Heading into this year's Oscars ceremony, Hollywood is dealing with a set of structural problems that don't look like a typical cyclical downturn. The Directors Guild of America reported at a February press conference that guild-member employment is down 35 to 40 percent, with sound technicians and dolly grips averaging six months of downtime between productions. North American theater attendance has roughly halved over the past decade, California had to double its annual production incentive to $750 million just to slow the outflow of productions, and the 2023 actor and writer strikes accelerated a broader reallocation of studio budgets toward sports and live events. The financial damage has rippled outward: Goldman Sachs seized the Radford Studio Center after a mortgage default, and camera supplier Arri Group cut jobs and closed two German facilities.
The studios' answer, so far, is AI. Lionsgate has formally partnered with generative video startup Runway AI to lower production costs, and Disney has licensed its IP to OpenAI's Sora video-generation tool. Netflix is reportedly paying up to $600 million to acquire InterPositive, an AI filmmaking startup co-founded by Ben Affleck, according to Bloomberg — a deal, if confirmed, that would show at least one major streamer treating AI-native production as a central business capability rather than a side experiment. The same technology cutting studio overhead threatens the craft workers already facing the steepest employment slump in a generation.
Corporate consolidation is remaking the industry at the same time. Warner Bros. Discovery — which has two best picture nominees this year in Sinners and One Battle After Another — has drawn acquisition interest, with reported bids in the range of $110 billion; the specific bidders and deal terms remain unconfirmed, and should be treated with caution. Any sale would mark the third ownership change for Warner Bros. in under a decade. Netflix, which dropped out of earlier Warner Bros. discussions in February, plans to increase its programming budget by roughly 10 percent to $20 billion. DGA leadership has drawn comparisons to Detroit's auto industry contraction — technological displacement compounding financial restructuring. Whether or not that analogy holds, the employment numbers point to an industry that will be considerably smaller on the other side of this period than it was going in.