Why Is Hollywood in a State of Contraction Right Now?

Why is Hollywood in a state of contraction?
'Star Wars'Credit: 20th Century Fox
If it feels like things are tightening in Hollywood. Guess what? They are! 

Over the last few years, it has felt like Hollywood is getting smaller, and not in a good way.

I've heard people complaining about fewer jobs, fewer opportunities, and the impossibility of breaking in

We are feeling a contraction within the industry, and it's not just emotional. It's physically happening. 

Hollywood, the global capital of the entertainment industry, has long been the symbol of glitz, glamour, and success. However, in recent years, the industry has been facing significant economic challenges and changes in consumer behavior disrupting the traditional model.

But what are the underlying causes of Hollywood's contraction? What does the future hold for the entertainment industry?

In this post, we'll explore the reasons why Hollywood is in a state of contraction right now, and what the industry can do to adapt to the changing landscape.

Let's dive right into this depressing topic! 

Why is Hollywood in a state of contraction?
'Zack Snyder's Justice League'Credit: HBO Max/Warner Bros. Pictures

What Do I Mean When I Say "Contraction"? 

In business, contraction refers to a period of economic decline or reduction in the size or scale of a business or industry. Contraction can happen for many reasons, such as a decrease in demand for a particular product or service, increased competition, economic downturns, changes in consumer behavior, or a shift in market trends.

Why is Hollywood in a State of Contraction Right Now? 

In Hollywood, we're seeing this from many different ends of the spectrum, and the results are a decrease in revenue and profits, layoffs, closures, and bankruptcies. So what are some of the main reasons this is happening? 

1. The COVID-19 Pandemic

It honestly feels like COVID-19 has screwed us so many times. I'm honestly sick of writing about it (pun intended). 

The pandemic has caused major disruptions to the film and television industry, with many productions being delayed or canceled, theaters closing down, and studios suffering significant financial losses. The pandemic has led to a decrease in demand for new content and a slowdown in production, which has affected the entire industry.

These losses have cost people jobs, and opportunities and shifted the entire market toward IP in an unflinching way. We've seen theaters suffer as well, disrupting the distribution chain in place for a hundred years. 

Why is Hollywood in a state of contraction?
COVID-19 pandemicCredit: CDC

2. Shifts in Consumer Behavior

People are not going to the movies as much. They're watching at home, and we are in an endless battle to get them back. 

With the rise of streaming services and the changing viewing habits of audiences, Hollywood is facing stiff competition from other platforms such as Netflix, Amazon, and Hulu. These streaming services have disrupted the traditional distribution model of the entertainment industry, causing studios to rethink their strategies and adapt to a changing landscape.

Why is Hollywood in a state of contraction?
Credit: Shutterstock/Daniel Jakulovic

3. High Production Costs

Making movies and TV has become a very expensive game. We've seen blockbuster budgets balloon, and many times they do not feel justified. These high budgets mean movies have to earn billions to be profitable. There's so much pressure on studios to make these tentpoles, they're leaving smaller titles behind. 

These high costs have led to a decrease in the number of mid-budget films being produced as studios focus on investing in surefire box office hits.

Why is Hollywood in a state of contraction?
'Avatar: The Way of Water'Credit: 20th Century Studios

4. Creative Stagnation

As I mentioned in my superhero post, we're seeing studios pass over original ideas in favor of proven IP. That makes people a little exhausted at the same stuff coming out over and over again. In film and TV, this is happening with countless reboots and spinoffs. 

Hollywood has been accused of lacking originality in recent years, with many films and TV shows being sequels, reboots, or adaptations. This has led to a perception of creative stagnation, which can lead to a decrease in audience interest and revenue.

If we spent more on original ideas, mid or even low-budget ones, then there may be more opportunities for hits and to get people back to the theater, instead of big swings of the same stuff over and over. 

Why is Hollywood in a state of contraction?
Credit: ARP Films

Summing up Why Is Hollywood in a State of Contraction Right Now

In conclusion, Hollywood is facing a challenging period of contraction, with a combination of factors contributing to the economic and creative challenges the industry is currently experiencing.

From the COVID-19 pandemic to the rise of streaming services to high production costs to creative stagnation, Hollywood is being forced to rethink its traditional business model and find new ways to create and distribute content.

However, while the industry is currently facing significant obstacles, it has a long history of innovation and adaptation, and there is reason to believe that Hollywood will emerge from this period of contraction stronger and more resilient than ever before.

By embracing new technologies, exploring innovative distribution strategies, and investing in diverse, original content, Hollywood can remain a leading global hub of entertainment for many years to come.

Let me know your thoughts in the comments.      

Your Comment


while I agree stagnation is a factor I think you missed the most important reason which is Hollywood went uber political, we had female actors saying this film isn't for you stay away men and then directors and studios say we are racist or misogynist or some sort of istaphobe which for some reason, I don't know why hasn't made me really want to go to the cinema, when the actors are already telling me the film isn't for me. then on the flip side, you go to youtube to find a full indie film made from pleges from kickstart which is completely original entertaining and non-preachy so the talent is out there just not in Hollywood anymore.

February 24, 2023 at 5:26AM


Quoting from the article: "There is reason to believe that Hollywood will emerge from this period of contraction stronger and more resilient than ever before."


Hope you're right! However, the innovations you are counting on have yet to appear. Current tech, such as HFR and HDR, feels timid compared to what Hollywood tried in the 50s and 60s in its fierce battle against tiny B&W television sets. Back then they rolled out: 70mm, 3-Strip Cinerama, first generation 3D, Sensurround audio, even Smell-O-Vision. Most of these things didn't work out but some did, and even the failures exemplify an age of bold experimentation that we have yet to see again.

The contraction long pre-dates the pandemic. James Cameron was talking about getting people "back to theaters" when the first AVATAR came out in 2009! For more than a decade the problem wasn't COVID-19 it was 1080P. Gorgeous HD and 4K movies at home are tough to beat, especially on a cold winter night.

February 25, 2023 at 2:57PM


Agreed. Even looking past the technology, we were talking about the death of movie theaters in 2008 not just because home theaters were becoming more affordable but because studios were already leaning heavily on proven IP while ticket prices were going up. There were endless discussions about the lack of investment in original content in Hollywood and over the course of the 12 years leading up to the pandemic it didn't improve. Technology does play a factor but I think it ultimately boils down to the creative and, unfortunately, the studios haven't learned their lesson. Theaters can invest in new technology and perks all they want to try and lure you back. If the movies are boring or we keep being fed the same tired material we've been seeing for years now (Fast and Furious 10, anyone?), the situation won't improve.

February 28, 2023 at 1:52PM

Dale Raphael Goldberg
Director / Editor

Nope. Not true.
I'm. Busier than I've ever been.

February 25, 2023 at 11:30PM