Why Is There So Much Consolidation in Hollywood Right Now?

It feels like every headline I wake up to in 2025 is some sort of notification that one company is being swallowed up by another one, and what we're supposed to do about it.

The fact is that the creative industry of Hollywood is slowly following itself as new studios emerge and older studios combine.

The ink is barely dry on the massive Paramount-Skydance merger, which just closed in August, creating a new (and hopefully more stable) entity run by David Ellison. Meanwhile, Warner Bros. Discovery—itself the product of a recent merger—is now for sale, and hearing bids from all over.

As a writer in Hollywood, I am shedding tears seeing buyers disappear; things are already very hard!

But to feel better about the situation, I decided to research and learn why everyone is buying, selling, or merging right now.

And it boils down to three main drivers: the end of the streaming wars, a mountain of debt, and a frantic arms race for "universes."

Let's dive in.

The Streaming Wars

We've been talking about streaming for as long as I've worked at NFS, and we'll continue long after my time is done. It's become the major driver in Hollywood and a way for these studios to make a lot of money.

For the last decade, the game was simple: Subscriber growth at all costs.

Netflix burned billions on content to get to 250 million subs. Disney+, HBO Max, and Peacock all did the same, losing staggering amounts of money to catch up.

It's kind of crazy, but Netflix was so far ahead when it came to building a streaming company that all these other studios wound up spending billions to try to compete with them. The thing is, they were unable to keep up, and in committing to the fruitless chase, they laden themselves with a ton of debt that has crippled them financially.

Well, after all this, we began to realize that these companies were no longer profitable, and that affected their stock prices and changed the streaming wars.

Netflix is a profit machine. Disney's streaming division is finally in the black.

But all the other studios that are still losing money on streaming (or not growing fast enough) are in deep trouble. They can be overleveraged and then have to find a way to deal with these losses... which involves selling assets.

Why This Leads to Mergers

Streaming is a business of scale. You need a massive global library to justify a subscription and an ad tier. If you can't afford to build that library, your only option is to buy one. This is why Amazon bought MGM (for James Bond) and Disney bought Fox (for X-Men and Avatar). The Paramount-Skydance deal is the latest example: combining Paramount's library (Star Trek, SpongeBob, CBS) with Skydance's proven blockbuster production (Top Gun, Mission: Impossible) to create a single, more competitive service. And it's what makes WB (Potter, Game of Thrones, etc) such a hot thing for sale.

The Mountain of Crushing Debt

It's funny to think that movie studios have crushing debt just as I do with my student loans. And I would totally sell my last name off in order to escape from it.

So, let's use Warner Bros. Discovery (WBD) as an example here.

The 2022 merger that combined WarnerMedia and Discovery was sold to investors as a "synergy." But it was really just a way to saddle the new company with a crippling $40+ billion debt. And even though their movies did well at the box office and they continue to raise prices on streaming, they have not made too much of a dent.

Ever since, WBD's entire corporate strategy has been about servicing that debt.

• Shelving a $90 million Batgirl movie for a tax write-off.
• Purging dozens of shows and movies from Max to save on residuals.
• Endless layoffs.

This is the dark side of "synergy" and consolidation. When those two companies came together, they fired people they thought were redundant and got rid of movies and TV shows they didn't want to pay for moving forward.

They did all this with the idea that WBD would actually be a very lucrative target to put itself for sale.

It's a shark that wounded itself and is now attracting other sharks.

Paramount was in a similar boat, struggling with its own debt. The Skydance merger was seen as a lifeline, injecting fresh capital and a new strategy. But Skydance had a billionaire behind the investment that had so much money, no one was worried about the debt.

And he has the favor of Trump, so they assume the White House will approve future mergers as well.

What I learned was that mergers are often less about a creative vision and more about two companies lashing themselves together to avoid drowning in their own balance sheets.

And if you have a ton of money, you can absorb as much of the market share as you want.

- YouTube www.youtube.com

The Arms Race

In 2025, you don't sell a movie. You sell a universe. Okay, that might be overselling it, but this is an arms race, and if you have a giant world like a Marvel or a DC, you have a ton of characters you can put into movies and TV shows to make money.

And studios are always looking to expand these stories as well.

The consolidation boom is an arms race for Intellectual Property (IP). A studio head doesn't want to buy your brilliant original screenplay; they want to buy a 10-year plan for a franchise that can spawn movies, TV shows, video games, and theme park rides.

• Disney has Marvel, Star Wars, Pixar, and Avatar.
• Universal has Jurassic World, The Fast Saga, and its Illumination/Blumhouse horror engines.
• WBD has Potter, DC, and Game of Thrones.
• Sony has Spider-Man and its related characters.
• Amazon has James Bond, LOTR, and others...

When you have fewer, bigger companies, their bets have to be bigger. They can't afford to take a $20 million chance on an original drama.

They need to spend $250 million on a guaranteed, IP-driven blockbuster that can be spun off in a million different ways to make revenue wherever they can.

This focus on universes makes original, standalone ideas—the lifeblood of independent film—an endangered species at the studio level.

What This Means For Filmmakers

This is a very hard time to be working in Hollywood. It dfeelsl ike jobs are disappearing and there are fewer places to sell ideas.

Consolidation is affecting everyone, from the execs you need to the crewmembers who will work on the film in production. Everyone is suffering.

Let's peek at the ramifications.

1. Fewer Doors to Knock On: This is the most obvious one. When Fox merged with Disney, a major buyer vanished. When Paramount and Skydance combined their operations, two development slates became one. There are simply fewer places to sell your script or your film.
2. The "Work-for-Hire" Trap: The independent studios that do survive are often forced to partner with a mega-streamer. But they rarely get to own their projects. They essentially become "work-for-hire" entities, producing content for Netflix or Max instead of selling content to them. You get a fee, but you lose ownership and any potential backend. And they want a lot done on spec!
3. The Death of the "Middle": The $5 million to $60 million movie—the adult drama, the smart comedy, the non-franchise thriller—is virtually extinct at the major studio level. The new, consolidated giants are in the $200 million blockbuster business or the $2 million horror business. The middle ground has been completely abandoned.
4. Rise of the Risk-Averse Exec: When a company is $40 billion in debt, no executive is going to risk their job on your weird, personal, unconventional script. The mandate from the top is "safe." This leads to a creative monoculture of reboots, prequels, and "based on a true story" content.

What's The Good News?

When the majors abandon the middle, they create a massive vacuum. This is the gap where companies like A24 and Neon built their empires—by championing the exact personal, director-driven films the big studios ignore.

The Hollywood consolidation means the "studio" path is narrower than ever.

But the audience for unique, original stories hasn't gone anywhere. Your strategy can no longer be to just "sell it." Your strategy has to be to make it and find your audience—because the giants sure aren't going to find it for you.

And if you get in good at a studio, the money is there for you to continue to succeed, because they're going to need more stories and more success to sustain themselves.

Summing It All Up

The traditional studio system is shrinking. The giants are too busy fighting each other to care about your indie passion project.

It's a hard time to see Hollywood eating itself, but it's a good time to know what you're up against and plan your attack in the new reality we all face.

Let me know what you think in the comments.