Cinema Mucho Gusto's 2026 Cinema Industry Predictions

Each year, CMG forecasts the major events impacting the cinema industry over the next year. For 2026, the changes will be profound. 

•  The U.S. box office will exceed $10 billion in 2026, while global admissions, fueled by Hollywood releases, will exceed $35 billion. The cinema is back and will be stronger than ever.

Just a few of the 2026 releases

•  Micro-dramas will continue to grow exponentially in user popularity. With 40% of viewers being 18-45 males, the emphasis of these short-form soap operas (with minimal subscription fees) will be on action and sci-fi content. Check out ReelShort, DramaBox, and FlairFlow, to name several.

•  The face of Hollywood is changing. The industry will continue to consolidate with a slew of new CEOs, which will change how studios operate. David Ellison at Paramount (and possibly Warner Bros. if Netflix doesn't win the bid), Lachlan Murdoch at Fox, Mike Cavanagh at Comcast/Universal, and a new head at Disney (yet to be announced).

David Ellison - The young bloods take over Hollywood

•  2026 will debut the first AI-generated movie star to be featured in a first-run film. Whether it will be accepted by mainstream moviegoers (let alone mainstream Hollywood) is iffy. Exceptional AI-generated content will go viral and be viewed by millions.

Tilly Norwood, the first AI-generated movie star

• In early 2025, California passed a law expanding the film and TV tax credit program by $750 million. However, the changes in the tax program have come too late. There are simply too many film/TV production sites (both in the U.S. and overseas) that offer significantly lower labor and material costs than those in California. 

• YouTube will remain the King of all media. In 2026, not only will it retain its throne, but also become the largest pay-TV platform in the U.S. YouTube currently has 125 million subscribers to its Premium and Music channels. Primetime and Sunday Ticket platforms will be added in 2026. Without doubt, YouTube will be the biggest source of entertainment, creator programming, pay TV, and user/subscription dominance in the world.

Google has it all: YouTube, AI, Waymo, Search, Cloud

• Disney will purchase Taylor Swift's production and events company for a cool $4 billion. Disney+ will become the exclusive home to Swift's content, over which Taylor will continue to retain full creative control and veto power. Her music is not being sold, but Disney will have first dibs on all properties and will distribute the first animated movie musical featuring Swift songs.

By: Jim Lavorato

Major Studios Collab with Gaming Platforms

 Gaming platform Roblox has 151 million active users worldwide. That's more than the number of subscribers to Disney+, HBO Max, and roughly one-quarter of the number of Netflix users combined.

The movie studios are taking note of these high user numbers and are focusing on collaborations with online gaming companies, like Roblox and Fortnite (which has 40 million daily users). 

"It's a huge opportunity, says Rahul Gautam, media and entertainment consultant," as Roblox and Epic Games' Fortnite have set a foundation that is eye-opening for intellectual property holders as they see great potential for brand extension and use of previously successful movies or streamed original content."

Creating great content is one thing, but distribution is another, and gaming platforms fill a specific yet huge distribution need. The amount of revenue that gaming platforms generate (Roblox $4.5 billion, and Epic Games $5.7 billion) cannot be ignored, coupled with the young and massive fan base these platforms serve.

Last month, Roblox introduced facial age recognition checks for all users, a move that the major studios insist upon. Roblox has already signed cooperative deals with Lionsgate, Sony, Netflix, and toy-maker Mattel. Fortnite has inked collabs with Lego, Netflix, Warner Bros., and Disney.

By: James Lavorato

AI and The Human Factor in Filmmaking

 AI is a mega-trend, meaning it will have significant social, economic, and consumer impact over the next 10 - 20 years. It has already reshaped creative work, education, healthcare, and business decision-making.

But, while AI accelerates productivity and lowers business entry barriers, it does not remove the need for taste, responsibility, and judgment. 

Tool-based skills, like those of a camera operator, will be replaced by AI

What separates AI-generated images, films, and animations is human judgment and emotions. AI should be thought of as a human-machine collaborator. The artistic endeavor remains a form of emotional communication between people. Without this emotional connection, technological advances are meaningless. While AI blurs the boundary between producer and consumer, human judgment is essential and influenced by ethics, sensitivity, curiosity, and experience that cannot be replicated by data. 

Avatars may replace actors 

For the movie industry, there will inevitably be collaborations between filmmakers and AI models. Currently, there are no technical limits, and looking forward, AI will expand the physical limits of creation but not of judgment and responsibility as its use remains in human hands.

By: James Lavorato

Is the Cinema Back?

 Arguably, COVID-19 impacted the cinema industry more than any other. From March 2020 to April 2021, virtually all cinemas were shuttered - and it has taken four years to recover. The fact that there were massive Hollywood film strikes, which started in September 2023 with the Writers Guild and ended in July 2025 with a deal inked between the studios and the Screen Actors Guild, exacerbated the situation as content dried up.

As cinemas opened after COVID, there were still restrictions

Even after the lockdowns were lifted, many were unwilling to go to the cinema

Now, finally, it appears that the cinema is coming back. The 2025 U.S. box office is forecast to exceed $9 billion, and it's going out with a bang. Five Nights at Freddy's. Avatar, The Housemaid, Sponge Bob, David, Marty Supreme, Anaconda, and Song, Sung Blue head up a stellar holiday marquee. It will be a December to remember.

Now, it's all about content and a steady stream of it

Is the cinema back? It appears that moviegoers are. Now Hollywood needs to continue to supply a steady stream of entertaining content that is best viewed on the 'big' screen.       

By: Jim Lavorato

Superman Endures After 86 Years

There have been 10 Superman movies, the first of which premiered in 1978, starring Steve Reeves. Another, the 11th, is scheduled for release in 2027, entitled 'Man of Tomorrow'. The franchise has generated over $3.8 billion in worldwide revenue.

Superman first appeared in a comic book published in 1939 by Action Comics, and a copy of that comic, 'Superman No 1', just sold for $9.12 million. This comic, discovered in an attic, broke the record for the highest single-comic book sale. 

As you can see from the above photo, the comic was graded a 9.0 out of 10 for an excellent rating by the Certified Guaranty Company, the leading third-party comic grading company.

Although 86 years old, Superman endures.

By: Jim Lavorato

Movie Exhibitors Adamantly Opposed to Netflix/Warners Buyout

 Viewed as their worst enemy, movie exhibitors are strongly opposed to Netflix's purchase of Warner Bros.

Many theatre operators are petitioning the Trump Administration to deny Netflix's bid to usurp Warner Bros., as they depend on the 12-14 films Warner Bros. releases annually, and they see this evaporating.

 Movie operators have valid issues regarding their opposition as the chart below illustrates.

"Hopefully the deal gets killed so Warners can be sold to a better entity," says Chris Randleman, CEO at Flix Brewhouse, a Texas upscale theatre chain. In their defense, Netflix execs stress they plan on releasing films theatrically, and there will be no change to the release window between exhibition and streaming. 

Before COVID, most films had an exclusive theatrical window of 90 days. Now, some films are available to buy or rent within a few weeks of distribution. Exhibitors fear Netflix will shorten the theatrical release window even further.

"Shorter windows would result in lower revenues for cinemas," states Eduardo Acuna, CEO of Regal Entertainment. "These lower revenues will result in cinema closings, which limit the consumer's ability to view movies the way filmmakers intended - on a big screen with great surround sound." 

By: Jim Lavorato

Entertainment Industry Gets Cheesy

 

Parmigiano Reggiano, the king of cheeses, seeks product placement

In a deal between the Italian Parmigiano Reggiano Consortium and the United Talent Agency, a firm specializing in cultural marketing, UTA will endeavor to get the king of cheeses prominently displayed in movies, TV shows, and streaming media globally. 

According to a UTA spokesperson, "We will leverage our expertise and global connections across entertainment and culture to introduce Parmigiano to a wide pool of partners, to further its message that the king of cheeses offers gastronomical excellence and high-quality ingredients, production, and distribution."

Parmigiano, as it is familiarly called, has been produced in Italy for over a thousand years. It has a Protected Designation of Origin rating, meaning it can only be produced in one of five Italian provinces, and only under strict rules regarding ingredients and manufacture. 

Product placement can be important for the right product, and Parmigiano is positioned to find placement in a wide range of potential projects.

"This cheese is not just a symbol of excellence but a global brand", says Carmine Forbuso, head of marketing for the Consortium. "This partnership with UTA will allow us to connect with new audiences in an authentic and relevant way."

By: Jim Lavorato

Saudis Invest $900 million in Hollywood AI Developer

 The Crown Prince and Prime Minister of Saudi Arabia announced that the Saudi government will invest $900 million in Luma AI, a San Francisco-based firm that builds AI models for the entertainment industry.

Prince Mohammed bin Salman & Trump at a recent visit to the White House

Humain, a Saudi investment vehicle, will be the lead contributor to the Luma AI investment. As part of the deal, Luma will open an office in Riyadh and have full access to Saudi-based data centers, which generate 2 gigawatts of computing power, equivalent to the Hoover Dam's maximum output. 

Amit Jain, Luma AI's CEO, stated that "Luma will build AI world models that have many use cases for Hollywood, including the creation of new work, and make our systems available to Hollywood studios." Luma recently opened a training center in Los Angeles that offers AI education to film directors and executives. Saudi Prince Salman indicated that Saudi Arabia wants to become an AI powerhouse, using its access to cheap energy, and become an exporter of computing power. 

On his recent visit to the White House, the Prince met not only with the President but also major tech company executives from Nvidia, Oracle, Amazon, Microsoft, and Elon Musk's Grok AI.

According to Amit Jain, "Luma AI is an exceptional U.S.-based global startup pushing the boundaries of AI systems, which will provide foundational breakthroughs into real products."

By: Jim Lavorato

Netflix to Acquire Warner Bros. Discovery, Maybe

 It is now apparent that Netflix, assuming it obtains regulatory approval, will purchase Warner Bros. for $82.7 billion. 

President Trump and Ted Sarandos of Netflix

This would indicate that the world's largest entertainment streamer (YouTube is the largest media streamer) would now own one of Hollywood's oldest studios.

Ted Sarandos, Netflix Co-CEO, recently met with President Trump for a two-hour lunch, presumably regarding the Warner's purchase. "We're highly confident in the regulatory process", says Sarandos. "This deal is pro-consumer, pro-innovation, pro-worker, pro-creator, and pro-growth. Our plans are to work closely with all the appropriate governments and regulators, but we are really confident that we're going to get all the necessary approvals." 

On the flip side, Hollywood's most powerful media producers are strongly against the Netflix purchase. Unions and guilds representing directors, writers, producers, casting directors, and actors expressed deep concern. A spokesperson for the Writers Guild stated, "This merger must be blocked. It's the world's largest entertainment streamer purchasing a major competitor - isn't this what antitrust laws were designed to prevent?" 

I think the odds favor a purchase, but Netflix may not be the acquirer. The Trump Administration may not want to appear to be anti-Hollywood, or worse, anti-worker, so Netflix's road to success will be rocky 

To make matters more interesting, Paramount launched a hostile bid of $108.4 billion for Warner. Owned by Skydance, which recently acquired Paramount, they have put forth a much higher bid vs. Netflix. Their bid includes funding from Saudi Arabia and Qatar, with loans secured by Bank of America and Citibank. 

Hollywood would much prefer the Paramount purchase, but there is strong support for the Netflix deal by Congressional Democrats, who issued a statement saying, "the Paramount transaction has national security issues because of the reliance on funding from foreign-based financiers." That's a dumb argument. 

I believe the Paramount deal is more favorable to Hollywood, as there would be little conflict with theatrical movie releases and early content streaming.  

According to Polymarket (the world's largest prediction market), Netflix only has a 17% chance of closing the Warner's acquisition. I agree. 

By: Jim Lavorato

This Year's Hot Hollywood Gifts

 What are the glitterati finding under the Christmas tree in 2025? Here's the rundown.

- Channel's "IT" cat-eye sunglasses - $800

- Tiffany 'HardWare' diamond earrings. As worn by Sarah Paulson in "All's Fair" - $19,900

- 'Alice in Wonderland' clutch - $1,841

- Kayne's Sun Valley candle (also Vail and Aspen versions) - $65

- Channel's Palm Beach Pink tortoise top-handle bag - $5,300

- Custom Pet Portraits with turquoise, pink opals, and diamonds. As purchased by

Jennifer Aniston and Taylor Swift - starting at $10,000

- Louboutin's crystal pump, for 'Wicked' lovers - $1,495/pair

- Gucci, made-to-order walnut ping-pong table - $85,000

- Channel's 'Sydney Sweeny' hand-crafted leather boxing gloves - $129

- Fender x Loog's miniature electric Telecaster guitar - $229

- New York City brownstone, fully furnished dollhouse - $1,630

Merry Christmas!