In a presentation to the Hollywood Chamber of Commerce, Strada founder and CEO Michael Cioni delivered a sobering replace on Hollywood’s trajectory (after his preliminary speak earlier within the 12 months). The issue, he argues, isn’t storytelling, viewers demand, and even AI – it’s a collective refusal to evolve. Hollywood’s sunk-cost mindset, he warns, is pulling the trade down whereas creators transfer quicker, freer, and extra profitably than ever earlier than. Is Hollywood damaged?
Eight months after his unique data-driven evaluation on the Hollywood Skilled Affiliation (right here’s our article on that), Michael Cioni from Strada returned with recent numbers and a more durable message. Regardless of rising world manufacturing spend and regular streaming progress, on-set work hours have collapsed to a thirty-year low. Empty phases dot the studios of Los Angeles. “If storytelling isn’t damaged,” he requested, “why are so many individuals out of labor?”
The reply, he stated, lies within the sunk price fallacy: an intuition to maintain pouring time, cash, and popularity into legacy programs just because they’ve existed for thus lengthy.
Try Michael’s second speak right here:
Hollywood’s anchor: the sunk price fallacy
Cioni likened Hollywood’s outdated workflows to an anchor on a cruise ship—dragging the trade down whereas the world sails forward. The behavior of defending infrastructure, networks, and instruments constructed over many years prevents significant change. “We preserve diving again into the identical methods and beliefs,” he stated, “even when the mannequin is shifting from beneath our ft.”
To outlive, he urged, the trade should have a look at knowledge with “sober eyes.” Audiences aren’t disappearing, and neither is funding. What’s damaged is the tempo—the velocity at which tales are made and delivered in comparison with the audiences consuming them.
Persevering with to speculate right into a “means of doing issues” as a result of it’s “at all times been completed this manner”, although it’s not working anymore as a result of the foundations of a enterprise are shifting – that’s the definition of the sunk price fallacy that Michael Cioni says Hollywood suffers from. Picture credit score: Michael Cioni / Strada
The center class of creativity is collapsing
Cioni locations the inventive center class – the producers, cinematographers, editors, and craftspeople who make most movies and reveals – on the coronary heart of the disaster. Studios and financiers, he stated, have an obligation to make enterprise selections that maintain this workforce. But the information tells a grim story: a 37% year-over-year decline in whole manufacturing, and the bottom taking pictures hours since 1995.
It’s an especially powerful 12 months for Los Angeles with regards to movie jobs. Picture credit score: Michael Cioni / Strada
“A few of my associates labored extra in the course of the pandemic than in 2025,” he famous. “We’ve constructed extra capability than there’s demand to fill it.” The infrastructure is overbuilt, and the workforce is underutilized.
Storytelling clearly isn’t damaged – however it’s reworking. Picture credit score: Michael Cioni / Strada
The rise of autonomy – and the brand new energy construction
The facility has shifted to creators, Cioni stated, as a result of autonomy beats legacy. The creator economic system now instructions the form of consideration and revenue as soon as reserved for main studios. Platforms like YouTube, Patreon, and Spotify reward efficiency, not seniority or union scale.
“YouTube has paid over $70 billion to creators,” he famous. “They’ve made hundreds of thousands of millionaires – all folks making their very own guidelines.”
What Hollywood as soon as achieved by way of gatekeeping and purple carpets, creators now accomplish with direct fan engagement. “They don’t observe the foundations,” Cioni stated. “They make the foundations.”
“We now not have the facility” – Michael Cioni’s chilling evaluation of the leisure trade. Picture credit score: Michael Cioni / HPA.
AI is just not the enemy – unhealthy enterprise fashions are
When critics blame synthetic intelligence for the trade’s decline, Michael Cioni pushes again. “Nothing that’s occurring to our trade proper now could be due to AI,” he stated. From crowd simulations in Lord of the Rings to face monitoring in colour grading, AI has been a part of filmmaking for many years.
Generative AI, in the meantime, faces its personal flaw: a damaged enterprise mannequin. Its reliance on costly, consumption-based compute makes it inherently unsustainable. “When you ask clients to pay for each interplay,” Cioni stated, “they notice they don’t want it that badly.”
Michael Cioni thinks that GenAI’s enterprise mannequin doesn’t (and received’t) work due to the price concerned with video generations. Picture credit score: Michael Cioni / Strada
And even when the tech improves, he added, Hollywood shouldn’t panic – as a result of AI excels at quick, low-precision content material. “We construct lengthy, complicated, emotionally coherent tales,” he stated. “That’s not what AI does effectively.”
Is generative video AI actually not going to be a menace for Hollywood?
Whereas I feel Michael is true together with his evaluation about generative AI nowadays – I’ve to disagree with him wanting ahead: If you concentrate on the speedy developments with generative photos and video throughout the final years, and even the final months, it’s clear to me that it’s going to grow to be a menace to Hollywood before later. The consistency drawback is at the moment being labored out with applied sciences like Veo 3.1, and after we speak about the price that’s at the moment related to producing video, I consider that this will probably be solved for 2 causes:
One, fashions have gotten higher to manage when it comes to what consequence we are able to anticipate (outcomes are much less random), leading to much less repeated processing needed.
And two, Moore’s Legislation applies right here too. Inside the subsequent few years, the price of era will shrink exponentially whereas the standard (decision, element) will enhance on the similar time. So even when there at the moment is an AI bubble (I actually consider there’s), even after it pops, it’s going to come all the way down to an affordable value to do video generations constantly.
Three steps to rebuild a damaged Hollywood
Michael closed with a sensible roadmap for reinvention—one which blends Hollywood’s infrastructure with the creator economic system’s agility.
Michael Cioni argues that there are advantages for each Hollywood and the creator economic system in cooperating intently. Picture credit score: Michael Cioni / Strada
1. Be a part of them, don’t anticipate them to hitch us
Partnership, not absorption, is the important thing. Executives and studios should embed themselves inside creator-led ecosystems quite than making an attempt to ask creators “up” to Hollywood. Conventional leaders becoming a member of creator-driven corporations, he stated, are already displaying how this may work.
Hollywood ought to be a part of creators, not vice versa. Picture credit score: Michael Cioni / Strada
2. Rethink the manufacturing economic system
Tax incentives assist, however they can’t repair a damaged enterprise mannequin. The trade ought to study from the creator economic system’s performance-based compensation, the place success is rewarded immediately and transparently. “There aren’t sufficient tax credit on the planet to beat unhealthy selections,” Cioni stated.
Rethink manufacturing economic system: Hollywood vs. creator economic system. Picture credit score: Michael Cioni / Strada
3. Rebuild infrastructure for the brand new workforce
He envisions a transfer towards infrastructure-as-a-service – studio campuses that provide built-in units, lights, cameras, and post-production areas prepared for creators to make use of immediately. As a substitute of renting an empty stage for six months, services ought to present full, versatile environments designed for multi-hyphenate creators.
The toughest fact: right-sizing the trade
Michael Cioni acknowledged the emotional toll of contraction. “I don’t must examine individuals who haven’t labored in a 12 months – I’ve dinner with them,” he stated. The imbalance between provide and demand requires painful correction, however with out it, the middle-class inventive workforce will erode additional.
He in contrast it to nature’s steadiness between wolves and caribou: survival depends upon sacrifice. “We’ve been dwelling massive for thus lengthy that we’ve forgotten how one can right-size,” he warned.
The following golden age begins in garages
Michael ended with cautious optimism. The following wave of storytelling, he stated, received’t emerge from studio tons– it’s already occurring “in 1,000,000 garages.” The instruments, platforms, and audiences are all there. The query is whether or not Hollywood will evolve quick sufficient to rejoin them.
Picture credit score: Michael Cioni / Strada
“What scares me,” he concluded, “isn’t realizing what’s occurring – it’s realizing that storytelling is reworking quicker than we’re.”
Storytelling, Cioni insists, isn’t damaged – it’s evolving quicker than the establishments round it. The selection for Hollywood is evident: evolve with the creator economic system or danger turning into historical past.
Will Hollywood lastly study to match the agility of creators earlier than its finest expertise decides to not come again? Or is Hollywood damaged? Tell us within the feedback.
