The mud of 2025 remains to be gritty in our mouths as Hollywood seems forward to 2026 and wonders: Can it worsen? Will it?
The reply is – effectively, sure, it most likely will as a result of we’re watching the leisure trade remodel in actual time. With one other 17,000 jobs vaporized final yr, with a barely-rescued field workplace consequence and with December closing on the looming merger of market-leading Netflix with legacy model Warner Bros., we are able to hardly keep away from the plain: Hollywood has modified.
I’m not the primary to level out {that a} century-old enterprise mannequin has been disrupted, completely, by the rise of streaming and tech’s takeover of what was as soon as referred to as Hollywood. And I’m not even speaking about Oracle’s Larry Ellison shopping for Paramount from the Redstone household. Tech corporations Netflix, Apple and Amazon now outweigh Disney, NBCU, Paramount and no matter Warner Bros. will probably be when the sale of that studio shakes out. Google doesn’t even make content material, however its YouTube division remains to be larger – in income and viewers – than any competing TV platform.
Right here’s how I might summarize the yr:
* A home field workplace hovering at $8.9 billion, about even with 2024 however nonetheless far beneath pre-pandemic ranges of 2019.
* The sale of a significant Hollywood studio/conglomerate, the re-merged Paramount and CBS, to the Ellison household after extended negotiations and practical blackmail by the Trump administration.
* The break up of NBCU from its declining cable belongings, now referred to as Versant.
* The anticipated disappearance of a legacy Hollywood studio with the proposed break up of Warner Bros. from its declining cable belongings, pivoted right into a sale course of for the entire firm.
* The rise of YouTube because the singular, dominant tv platform.
* The flight of manufacturing from California.
* The decline of DEI efforts in Hollywood.
Is the patron higher off? That’s up for debate.
However the vibrant system that created prosperity for a 360-degree ecosystem of film studios, TV networks, producers, actors, writers, administrators, their brokers and managers and legal professionals, plus a complete net of below-the-line craftspeople and varied manufacturing consultants has receded over the horizon of historical past.
It doesn’t imply Hollywood is disappearing. The enterprise of creating tales for tv and films continues. However the alternative for monetary success is vastly restricted to the studios themselves and a rarified layer of expertise, whether or not that’s the super-writer-producer Taylor Sheridan or a tiny variety of stars like Tom Cruise or the “Frozen 3” forged Kristen Bell, Josh Gad and Idina Menzel.
The Hollywood enterprise mannequin has confronted shifts wrought by new applied sciences earlier than. That included including sound to the flicks, the invention of tv, the rise of cable after which premium cable, or the arrival of DVDs. For these prepared to widen the aperture of leisure, “change” has not all the time been a harbinger of “worse.”
As a pattern, technological change has usually meant a broadening of leisure to incorporate new codecs and features, often with the results of expanded alternative, income and earnings. In spite of everything, DVDs didn’t kill theatrical moviegoing, regardless of the troubles on the time. In truth it introduced a flood of latest client spending that floated film earnings for greater than 20 years.
However the newest wave of technological change has resulted in one thing totally different. Since 2010 or so, the arrival of streaming has sparked a disruption not seen earlier than, driving viewers to the all-you-can-eat smorgasbord of on-line leisure. With the extra disruption of the COVID lockdown in 2020, the general public has grown much less prepared to go to a movie show to see a movie that will probably be streaming on their TV only a few weeks later.
This shift is skewing the complete leisure trade additional towards tv, whilst “tv” has come to exclude broadcast and cable channels. (And by the best way “Broadcasting and Cable” has ceased to exist as a publication, I not too long ago realized.)
I’ve been having this argument with Hollywood company executives, each present and retired, as all of us survey the wreckage of 2025 and marvel what is going to come subsequent. My good friend Jeff Sagansky – at the moment a media investor who has run Sony tv, CBS Leisure and NBC – has warned repeatedly that abandoning the cash-rich cable networks, for which programmers stopped offering new content material a couple of years in the past, would hasten their extinction. Previous contacts attain out from their retirement havens in Hawaii or Portugal and confess how glad they’re to have gotten out of Hollywood once they did. Lovers of unbiased movie go searching for a saviour and discover none.
Peak TV has unpeaked. Bidding wars at Sundance are largely distant reminiscences. Who will make the goals for the dream machine?
“You’ll be able to hint the disintegration of Hollywood to Netflix making unique collection,” one in all these executives mentioned to me not too long ago, echoing the complaints of myriad others over the shortage of back-end earnings. “Take a look at the place we’re. It’s all coalescing round three or three-and-a-half corporations, that’s it. They’ve all taken their cue from Netflix. They’ve reduce. They personal all that’s on the air. Nobody will get another participation… They [Netflix] solely have 8% of viewing time, however they dictate the roadmap for a way the entire trade is functioning.”
What’s worse, he mentioned, “they’ve constantly ratcheted costs to client, yearly, manner above inflation.”
One other government, not too long ago retired, questioned what occurs to TV manufacturing if Netflix will get Warner, with its trophies of HBO, Warner Bros. Tv and Turner. “An enormous a part of Hollywood corporations is TV collection manufacturing. It hasn’t been motion pictures. So what the f–ok will occur with the middle of the visible leisure enterprise – that’s TV exhibits? What’s going to occur to that?”
All of this doom-telling and I haven’t even talked about the arrival of AI. That’s as a result of that explicit disruption has not but landed on Hollywood’s shores with two toes. However it actually will.
I’ll finish on one hopeful observe: disruption all the time means alternative. So if the leisure trade has contracted, that in itself has left house for brand spanking new concepts, contemporary merchandise, alternate platforms. I’m taking a look at you, Creators.
