Streaming: Hollywood’s creative and economic landscape
By Philip Alberstat, an Emmy Award-winning producer and content creator.
The entertainment industry is experiencing its most dramatic transformation since the advent of television, as streaming platforms revolutionize how content is produced, distributed and consumed in Los Angeles and beyond.
Netflix’s evolution from DVD rentals to streaming giant sparked an industry-wide shift that has upended traditional Hollywood business models. The success of early Netflix originals like “House of Cards” and “Orange is the New Black” demonstrated streaming’s potential to rival traditional television. This catalyst prompted tech giants Amazon and Apple to invest billions in their own platforms, while legacy studios launched services like Disney+, Paramount+ and Peacock.
The streaming revolution has fundamentally altered viewing habits. Gone are the days when hit shows like “Friends” or “Seinfeld” commanded massive live audiences. Instead, series like “Stranger Things” and “The Last of Us” release entire seasons at once, enabling binge-watching and transforming how audiences engage with content. This shift has led to shorter theatrical windows – “Barbie” and “Oppenheimer” arrived on streaming platforms just months after their box office success, compared to the traditional six-month wait.
The streaming boom has brought mixed fortunes to Los Angeles’ entertainment workforce. While demand for content has created new opportunities, with streaming giants like Netflix establishing permanent production hubs on Sunset Boulevard and Amazon taking over Culver Studios, production increasingly moves to other locations. Georgia’s generous tax incentives have attracted major productions like “Stranger Things” and Marvel’s upcoming projects, while Vancouver hosts numerous streaming series including “The Night Agent” and “Percy Jackson.”
The rise of virtual production technology, exemplified by Industrial Light & Magic’s StageCraft facility in Manhattan Beach, where “The Mandalorian” is filmed, represents both innovation and disruption. While this technology keeps high-end production in Los Angeles, it also enables more work to be performed remotely. Visual effects for shows like “House of the Dragon” can now be completed by artists working worldwide.
Production compensation
Recent labor disputes highlighted streaming’s impact on compensation. The 2023 WGA and SAG-AFTRA strikes centered on establishing fair payment structures in an era where viewership data remains closely guarded by platforms. Writers of successful streaming shows like “Wednesday” and “Ted Lasso” argued for residuals comparable to traditional television, where hits like “The Office” generated substantial ongoing revenue for creators.
Production economics have also transformed. While Netflix once offered generous budgets — reportedly spending $200 million on “The Gray Man” and $160 million on “The Crown’s” final season — streaming services have begun tightening spending. Amazon’s “Citadel” and Apple’s “The Morning Show,” despite their high budgets, face increased scrutiny as platforms seek sustainable business models. This shift has particularly affected mid-budget films, with studios focusing investment on proven intellectual property like Marvel series and Star Wars spin-offs.
Industry experts anticipate further changes ahead. Market consolidation appears likely, as evidenced by Warner Bros. Discovery’s merger and the Disney-Hulu integration. Meanwhile, theatrical releases show resilience — “Top Gun: Maverick” and “Avatar: The Way of Water” demonstrated audiences will still attend theaters for major releases, prompting streaming services like Amazon (with “Air”) and Apple (with “Killers of the Flower Moon”) to embrace theatrical runs.
The integration of AI and virtual production technology promises to further revolutionize content creation, while streaming services expand aggressively into international markets. Netflix’s “Squid Game” from South Korea and “Money Heist” from Spain proved global content can achieve worldwide success, leading to increased investment in international productions like “3 Body Problem” and “Berlin.”
Despite these challenges, Los Angeles maintains its position as an entertainment hub. Major streaming services continue to lease studio space across the city, from Netflix’s expansion at Sunset Bronson Studios to Amazon’s presence at Culver Studios.
The city’s deep talent pool and production infrastructure, combined with initiatives like the expanded California Film & Television Tax Credit Program, help retain productions even as the industry evolves.
As streaming platforms mature and business models evolve, the industry’s foundation remains unchanged: delivering compelling stories to audiences worldwide. The next chapter in Hollywood’s history is being written in pixels and data streams, but Los Angeles continues to adapt as it has throughout previous industry transformations.
Category: Entertainment
