New Year Observations and Predictions for Hollywood's Near Future

The Good, the Bad and the Surly

First things first… Happy 2026… I guess.

If you look around the media these days, particularly conservative media where no love has been lost for Hollywood, you’ll see that the prevailing wisdom is that the movies as we have always known them are a dead man walking… that the zombie of theatrical motion pictures will shamble on for a while, maybe even for years. But that it will eventually fall over dead, unable to generate enough power even to keep its own legs moving one foot after the other for want of a single fan willing to leave their house and pay to enter a theater.

Maybe so… and then again maybe not. As with most things here at The Continental Congress, you’re going to find that when it comes to analyzing Hollywood’s future, I am hopelessly allergic to doom.

It is often impossible to see a true business revolution while you are right in the messy middle of one. Typically the beginnings of the biggest, most disruptive revolutions are only obvious in retrospect. When it comes to Hollywood, some of the revolutions currently roiling the business are obvious… the rise of AI and the migration to streaming, for instance. But AI and streaming are merely tools which make the movie making and distribution processes easier and cheaper, which reduce the barriers to entry that were built and maintained by the major studios and which have held steady for nearly a hundred years.

As I look around, I see that we are in the middle of a less obvious but perhaps more fundamental kind of revolution… one in which an entire movie-making system, along with the major multi-national corporations that have run it into the ground, is in the process of being totally upended and replaced by a group of smaller more nimble theatrical motion picture companies whose old-fashioned Hollywood business models are free of the shackles the traditional movie studios have voluntarily placed around their own wrists and ankles… shackles which are slowly killing them, as evidenced by the fact that two of the biggest studios (Paramount and WB) have been, or are in the process of being, subsumed by other companies over just the last year and which, for all practical purposes, will soon cease to exist as we have always known them.

Against this backdrop, note that a new-ish film studio most people have never heard of called “Neon” will likely have multiple movies in contention for awards in this upcoming Oscar Season, a statistic that would put the major films studios to shame if I thought they still cared about such things. Another upstart company A24, has consistently bucked the Hollywood studio trend of only making two kinds of movies… huge budget blockbusters (generally involving superheroes) and small horror movies. Unlike the big traditional Hollywood studios it clearly aspires to challenge, A24 has made movies in almost every genre imaginable, from horror to action, thrillers, comedies, coming-of-age and award-worthy adult dramas. Angel Studios, has quickly become successful making movies in a genre that had literally ceased to exist… faith-based movies with a hopeful message and which appeal to mostly conservative, generally religious moviegoers in red state flyover country.

There’s nothing new about smaller companies making and releasing their own films, of course, that’s been happening in Hollywood for decades. But what is different in 2026 is that by abandoning entire categories of popular movie genres, the major studios have created opportunities for these smaller, leaner companies to make and release not just art house films, but the kind of commercial and profitable fare that has traditionally been beyond their reach.

But even with A24 and others rushing in to fill some of these genre gaps, there is still plenty of untapped opportunity out there. To pick just one example, male-oriented testosterone-heavy action movies and action-comedies featuring tough courageous alpha-male heroes like “Lethal Weapon”, “48 Hours”, “Commando” and “Beverly Hills Cop” were once the kind of lower-budget programmers which consistently made the studios money in the 80’s and 90’s, but which have now all but disappeared from theaters. This happened not because these movies stopped being profitable, but because they no longer work within the broken framework of modern Hollywood’s cultural and economic calculations. The “new” studio which figures out how to start making these male-driven movies again, is quickly going to find itself swimming in cash.

Creatively, these “new” companies are reminiscent of groundbreaking film companies of the 70’s like American Zoetrope and Raybert Productions which changed the way Americans thought about the movie-going experience. But they also operate in a manner which reminds me of the traditional movie studios of the 1970’s, back when decision-making powers were invested in very small groups of creative minded executives, like the one-two punch of Frank Yablans and Robert Evans at Paramount.

In the 70’s, Frank and Bob decided which movies the studio would make very nearly all by themselves with little corporate oversight, and largely based on nothing but their own instincts about which stories, stars and directors audiences would be willing to pay to see at the theater. They had a good handle on what the market wanted in a variety of genres and it’s hard to argue that they didn’t get it right more often than do our current crop of studio heads who are much less powerful than their 70’s counterparts simply by virtue of the fact that they are beholden first to shareholders, and must have their production decisions approved by “greenlight committees” full of executives from departments that have nothing to do with, and executives who know little about, the process of making a great movie for its own ends.

The difference between what’s happening at the traditional studios, where things are definitely not looking up, and what these new companies are doing may be as simple as the former are publicly traded and the latter are not. The long-term success of companies like A24, Neon and Angel, to say nothing of the compensation packages of their senior executives, will be based on whether or not the movies they make and release are profitable… full stop. At the big publicly traded studios, where the stock price rules over all like Sauron from his tower at Barad-Dur, the financial incentives have not been this simple for a long time.

To pick just one awful example, WB CEO David Zaslav has managed to find himself in a position where selling off for parts the studio he was hired to successfully run, a process which is going to result in thousands of layoffs from the very same divisions which created the value Netflix now wants to own, will reward him with generational wealth, to the tune of $600 million. That is one hell of a screwed-up incentive structure upon which to build a movie company.

At the same time, the studios are making a fraction of the number of movies they were making even a decade ago, and this has been hard on the physical movie theater business, too. Over the holidays I drove by a multi-plex in a suburb of Tulsa, Oklahoma where only two movies (“Zootopia 2” and “Avatar: 17") were playing on all ten screens. From a marketing perspective alone, an enormous marquee with ten lines in which only two of the numbered lines are filled is just a bad look. But the bigger problem for a multi-plex which only has two mainstream films to run is… well, what happens if one of those movies bombs? Like anything else, the best way to win in the movie business is to diversify, and a theater which can only show “Avatar” and “Zootopia” has not diversified its offerings enough to cover the margin of error.

The push for shorter exclusive theatrical windows in favor of faster transitions to streaming has also hit the theaters hard. The revenue split between studio and theater in the first two weeks of release can be as lopsided as 90% in favor of the studio. The revenue split gets better the longer a movie is in theaters, so when you have a movie like “The Fall Guy” which only gets an 18-day release window, theaters likely never get to their higher splits.

In the end, we are going to see a lot of theater owners give up, take their ball and go home. There is sadness in this, but also opportunity. The big traditional studios must release their movies on 4,000 screens or more to force the big opening weekends which justify their insane budgets. Smaller companies like A24 do not generally need these kinds of massive release patterns in order to turn a profit, and they have even been known to embrace old-fashioned “platform releases” where the number of screens grows larger every week, and movies remain in theaters for months rather than days.

A world where the number of available screens is reduced, but where exclusive theatrical windows are much longer, would likely be great for these newer independent studios and those theaters which survive this upheaval. It would also be great for fans of the theatrical movie experience who could wind up with more choices and a lot more time in which to catch all the movies they want to see before they disappear forever into the streaming maw.

None of this is to say that streaming won’t eventually win the war for our attention, it is only to say that theatrical motion pictures are not going away. There will always be movies for people to go out and see on Friday night… for all the justifiable complaints about expensive tickets, expensive popcorn, nasty political messaging and thirty minute trailer delays, the theater-going experience remains a unique and enjoyable experience for many, one that is poorly-replicated by the streaming model. The scope of the theatrical experience may wane for a while (smaller movies, fewer theaters), but just because it won’t look like the massive blockbuster industry of the 80’s and 90’s, doesn’t mean it can’t look like the lean, courageous, aggressive, and in many ways more creatively interesting version of Hollywood that existed in the 60’s and 70’s, and which produced many of the finest and most memorable films ever made.

If Hollywood can find its way back to making great films as an end in and of itself, there is no reason why the movie business can’t begin to grow again, and in the process wrestle back some of that market share lost to the soulless tech companies who want us permanently planted on our couches alone and scrolling while we only-half pay attention to the background “content” they are producing in vast stinking heaps.

(Above: your humble host GMFW contemplates the future of the movie business)

• all predictions null-and-void if any (or all) of the Hollywood creative unions go on strike later this year

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