As stars graced the red carpet in early January to celebrate successes like “Oppenheimer” and “Succession,” Hollywood insiders were gripped by a prevailing concern: the industry is contracting. In a series of interviews with 17 entertainment executives, agents, and bankers, we uncovered a sobering narrative of economic challenges reshaping the television and film landscape.

Streaming Services and Their Reduced Content

“The great contraction is upon us,” remarked a seasoned television executive anonymously. This sentiment echoes across the industry, with the era of “peak TV” fading into memory as budgets tighten and scrutiny intensifies. Analysts predict gloomy prospects for the future, with declines in broadcast and cable television advertising, and traditional TV facing increasing competition from digital platforms. Streaming services, once hailed as the saviors of the industry, now struggle to achieve profitability amidst slashed production spending and skepticism over long-term strategies.

The number of scripted series is expected to plummet from the heights of 2022, with Hollywood strikes and constrained budgets contributing to reduced production. Even streaming giant Netflix has scaled back its output significantly, signaling a broader trend towards fewer scripted offerings.

Box Office Challenges Amid Changing Dynamics

In the movie business, the impact of declining audience interest is palpable. Despite once-reliable formats like superhero films, box office sales continue to dwindle. Last year’s lineup of big-budget releases, including “The Marvels” and “The Flash,” failed to meet expectations, underscoring shifting audience preferences and challenges in sustaining traditional blockbuster formats. The industry’s slowdown is evident in various facets of production. Development executives exercise caution in greenlighting projects, while production budgets shrink, even at cash-flush entities like Apple TV+. Show cancellations occur swiftly for those unable to capture audience attention, reflecting a new reality of shorter seasons and reduced episode counts.

What’s the Future of Hollywood?

Executives across major studios navigate uncertainties, with efforts to slash spending and reevaluate development strategies. At Fox and Disney, belt-tightening measures come into play, signaling a shift towards more cautious decision-making and heightened scrutiny.

Amidst these challenges, the industry confronts a “new world order” characterized by shorter seasons, reduced episode counts, and heightened risk aversion. As Hollywood grapples with existential threats and changing dynamics, the path forward remains uncertain, with implications reaching far beyond the glitz and glamour of the red carpet.