For years, Hollywood has been seen as the heart of global entertainment. The land of dreams, where the biggest stars, the most lavish productions, and the most iconic films are made. But as we look at the state of the industry today, it’s clear: Hollywood is burning—and it’s their fault.
The signs have been there for a while. Massive financial losses from companies like Disney, record-breaking declines in TV viewership, and rising discontent within the industry. At the same time, global competitors have risen to prominence, producing quality content at a fraction of the cost. The truth is, Hollywood’s problems aren’t a result of shifting tastes or market conditions—they are entirely self-inflicted.
One of the biggest issues Hollywood faces today is its failure to adapt to the changing business model of entertainment. A few years ago, Disney was hailed as a winner in the streaming wars. In 2021, articles suggested that Disney’s stock was undervalued and poised for future growth. Fast forward to today, and Disney’s streaming division alone has suffered losses of over $11 billion. This isn’t just a problem for Disney; it’s a microcosm of a larger crisis in Hollywood, where traditional business models are colliding with the realities of the modern entertainment world.
The root of this problem lies in Hollywood’s ideological shift. For years, the industry has been operating on a narrative of “progress” and “the right side of history.” It’s as if Hollywood believes it is immune to the basic principles of business. In its attempt to promote certain cultural values, Hollywood ignored the fundamental economics of filmmaking—balancing costs, taking risks, and ensuring profitability. Instead, Hollywood became bloated, overfunded, and too focused on pushing a particular agenda, all while expecting audiences to keep supporting its content.
The entertainment industry has increasingly become a playground for ideological battles, where the value of content is often measured by how well it fits into a specific narrative, rather than how entertaining or well-made it is. This has led to a disconnect between Hollywood and its audience. The movies and TV shows that are supposed to resonate with mass audiences are now filled with filler, preachiness, and pandering, leaving many viewers disengaged. Hollywood doesn’t seem to understand that its core audience wants something different—something fresh, authentic, and grounded in good storytelling, not ideological talking points.
Take the ongoing issue with unions and residuals, for example. While fair compensation for labor is important, Hollywood’s approach has become untenable. Actors and writers demand more pay and more control over profits, but they don’t take on any of the risks of the business. The idea of receiving a cut of profits without accepting the financial risk of a project is an unsustainable model. Unions have become powerful enough to artificially inflate labor costs, creating a “false economy.” This has resulted in ballooning production budgets, inflated wages, and unsustainable profit expectations.
The real problem here is that Hollywood is no longer run like a business. It operates like a luxury industry, where inefficiency is tolerated, and profit motives are secondary to ideological goals. This is why Hollywood has struggled to compete with newer, leaner models like those in South Korea or independent digital platforms. These places have figured out how to make high-quality content at a fraction of the price and without the cultural baggage Hollywood carries. South Korean dramas, for instance, have exploded in global popularity, creating blockbuster hits like Squid Game for a fraction of the cost of an average Hollywood series. Meanwhile, Hollywood continues to spend exorbitant amounts on productions that fail to resonate with audiences.
The difference between Hollywood and successful global competitors lies in business practices. While Hollywood insists on massive upfront payments, actors and creators in other countries, like South Korea, are paid more for subsequent seasons of successful shows. There’s no need for residuals if the model works. Hollywood, on the other hand, has become a slave to a business model that doesn’t reward success unless it adheres to a particular set of rules, including the ideological purity tests Hollywood has created for itself.
This inability to adapt is what’s killing Hollywood. The streaming model, which Hollywood originally embraced with open arms, has only exposed the flaws in the system. Instead of focusing on creating compelling, profitable content, Hollywood’s attention has been diverted to enforcing ideological quotas and appeasing a vocal minority. For example, California’s film tax credits are now tied to strict diversity mandates that require productions to meet certain demographic requirements or risk losing financial incentives. This means that every project—whether it’s about Vikings, ancient Rome, or a science fiction epic—must look and feel like California, rather than the story it’s trying to tell.
The result is that Hollywood’s creativity is suffocated. Everything must reflect a narrow set of ideals, and that stifles the very innovation that has historically made Hollywood great. The pursuit of “progress” and “diversity” has left little room for originality, and as a result, Hollywood’s content has become homogenized. Productions can no longer be about telling stories authentically; instead, they must be about meeting quotas and hitting ideological marks. This has alienated many viewers, leaving them craving content that speaks to them in a more genuine way.
Meanwhile, places like South Korea have embraced a more traditional business model. They still produce content that resonates with audiences, and they do it without the need for constant political posturing. In South Korea, if a show is successful, the creators get paid more for the next season, and there’s no need for unnecessary residuals or inflated paychecks. The business model is straightforward and works: if you produce quality, you’ll make more money. If your content flops, you take the financial hit and learn from it. Simple. But Hollywood’s addiction to high production costs, ideological purity, and inflated paychecks has made it difficult to stay competitive.
The industry’s increasing reliance on international production hubs is a clear sign that Hollywood has lost its grip on global entertainment. Filmmakers are increasingly choosing to shoot abroad, where tax incentives, lower production costs, and fewer ideological restrictions make it easier to create content. The entertainment capital of the world is no longer Hollywood. It’s becoming increasingly evident that, due to its own ideological and financial mismanagement, Hollywood is being overtaken by countries that offer better business practices and greater creative freedom.
At its core, the issue is that Hollywood has forgotten how to be a business. It has become bloated with excess, distracted by ideological battles, and disconnected from the audience it was once so in tune with. The industry used to thrive because it balanced creativity with profitability. Now, it’s more interested in enforcing political correctness than producing entertaining, original content. Hollywood’s once-untouchable dominance in global entertainment is slipping, and unless the industry recognizes the reality of its situation, it may never recover. Hollywood is burning, and it’s their fault.
