When industries implode, it is brutial. This is what happens when technology takes over.
For the last few years, I monitored the disrtuption that is befalling this industry. Technology was starting to penetrate which was a major problem for llL involved. The situation was compounded by some major miststeps taken by both the studios and unions.
Unfortunately for those involved, we are only starting to see the carnage. The second wave of technoogical disruption has not hit yet. When it does, even the changes we are seeing today will be negated.
That said, Hollywood, as in California, is done. What was once the epicenter of the entertainment world is going to be "ghost town". By this, I do not mean literally since Los Angeles is a major city. However, as a force in culture, it is done.
Evidence is mounting of the end coming. We now have Hollywood workers visiting food banks.
Source
The End of Hollywood
Google is now the number one streaming platform. For the tens of billions invested by the Hollywood studios, the return is abysmal. executives thought they could simply swoop in and take the profits that Netflix was generating. Instead, they managed to generate a sea of red.
As stated, there were other factors. Here is a short list:
The economic outlook of the Los Angeles area, with a population larger than most states, has been clouded in recent years by events that have upended the entertainment industry. market saturation led to a shakeout among direct-to-streaming providers. Then the Covid-19 pandemic shut down production. And strikes by writers and actors last year went on for months, giving studios time to explore filming elsewhere, in regions that offer hefty tax incentives.
The strikes by the unions were the fatal blow. It did not set off the events but it did place the proverbial nail in the coffin.
SInce that time, production in Los Angeles dropped greatly. Studiod moves sought out locations in more tax friendly areas. This is compounded by the fact that animation jobs are being destroyed as AI assists those still in the industry, increasingly in areas outisde California.
For Deborah Huss Humphries, the past few months have been particularly challenging.
A makeup artist who built a career working on movie and commercial sets around Los Angeles, Mrs. Huss Humphries remembers when she had to turn down gigs because of a packed schedule. But she has watched the industry evolve over three decades, with productions initially leaving the city, then the state, and even going overseas.
In short, the change was already in motion. However, the strikes were a major catalyst for change.
Patrick Adler, co-founder of Westwood economics and Planning Associates, a firm that has studied trends in Hollywood, said he saw the strikes as an inflection point.
He noted that strike settlements usually made productions more expensive. And the work stoppages, Dr. Adler said, prompted studio executives to re-evaluate their costs and test filming in other locations, such as New Mexico and Georgia.
This is converging around the time when technology unleashes the next wave of destruction.
Generateive AI Is Going To Take Over
The second wave is going to come from generative AI. This challenge for the entire industry is we are still in the very early stages of this technology. We will likely see it expand exponentially over the next few years. The pace of AI development is far ahead of Moore's Law.
Present changes are for movie studios to find alternative locations in different states (or countries). This is still focusing upon the idea of physical sets.
Generative AI is going to make this completely digital. The early signs can be seen in the digital arena that already exists; animation. Early products are able to generate AI video from prompts. At the moment, they are rather poor quality but, again, this is only a matter of time. Newer iterations of the software will see marked improvements.
Of course, this is not going to be relagated to animation. We are going to see major portions of films done using generative technology. At some point, entire productions will emerge that are nothing but AI generated. This will likely come from those outside the industry, providing another form of competition for the movie studios.
This means that YouTube and platforms like it will end up drawing more of the attention. This is already the dominant player in streaming, catering to individual content creators. We are going to see the skills of these people increase through the advancement of AI.
In summary, this means the fragmentation of the media is going to kick into overdrive. Millions of "production companies" will appear, providing a major kick to the numbers game that we see in other areas. As more networks go online, the dilution will be profound.
For those involved in the industry, especially in Hollywood, it is difficult. We need to ignore the major stars who are so self absorded due to the fact their wallet insulates them from reality. When looking at the decline, notice what happens to the average person.
These are the people who were crushed by the actions of the last few years.
Hollywood is losing business rapidly and it will never return.