Is Hollywood Dead?

 It could be argued that Hollywood's current condition and dilemma is a metaphor for California. The film industry in LA is at an inflection point... either the industry will die or be resurrected by State tax credits and subsidies. 

"We've hit bottom", states FilmLA's CEO Paul Audley, "We'll see more shooting by the end of the year, but because of timelines, we must start seeing the ramp up in production by the 1st quarter of 2026."      According to FilmLA, the group that issues film permits for the city and county of Los Angeles, film production experienced a record low in the 3rd quarter.  

This prompted the State to pass a tax credit program totaling $1.6 billion for film and TV show production. Thus far, 10 films are signed up to take advantage of the program, totaling $36.9 million.

The tax credit program will bump up production, but high labor costs coupled with lucrative benefits offered by other U.S. States and foreign countries will, I believe, stymie its long-term prospects. Outmigration of production workers is another issue California has to grapple with.   

Hollywood's only bright spot and long-term revenue generator is TV show production and commercial ads. These are two areas where Hollywood does and will continue to excel - it is currently number two after England in TV show production. 

Like Hollywood, many of California's problems are self-induced. I fear film production may have already reached the point of no return. There will be plenty of films produced, but they won't be shot in LA.  

Gaming and The Movies

 Gaming and the movies are very closely related. Games made into movies - movies made into games. You can say it is a symbiotic relationship, so it's a good idea to take a peek into where gaming fits on the entertainment scale.  

52% of active gamers are women

The Entertainment Software Association (ESA) just issued an exhaustive study (over 25,000 people were surveyed) on just that ... and their findings will surprise you.

Women make up over half of all U.S. gamers (52%), and 22% are over the age of 65. The stereotype of gamers dominated by young men who sit for hours engrossed in mindless escapism is a complete fallacy.

ESA's 2025 Survey gathered data from over 25,000 gamers. Participants were aged 16-65+, and identified themselves as 'active' gamers. The average gamer is 41 years old. The age group with the greatest number of active gamers was the 65+ group. Additionally, the majority of U.S. gamers are women - 52%.

These statistics are due to the variety and innovation of the gaming industry. Video games include not only action first-person games, but include puzzle games, role-playing games, skill and chance games, and more. It's something for everyone. The most popular gaming device is the smartphone followed by tablets.

And, just like the movies or music, there is a game for everyone. 

 

Instagram Misuse of Movie Rating

 The Motion Picture Association (MPA), the major film makers' trade association, was not informed by Instagram (owned by Meta) that they were using the MPA's PG-13 rating symbol.

"The MPA was not contacted before the use of our rating symbol by Instagram as a tool for their Teen Accounts", stated Charles Rivkin, MPA's CEO.

The MPA introduced its film-rating system in November 1968. It utilizes a Rating Board that watches every movie in its entirety and assigns it a rating.

Over 90% of parents say the ratings help them make better viewing choices for their families - and that's why Instagram wanted to use it. A legal settlement will likely be worked out regarding the use of the movie rating.

MPA members are Netflix, Paramount Pictures, Prime Video, Amazon/MGM, Sony Pictures, Universal Studios, Walt Disney Studios, and Warner Bros. Discovery.

Too Loud to Endure...CA Finally Gets Something Right

 

Governor Gavin Newsom of California has made noise pollution a priority of his administration. New legislation mandates that the noise level of advertisements must be at the same level as the movie or TV show being streamed by the likes of Netflix, Disney+, Amazon, etc.

The bill, SB576, passed unanimously by both the CA Senate and Assembly, was signed into law by Newsom. Starting in July 2026, major streaming services won't be able to "transmit the audio of commercial advertisement louder than the video content the advertisements accompany."

Many streaming platforms use tiered pricing that requires consumers to pay a premium for "no ads" viewing, but most subscribers opt for the lower cost "ads included" tier; however, the loudness of these ads is pronounced and very irritating.

It should be noted that the Motion Picture Association, a lobby group for the major film studios, opposed the new law, noting "that many streaming services have undertaken reasonable efforts to adjust the loudness of advertisements."  Really! Consumers are very much in favor of this legislation, and I don't blame them, being a victim myself.

This is one law that other States should follow, and I don't say that often about many of CA's laws.

Hollywood, Big Tech, and AI

Generative AI is poised to have a profound impact on everyone and everything, including how Hollywood conducts its business. No one can stop technology from evolving, and the reshaping of media and entertainment is imminent - it's all connected.

The advancement of technology cannot be stopped.

AI companies have grown like mushrooms. OpenAI is worth $500 billion, Anthropic is worth $183 billion, and privately held Grok (owned by Elon Musk's X) is valued in the hundreds of billions. Generative AI is set to have a significant impact on everyone and everything, including the way Hollywood conducts its business. Technology is constantly evolving, and the transformation of the media and entertainment industries is inevitable.

Given this situation, Hollywood, being a major source of content for AI platforms requiring vast amounts of material, presents a compelling case for big tech companies - such as Apple, Microsoft, Amazon, and Netflix - to acquire Hollywood studios with their large libraries of movies and TV shows.  The reshaping of media and entertainment is imminent—everything is interconnected.

The race is on: big tech vs. AI w/ players like  Altman, Musk, Zucherburg

Needless to say, this whole scenario has spawned massive copyright litigation from authors and other content creators, and the Hollywood studios are throwing their legal firepower against AI firms for the use of their copyrighted text and imagery.

There is no doubt that AI will drive the next generation of productivity and innovation worldwide. It will fuel the next wave of global megacompanies. This, in turn, will turbocharge the U.S. economy.

Note: Key AI Terms:

Agent: An AI entity that uses software and apps to execute commands.

Chatbots: Communicative software that connects with users in conversation style.

Fair Use: The use of copyrighted material for educational or journalistic purposes.

Generative AI: Technology that allows users to create content, including text, images, and videos. It can autonomously construct material based on input to its system.

Large Language Model: AI databases that are capable of engaging in dialogue with users, writing prose, and analyzing enormous amounts of text information from the internet.

By: Jim Lavorato

Taylor Swift...You Can't Argue with Success

 Like her or not, you can't deny the success of Taylor Swift.

Her latest endeavor, a film, opened in cinemas for a three-day run this weekend. The film, "The Official Release Party of a Showgirl", is composed of behind-the-scenes footage of her tour, which includes personal commentary. The 90-minute film is wrapped around Swift's latest album (Life of a Showgirl) and is presented without trailers or promotions.

Can Swift go from teenyboppers to mainstream acceptance?

 

The film is a very professionally crafted music video and demonstrates that Swift is not only a great musical artist but a marketing and self-promoting genius. The film grossed over $46 million in its three-day release. And she again opted to bypass the Hollywood studios and partnered directly with AMC Theatres to distribute the movie. 

Swift, who was a Biden supporter, appears to have pivoted from her left-leaning ideology to a much more centrist view - voicing her support of heterosexual marriage, having children, and owning your own home. Swifties idolize her, and many will follow suit on how to live their lives.  

A-Listers Make Big Bank with Side Hustles

Hawking wine, watches, or woks, celebrities are cashing in on any number of side hustles.  Star-owned brands are the current trend in retail, selling through both online and brick-and-mortar outlets. 

Top celebrity entrepreneur standouts include

- Jennifer Aniston, who markets a very successful line of hair care products, called LolaVie.

At 56, Aniston is the best spokesperson for her brand.

- Drew Barrymore has an exclusive deal with Walmart to sell her signature kitchenware, pet collection, bedding, and home decor lines.

Rihanna's line of beauty products sold over $500 million in 2024

- Selena Gomez's Rare Beauty cosmetic line reached $400 million in 2024. For this year, sales for the first eight months were over $481 million. This represents the highest-ranking celebrity beauty brand, second only to Rihanna's Fenty Beauty line, which reached $515 million last year.  

                             

Johnson hawking his Teremana tequila

- Dwayne Johnson concentrates on three lines of products: Teremana tequila, Zoa energy drinks, and Papatui men's cosmetic products. Teremana sold 1 million cases in its first 12 months on the market, a record for a premium spirit.

Lady Gaga does a photo shoot touting the Haus Labs line

- Lady Gaga's Haus Labs beauty brand is sold exclusively at Sephora outlets worldwide.

- Brad Pitt's Miravel rose reached sales of $60 million in 2024. Pitt is also the co-founder of Beau Domaine skincare products and God's True Cashmere clothing line, among other ventures.

In actuality, big celebrities are making big bucks on branded products. In some cases, these side gigs generate more money than they make acting or performing. 

Tariffs on Foreign Films...A Real Bad Idea!

President Trump announced a 100% tariff on all foreign films in an effort to promote domestic film production, principally in Hollywood. 

This is the worst idea ever. Forget its legality, it's just plain dumb. Imposing tariffs on artistic endeavors would be a first. Films are not products, but collaborations presented in digital form.

Film production has indeed shifted outside the U.S., but this is due entirely to the high cost of domestic production, particularly in California.

Someone should ask Trump, "How do you enforce a movie tariff given that films use production, financing, post-production, and visual effects across multiple countries?"

California already has a slew of tax incentives for film production, as do other States, but it's still infinitely cheaper to produce overseas. Imposing tariffs on foreign films is not going to save 'dying Hollywood' - California's problems are much deeper and are impacting many industries negatively.  

And what about streamers? How would tariffs apply to streaming platforms?

In 2024, the international marketplace accounted for over 70% of total box office admissions. Therefore, reciprocal tariffs by other countries would result in the loss of billions of dollars and thousands of jobs within the U.S. 

Making a movie is a very complex endeavor. It's very common for films to include production in the U.S. and other countries. "When you make these sorts of blanket rules, in this case tariffs, you're missing some of the nuance of how films are made", says Steven Schiffran, Professor at Georgetown University, "sometimes a director needs to film in an overseas location(s) when producing a film. For example, the Harry Potter films were shot entirely in the U.K. To produce them in the U.S. would have doubled their cost." 

If a 100% tariff were imposed on foreign films, admission costs at U.S. cinemas would have to rise, placing further stress on struggling movie attendance. 

Tariffs on foreign films are a bad idea, and I predict it will never happen.

Jim Lavorato

 

Trump's 'No Tax on Tips' Impacts Entertainment Industry

The 'No Tax on Tips' program was further defined by the Treasury Department, which listed those occupations "that customarily and regularly receive tips" - which will be eligible for the tax break.

The eligibility list may surprise you. It includes the obvious (bartenders, food servers, housekeepers, but also comedians, singers, podcasters, influencers, and DJs).

So, you don't need to be a genius to figure out that subscription fees for influencers, podcasters, etc., will quickly become tips; however, recurring subscription fees do not qualify.

There are other limitations as well. The deduction is capped at $25,000/per year for individuals. And phase out at $150,000 for a single person and $300,000 for married tax filers. Tips do not qualify for deduction if they are received "in the course of certain specific trades - including the fields of health care, performing arts, and athletics." Going forward, streaming platforms will prominently feature tip income. 

The power dynamic has shifted in the media. Broadcast and cable media are now a distant second to online and streaming media. This trend will continue.

Google to Use AI for Filmmaking

Google's generative AI video tool, called FLOW, is expanding rapidly, so Google has decided to hire Hollywood filmmakers to assist content creators in developing new content using FLOW, which will be available free of charge to participants.

Generative AI tools are proliferating, with many AI-focused filmmakers utilizing AI video tools daily. Virtually all Hollywood studios have begun using AI, which reduces film production costs and enhances productivity. 

Google is onboarding filmmakers to assist creatives, allowing them to be at the forefront of this very competitive AI industry.