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China's movie box office revenue was 42.5 billion yuan ($5.8 billion) last year, compared with 54.91 billion yuan in 2023, and even lower than 43.78 billion yuan in 2015, according to data of China Film Administration.

In the past few years, short video platforms have developed rapidly, which have touched the cheese of the film and television market to a certain extent. The decline of the television market is even faster than the film market.

In 2023, the average daily usage time of short video services in China reached 151 minutes per person. It is difficult for some people to accept buying movie tickets and sitting in the cinema for two or three hours to watch a movie that can be watched for free in a few minutes of short videos.

In addition, the shrinking film market has also caused a decrease in the number of good movies, which has further aggravated the market's downturn. There were 12 movies with a box office revenue of more than 1 billion yuan each in 2023, and only seven in 2024.

In order to reduce investment risks amid the mounting downward pressure on the economy, some movie investors rely on novels and actors that have proven market appeal, showing no interest in supporting original scripts and less-established talent.

Also some films of poor quality have disappointed the market after whetting the audience's appetite through excessive marketing, causing many movie fans to lose their overall trust in the film market.

However, the main reason for the fast shrinking of the film market is that the industry's supply has not been meeting the audience's upgraded needs.

In the process of transforming into a modern industrial system, there has been a continuous weakening of creativity and willingness to take risks that has formed a vicious circle.

Some investors transfer the share of the income rights they obtained with an advantageous position at a premium, and even multiple rounds of such transfers can occur afterwards, which technically makes the film a financial derivative snowballing the associated risks and distorting the law of the film market.

As such, the root cause of the difficulty faced by China's film industry is not the impacts of the rise of the online short video industry, but that the film industry itself is in an urgent need of upgrading.

21ST CENTURY BUSINESS HERALD