are allowed, the industry will be fragile. How many such projects can there be in a year to support millions of workers?
Suggestion: Investors should invest in low-budget films, and platforms should support them. Only by making low-cost, high-return content can new talent emerge and create the next big hit.
2. Actors Should Return to Their Essence: Acting Skills Are the True Value
- Current Trend: Actors are expected to have followers, be good at live streaming, appear in variety shows, and generate buzz.
Future: As the popularity trend fades, content will be the key.
- Hu Ge’s *Bu Xu Zhi Xing* performed well despite average box office but gained recognition for its quality, showing that good content has lasting value.
In Summary: The “cold winter” in the film industry is a major reshuffle.
- What will die: Models that rely on stars, excessive spending on special effects, and low-quality content.
- What will survive: Projects that tell good stories at low costs, target specific audiences, and provide unique emotional value.
Implications for Everyone:
- As Audiences: Don’t expect big films every year; learn to appreciate low-budget quality films and support those that tell meaningful stories.
- As Industry Professionals: Don’t rely on big productions; try creating solid content with lower costs.
- As Investors: Don’t focus only on the top; look for small, high-quality projects that offer real returns.
The winter isn’t scary; what’s scary is burning the seeds of spring in the process. Now is the time to sow again.