The Economic Impact Of The Crash Of Hollywood
Hollywood is crashing.
To readers here, this is no surprise. It is well known by many who follow the industry closely. There are many channels on YouTube, for example, that chronicle the difficulties.
We are also seeing this make the mainstream media. The Los Angeles Times is one that covered the topic on a number of occasions, especially regarding the economic impact.
Because of this, it is a good time to look at the economic impact of the crash of this industry.
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The Demise of the Hollywood Economy
Entertainment is not disappearing. In fact, it is likely to grow in volume over the next few years.
What is changing is the fragmentation. This is something we covered quite frequently so no need to delve into it. Let us just say that large centralized entities producing entertainment content is not the future.
Instead, we are seeing the tentacles expanding in different directions. This is causing major problems for the Los Angeles area. The industry adds an estimated $115 billion to the local economy. When we consider the size, that is not surprising.
The effects of the decline are being felt everywhere.
The actor and aerial cinematographer turned his hobby of flying drones into a profitable business in 2012 just as the streaming wars were taking off. For a decade, he was flying high above film sets, creating sleek aerial shots for movies and TV shows on Netflix, Amazon and Disney.
Now he’s on the verge of becoming homeless - again. He was evicted from the Huntington Beach home he shared with his wife and two young children and nOowis being booted from the Las Vegas apartment they moved to because they could no longer afford to live in Southern California.
This is what often gets overlooked. The major stars are going to be fine. If you know an actor or actress by name, unless a total financial fool, they should have few problems with money.
We cannot say the same thing about those who got bit parts or were not in front of the camera. Set people, script writers, and others jobs are being affected. As was the case with Michael Fortin, the one in the quote above, he had to locate outside the area.
Another thing that gets overlooked is the tentacles of the industry. There are many businesses that benefit from the money generated by the industry. restaurants, bars, and tourism are a few of the areas that are enhanced. As things consolidate, the revenue of the companies starts to go away.
No Turning Back
We are talking about billions that are at stake. If the number for the local economy goes from $115 billion to, say $70 billion, that is a huge hit. My estimation is things could go a lot lower.
There is no turning back from this. As I follow this topic, there are many reasons people give for the downturn. If this was the case, then it would be a situation that could be solved.
And along with the streaming bubble bursting, some productions are also being lured away from California by attractive tax incentives in other states and countries. Los Angeles leaders are so concerned about the slowdown that Mayor Karen Bass created a task force last month to consider new incentives for film production in Hollywood.
This is typical.
While there are incentives out there to lure production away, it is not the basis of this problem. Therefore, incentives will do no good.
The reality is that, companies that relocate, are going to be in as much trouble wherever they locate to. While they might enjoy lower costs, it is only delaying the inevitable.
Hollywood has no more of an answer for this than newspapers. That industry was wrecked a couple of decades ago. Today, we see it as a microcosm of itself.
Here is the model from which things will evolve. Notice how there is no shortage of news. In fact, it is everywhere. That is why newspapers were done. People can turn to a number of places to get what they need in this regard. Instead of a local paper bringing the news, there are millions of websites (along with social media) that people can turn to.
We are seeing the same thing arrive with video. No longer are the broadcast networks and Hollywood studios the only one to distribute video content. YouTube is the one garnering all the attention but that is only the beginning. We are going to see this spreading out even further as video appears in more locations.
All of this is before we even start the discussion around generative AI.
Hollywood is being disrupted by technology. What we are witnessing is how industries collapse when this takes place.
It is something that we saw many times before.
The one difference is little is more public than Hollywood. Even the retail apocalypse was not as well known as this one.
For Los Angeles, the economic impact is into the billions. The only question is how many they will loss from their local economy.
It is not a situation that is going to get any better.
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it's going down diddler going down. jayz next, beyonce next. we gonana see a rebirth; hopefully a pedo free rebirth :x
Well that isnt really the focus of the article but you are likely correct....there will be a lot of famous people who could be caught in this net. We will see.
ya I know but it made me think of that because of all the videos I've seen with the allegations and stuff. we will see for sure sadly the court thing is only in May rip
Honestly, this isn't really news at the moment, so owners who are following your articles up, Hollywood is going through a lot, it's employees aside the stars are taking the first heat of losing their job, that many probably thought they would retire in, it's devastating honestly, and it's not that easy for them to adapt to the new world, so earn from youtube or web 3.0 to make ends meet, it's not exactly visible due to many factors such as: value of the token, cost of starting your own channel and all the consistency involved.
It is not a pretty situation for many of them. Those who are not in the spotlight are taking it on the lip. They are the ones suffering first.
The executives, actors/actress, and major agents will emerge okay. The rest, it is going to be a ngihtmare.
I say, good riddance.
What Hollywood served us as entertainment in the last couple of years (I'd even suggest, this rapid decline in quality began over a decade ago), was left-wing identitarian slop with divisive and hateful messages, not very cleverly disguised as "stories" by people, who clearly were hired and promoted not on a merit-based system.
They certainly did that but they were going down even without that shift. Technology means dilution was going to happen regardless. It might have hastened it.
The largest streaming service, by a wide margin is Google with YouTube. That shows everyone how eyeballs are going someplace different.
You're correct, but look at Japanese and Korean movies/TV shows suddenly popping up on US streaming services and outperforming most of the "Western" stuff.
Quality is down due to ideological reasons and viewers have left in droves because of that in my opinion.
I was and to a certain degree still am a big TV show and movie nerd and I loved almost anything the 90s, naughts and the early 10s gave us, with cringe moments of realizing, I am being "educated" by a sudden influx of ideology. It got so bad so quickly, that I don't watch any Hollywood stuff anymore. I presume, there are many people like myself, and they found something else in different places.
I don't think we would see the crumbling of this once mighty industry, if this ideological shift didn't happen, and I don't mean the left ideological bend Hollywood always had.
I mean this new monster, that affects every aspect of the American culture and American political discourse now and has infected its European, Canadian and Australian vassals as well.
We did see it with the newspapers and record companies as the technology disrupted. It was only a matter of time before video was disrupted in the same manner. The key is the monopoly on video distribution was broken by the internet. It took a while for the creation side to catch up along with the technology. When YouTube came out, most were still on dial up.
Would the pace have accelerated? Who knows. The lockdowns also had a part in it as does ticket pricing. I do not deny they are factors.
However, I think the overriding factor is technology, the last disruption. The next one, AI, is really going to crush what is standing with Hollywood.
And I will celebrate its demise and hope for a creative revival of American entertainment.
AI will be big, and I'm playing with it myself.
AI is going to take over the entertainment industry. We are going to have personalized entertainment.