A year ago, Hollywood was rallying around the motto, “Survive till ’25.” The industry was hopeful it would get back to growth following a dip caused, in part, by streamers reining in their aggressive spending.
But three months into the new year, hopes of a comeback are fading. Production was already down, and now Hollywood has the impact of Trump’s tariffs to worry about.
The tariffs could weaken the economy and cut into the consumer spending and advertising that drives the TV and movie industry. In a downturn, people might book fewer trips to Disneyland, buy fewer movie theater and live events tickets, and trim their streaming subscriptions.
“Everyone was trying to think about the recovery and would 25 be an up year, but I think these tariffs are casting a shadow on prospects for growth Hollywood had,” said Scott Purdy, a media industry consultant at KPMG US.
‘It’s terrible out there’
Hollywood was already feeling malaise before this week’s tariff news.
“It’s terrible out there,” one reality TV producer lamented.
“Dread,” said an entertainment lawyer in summing up the mood.
Film sales out of Sundance, which can usually be counted on to set the market, have started out slow, and the box office has been dismal, this person said.
“People still want to be entertained,” they added. “But studios overextended themselves to keep up in streaming so they need to correct.”
For the first two months of the year, US orders of shows fell 20% year over year to 390 titles, according to data from Ampere Analysis. Ampere had previously predicted total production spending by the major players including Netflix, Amazon, and Disney, would be flat in 2025.
The box office isn’t looking great, either.
In a new forecast, Gower Street Analytics revised down its 2025 outlook for the domestic box office to $9.5 billion from $9.7 billion, citing a lack of breakout hits in the first quarter. The revision of its December forecast represents an 8% increase over 2024 but a 17% decline over the average of the three pre-pandemic years.
Looking at broader consumer behavior, Hollywood also has YouTube’s ongoing ascendance to worry about.
YouTube now makes up more than 10% of TV viewing, threatening to eat into traditional TV and film consumption. Investors are pouring money into the YouTube-fueled creator economy. Last year brought deals for companies like Dude Perfect and influencer agency Timeline.
LA has hit historic lows
A new report from FilmLA, Hollywood’s film permitting office, painted a grim picture of the industry’s center.
Sound stage occupancy levels, which historically were in the 90% range, declined to 63% in 2024. The number of projects and shoot days — the latter of which particularly reflects the loss of work due to declining episode counts — were at their lowest level since 2018 (except for the 2020 pandemic year when production mostly shut down).
Wall Street had bet big that studios would continue spending in the streaming wars and keep sound stages full, but that bet has soured.
An ongoing exodus of productions to lower-cost entertainment hubs outside the country has left US soundstages to fight over a smaller number of productions.
“Everyone is discounting their rates from the prior years,” said Hal Rosenbluth, president of Kaufman Astoria Studios. “I’m in it 45 years — I’ve never seen it like this.” Rosenbluth said on the bright side, his phone had been ringing more lately with prospective productions, a sign that activity could pick up later in the year.
Glimmers of hope for legacy film and TV companies
On the plus side, Disney’s and Warner Bros. Discovery’s streamers are starting to show profitability.
And if people trade down in entertainment spending, it could be a positive for free or ad-supported streaming services.
Trump’s tariffs could also spark retaliatory actions overseas, which could mean perks to film globally might go away and drive productions back to the US.
Already, production has shifted slightly back to the US. Ampere found that in the first quarter, about 43% of the major global streamers’ commissions were being made in North America, up from 36% in the first quarter of 2024 — though still down from 53% in the first quarter of 2021.