Overseasidol.com — Gong Yu, founder and CEO of iQIYI, has raised concerns about the current state of the film and drama industry, highlighting rising production costs as a major challenge.
He shared his views during an industry forum at the Beijing International Film Festival on April 17.
According to Gong Yu, production expenses across both film and drama, whether for traditional media or online platforms, have reached unsustainable levels.
From an investment perspective, he noted that losses are becoming more common, while profitability is increasingly difficult to achieve.
He revealed that only about 30 percent of online drama productions are currently profitable, with the figure rising to around 40 percent in the best-case scenario.
Over the past decade, continuous cost increases have significantly raised financial risks, leading investors to scale back their involvement and resulting in fewer new projects being produced.
Gong Yu also pointed out that audiences now have more entertainment options than ever before.
When traditional films and drama series fail to attract viewers, audiences tend to shift toward alternatives such as short-form dramas and digital content.
He described this trend as a variation of the “lipstick effec”, where consumer demand persists but shifts toward more accessible and cost-effective formats.
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