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How Hollywood stopped making movies in Hollywood

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Re: How Hollywood stopped making movies in Hollywood

#51

Post by projektfu »

jezzamon wrote: post #46
dotBen wrote: post #27

An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry. I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occa…

A lot of people, especially left leaning and young people, are very against any AI use and especially for AI pictures or video. For them it's very cringe-worthy. So that would all need to change somehow. Remember that a lot of the people driving opinions on stuff are the artists that would be displaced by this technology. Also... Actors aren't hired based on acting skill. AI can't replace the notoriety part of why st…

I was at a Brazilian restaurant in the US that had TVs showing a well-known Brazilian singer/guitarist performing, and the middle-school-aged kids at the table next to me were discussing whether it was AI. It was clearly not, to me, but it seems to be getting hard for the next generation to tell it apart. I think they will be craving authentic experiences, but also willing to accept inauthentic ones when they do not have the money for the real thing.

Re: How Hollywood stopped making movies in Hollywood

#52

Post by wuliwong »

datakan wrote: post #17

Nothing new. When I was in college down in LA I lived in a very small town founded by stunt people. Probably 80% of the people there were in the stunt business. Every few months they were off to another state or country for filming. Hollywood is just for the studio execs now, everyone else flies to whatever country offers the best tax breaks for them to film. They go to some pretty incredible lengths too, A friend of…

According to this article about 1/3rd as many movies are made in LA since the 90s. They were only making 30% of films in LA in the 90s so your experience still matches with the data but having 2/3rds of the local film production move elsewhere is significant.

Re: How Hollywood stopped making movies in Hollywood

#53

Post by jasode »

WalterBright wrote: post #36
throwup238 wrote: post #19

Earlier quoted context omitted.

Hollywood accounting rules are regular accounting rules (GAAP). The only reason “Hollywood accounting” is a thing is because of a bunch of actors who didn’t know the difference between “gross” and “net” points got screwed over. Everyone involved still pays their taxes, but the special purpose vehicle used to organize the production is essentially a passthrough entity.

I presume that what happens is if a movie is too profitable, other business expenses are shifted to the ledger to reduce the profits. This works because a movie is not a separate accounting entity.

>This works because a movie is not a separate accounting entity.

Each movie is set up as a separate legal business entity (LLC). That's the SPV (special purpose vehicle). https://www.google.com/search?q=each+hollywood+movie+is+a+se...

There's also a separate LLC for the parent production company. The production company LLC can also send invoices to the individual movie LLC for services. People can get creative with production companies "overcharging" for various expenses back to the movie's LLC but whatever creative accounting they want to do still needs to ultimately satisfy IRS scrutiny if there's an audit. There are entertainment attorneys that specialize in movie LLCs.

Re: How Hollywood stopped making movies in Hollywood

#54

Post by khriss »

sublinear wrote: post #45
dotBen wrote: post #27

An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry. I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occa…

I still don't understand why there's such a race to the bottom. If they don't want to make a movie properly, why make it at all? The corner cutting across the board has become so bad that these movies are unwatchable. This isn't even a new problem. A lot of traditional CGI can still be bad enough to ruin the illusion when it's the state of the art and a lot of attention to detail went into it. We've been circling the…

It's the same forces driving software quality to the bottom. Simply put, enshittification has become the expected norm and there is more money to be made pushing out barely acceptable slop than the higher effort(and cost) of better made stuff.

Also, it's not exactly that the higher effort, better quality stuff is gone as it's been drowned out by the slop. Higher quality things are still being made(e.g. The Odyssey which uses minimal CGI), just much smaller as a percentage of overall.

Earlier unit economics of slop were roughly comparable to higher effort output. It was cheaper, but not dramatically so to push out crap code, so the volume of slop was a bit lower. Now, low effort slop is genuinely low effort due to AI, so the economics work out even accounting for the lower adoption and higher complaints from the users.

Time will tell if this is a temporary phase, or the new, bleak normal.

Re: How Hollywood stopped making movies in Hollywood

#55

Post by Papazsazsa »

My take on the problems including cost sickness:

1) Supply/demand. There's actually a shortage of quality movies relative to what the market will bear, one need only look at the occasional breakout hit like Obsession to see that it's possible to make a ton of money if you understand the demand signals.

2) Demand signals. Median age of someone with greenlight authority is ~62. In the 80s, there were 30-year-olds running entire studios. No disrespect to Boomers, but this business is about marketing cultural products and they have no idea about the culture. This also creates significant demographic headwinds in the job market.

3) Costs. Wages/COL are a part of it, as are unions, star power demand, and how companies like AAPL/AMZN can do streaming as a loss-leaders, which creates a lot of downward pressure. The biggest one is that in theatrical CAC > LTV. You can spend 2x your production budget on marketing and that investment evaporates the first week of showing – there's no real brand loyalty to studios/streamers, especially now that they've commoditized their IP and put it on rotation through the online platforms.

4) Originality. Franchises, sequels, and remakes were roughly three-quarters of 2025, and nine of top ten 2024 worldwide grossers were sequels. This is a result of local minima/risk arbitrage in the studio's portfolios, the bottom line is that people will still show up for a Spiderman movie even if its crappy b/c of the pre-aware IP and there's nothing better out there. There are wonderful exceptions to this of course, like Christopher Nolan and many indie films.

5) Politics. Hard to not deal with politics amidst the outrage cycle, but the easiest way to achieve that is to have a plurality of viewpoints – which you can get if you stop trying to bend beloved IP to contemporary politics and just make new shit!

Re: How Hollywood stopped making movies in Hollywood

#56

Post by devindotcom »

WalterBright wrote: post #37
harrall wrote: post #23

The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem. California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state. But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.

The flood of immigrants into California inevitably pushes up housing prices.

Lol. Imagining someone sneaking across the border from Mexico so they can work under the table to afford a $4k/mo 1BR in Hollywood

Re: How Hollywood stopped making movies in Hollywood

#58

Post by jarjoura »

AlexB138 wrote: post #13

The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.

Not that you're wrong, but I could have sworn that Marvel production was always based in the UK.

Post-production is very much still in California though.

Re: How Hollywood stopped making movies in Hollywood

#59

Post by frollogaston »

harrall wrote: post #23

The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem. California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state. But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.

Cities don't need ever-increasing populations to thrive.

Re: How Hollywood stopped making movies in Hollywood

#60

Post by echelon »

frollogaston wrote: post #59
harrall wrote: post #23

The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem. California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state. But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.

Cities don't need ever-increasing populations to thrive.

Both populations and supply can remain static as demand pushes up prices and swaps lower earners for high net worth people.

Classic supply/demand.

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