The "gold coin function" of Hongguo has been shut down, bringing an end to the era of traffic subsidies for free short dramas.

Today, Hongguo Short Drama officially announced that it will phase out the gold coin incentive feature in stages, and the familiar model of "earning gold coins by watching dramas and cashing out gold coins" for users is about to exit the market.

Specifically, new users will no longer be granted access to the gold coin feature starting from November 1, and the gold coin feature will be fully phased out before December 31.

The announcement clarifies that the gold coins and balance rights of existing users will be retained, and a sufficient cash withdrawal window will be set. The platform will no longer use cash incentives to induce users to binge-watch dramas just to make money.

This is not a simple product function adjustment, but a landmark inflection point for the free short drama track.

This means that the traffic expansion cycle that relies on cash subsidies to exchange for viewing duration and boost daily active users has officially reached its peak. The short drama industry is shifting from the barbaric growth stage of "snatching users and piling up supply" to a stable competition stage of "relying on content to earn revenue from advertisements and memberships".

There is no doubt that the era of traffic subsidies for free short dramas has come to a phased end.

The gold coin in the past was a growth weapon to buy viewing duration at low cost

Looking back at the rise path of Hongguo, the gold coin system is one of the core engines that helped it quickly reach the top of the industry.

After 2023, free ad-supported short dramas (IAA model) rose rapidly, forming a competitive position against pay-to-unlock short dramas.

Hongguo's strategy was simple and straightforward: watch dramas for free, plus superimpose gold coin incentives.

Users watch dramas, check in, and complete tasks to accumulate gold coins, which can be exchanged for small amounts of cash for withdrawal. In order to withdraw cash, users actively extend their online duration, repeatedly open episodes, and finish one ad after another. The platform obtains impressive data of daily active users and stay duration, then packages the traffic and sells it to advertisers, forming a closed loop.

This model was extremely effective during the industry dividend period, allowing Hongguo to reach 168 million daily active users in just three years, exceeding the sum of daily active users of the four long video platforms iQiyi, Tencent Video, Youku and Mango TV, and becoming one of the video apps with the most staggering user duration across the entire network.

But this growth model has inherent flaws from the very beginning of its birth.

Most of the traffic bought by gold coins is not "drama-watching users", but "welfare-seeking users".

Their primary goal of opening the app is not to watch stories, but to accumulate gold coins for cash withdrawal. It does not matter whether the episodes are good or not, what matters is whether they can brush up the duration and complete the tasks. A large number of invalid plays and mechanical drama-watching increase the cost of the platform, but cannot be converted into stable advertising value. Advertisers gradually find that the exposure data is very impressive, but the real conversion rate continues to decline.

At the same time, derived complaints, cash withdrawal disputes and compliance disputes continue to accumulate. The regulatory authorities have continuously tightened the standards for various "make money by watching videos" online earning gameplay. With the implementation of the Administrative Measures for the Development of Micro Short Dramas, the gameplay of simply attracting users through subsidies has gone against the regulatory direction and the long-term goals of the platform.

Earlier, Hongguo had already taken action on the supply side and cancelled the minimum guarantee policy for producers. The 10,000-play revenue in the industry dropped from nearly 100 yuan at the peak to the range of 5-10 yuan. The vast majority of small and medium-sized teams lost their safety cushion, and the industry production capacity was cleared rapidly.

First, the minimum guarantee on the supply side was cut, then the gold coin incentive on the user side was removed. Hongguo's logic is obvious: the platform is no longer willing to pay for "false prosperity".

What does the phase-out of the gold coin feature mean?

1. The user dividend has peaked, and short dramas no longer need to burn money to expand scale

The total de-duplicated users of domestic short dramas have exceeded 850 million, basically reaching the ceiling of internet users. There are fewer and fewer new users, and incremental competition has turned into stock competition. When the market has grown large enough, the primary goal of the platform has shifted from "snatching users" to "improving quality".

The underlying logic of the gold coin model is to pay for traffic. When users are scarce, this investment is cost-effective; when users are no longer scarce, continuing to spend money to subsidize welfare-seeking users is pure consumption.

Hongguo's choice to shut down the gold coin feature shows that what the platform pursues next is no longer the inflated duration figures on the report, but effective viewing and real users.

2. Shift from subsidy-driven to content-driven dual-track model of advertising + membership

In the past, the logic of free short dramas was very simple: exchange subsidies for duration, and exchange duration for advertising revenue. However, advertising revenue is naturally highly volatile and highly dependent on exposure quality. The more false the duration is, the easier it is for the advertising ecosystem to fall into a vicious cycle.

Cutting off the gold coin incentive is equivalent to forcing users to return to the content itself. The users who stay are attracted by the plot hooks and character stories, not retained by a few yuan of cash withdrawal red envelopes. Such users have higher advertising value and are easier to convert to paid members.

Hongguo has already tested the membership system before, which is building a second stable cash flow beyond advertising.

The survival formula for free short drama platforms in the future is: good stories retain users, and user attention is monetized, instead of buying attention with cash.

3. The involution logic of the short drama industry will also change accordingly

The exit of gold coins will be transmitted upward along the industrial chain, directly affecting hundreds of thousands of short drama creators, especially AI short drama teams.

In the gold coin era, as long as there is playback volume, there is revenue, even welfare-seeking traffic can get a share of the money. After the gold coin incentive disappears, the value of invalid playback returns to zero. Whether the work can retain real audiences, undertake advertisements, and form a good reputation has become the only criterion.

After the exit of gold coins, short dramas enter the "value verification period"

The exit of gold coins is not the death of the free short drama model, but a sign of its maturity.

Almost all internet cultural and entertainment tracks have gone through the same path: attract new users through subsidies, achieve rapid volume growth, explode in supply, get involved in regulation, reduce subsidies, realize survival of the fittest, and pursue high-quality content.

Web movies are like this, short videos are like this, live streaming is like this, and short dramas are no exception.

In the past, creators competed on who was willing to burn money and who could achieve mass production faster. Next, they will compete on who can tell better stories.

For screenwriters, directors, and production teams, when the bubble dissipates, it is the time to truly test their creative capabilities.

It is conceivable that workshop-style teams that copy other people's works in batches and apply templates will be cleared out faster. High-quality teams that devote energy to polishing scripts, creating vivid characters, avoiding homogeneous routines, and obtaining stable revenue sharing through user retention and good reputation will be the winners in the future.

Of course, the track will not disappear. As a national-level cultural and entertainment consumption form, users' habit of watching short dramas has been stable, and what changes is only the way to make profits.

A healthy model is that the platform no longer needs to subsidize traffic, but good content earns revenue from advertisers and audiences who are willing to pay.

⬆️ Announcement on Hongguo Short Drama's Plan to Phase Out the Gold Coin Feature ⬇️

Hongguo Short Drama plans to phase out the gold coin feature in stages: it is expected that starting from November 1, 2026, the gold coin feature will no longer be provided to new users; before the end of December 2026, the gold coin feature will be fully phased out.

The specific plan is as follows:

1. Starting from November 1, 2026, users who are newly activated on and after that day will no longer have access to the gold coin feature and related entrances. Users who have been using the gold coin feature before will not be affected at this stage and can continue to use it normally.

2. Before December 31, 2026, Hongguo Short Drama will phase out the gold coin feature for all users and stop distributing gold coins. Please pay attention to subsequent announcements for specific arrangements.

3. The rights and interests of the gold coins and cash balance you have obtained will not be affected. Before the adjustment of the gold coin feature, we will continue to remind you through relevant page notifications and other methods, and set aside sufficient time for gold coin exchange and cash withdrawal.

The specific deadline and relevant arrangements will be notified separately, please pay attention to subsequent announcements and in-app reminders. If you have any questions, you can contact the customer service of the Hongguo Short Drama App.

Hongguo Short Drama

October 21, 2026

This article is from the WeChat official account "Wangshi Hulian", author: Wangshi Hulian, published with authorization from 36Kr.