The countdown is on.

We likely have less than 3 years of Hollywood being known for entertainment. Over the past couple years, we saw pressure on the industry, crushing jobs and reducing output. This is something that will only accelerate as AI advances.

When the Hollywood strikes took place, it was the beginning of the end. What most did not realize is the industry was between two waves.

The first was the Internet. This broke up the monopoly on content distribution, something studios had enjoyed for decades. Films and television networks were owned by many of the same entities, providing the pipeline to the public. In the 1980s, there were a handful of stations and a number of major movie studios.

It all changed with the Internet.

Now we are approaching the second wave.

AI Is Going To End Hollywood

The Internet broke the newspapers. It crushed the record companies. The distribution of photographs changed completely.

Over the last decade, the video realm starting to change. Today, YouTube is the number one streaming platform. Netflix, a company that was battling Blockbuster Video 15 years ago just agreed to an $80B deal for Warner Bros.

What is going on here?

The mechanism for delivering content caused major upheaval. Hollywood was spared some because video is a much heavier media format than text or images. That said, the drop in cost of storage along with improved bandwidth means video followed what happened before.

In the early 2000s, newspapers all over the world collapsed. Suddenly, due to the Internet, everyone could be a "journalist". Today, much of the "news" is consumed from social media platforms. Legacy media is dying.

The delivery products also changed. Mobile is now the dominant force. Between smartphones and tablets, more than half the Internet traffic is consumed via these devices.

None of this bodes well for Hollywood. In fact, I maintain the industry is still coming to grips with this change, just as the second wave is about to hit.

AI: Movie and Television Generation

The impact of AI is already being felt on Hollywood.

Here is what Rafiki generated regarding the present penetration of AI into the film industry:

AI is likely to accelerate the decline in Hollywood film output and job losses. Generative tools like Sora and Runway are automating scriptwriting, storyboarding, VFX, and even actor dubbing with deepfakes, cutting production costs by up to 90% and timelines from months to days. This reduces the need for large crews, leading to widespread layoffs in writing, animation, and editing roles.

It is not changing everything overnight. What we are seeing is the different layers of the movie making process being affected.

The net result is jobs being lost, especially in Southern California. We were already seeing a hit due to the fact that movie making was moving to other geographic regions. Now, many of those jobs which were done by humans are starting to be replaced.

What makes this discussion concerning, at least for those who support Hollywood, is the fact that the AI technology is still in its infancy. We are talking about applications that are less than two years old. Many that are being utilized were only started a year or so ago.

This means that, based upon the rate of progression, we will see more capable systems three years from now. I would not be surprised if an end-to-end movie can be prompted by that time. It might require the use of 3 or 4 different applications but a feature-length film will likely be possible.

How does this impact the movie industry? My guess is there will be room for the "greats". Some things will still be highly successful. However, like most content, the majority will fall under the "good enough" category.

AI will likely be there in another 36 months. This is a bad sign for Hollywood.