Thursday

07-10-2025 Vol 2017

Hollywood’s Tumultuous 2025: A Midyear Review of Industry Changes and Challenges

2025 has proven to be an eventful year in Hollywood, with significant occurrences impacting the entertainment landscape.

From blockbuster hits to major box office flops, the industry is grappling with various challenges.

Notable events include the ongoing second Trump administration, the complicated legal battle between Blake Lively and Justin Baldoni, and the federal trial of Sean “Diddy” Combs, who faced serious charges but was largely acquitted.

Additionally, California has dealt with devastating wildfires that hit the Pacific Palisades and Altadena areas back in January.

As the industry attempts to rebound, there is a pressing need to understand ongoing changes affecting movies, television, and streaming services.

The box office has faced significant volatility since the onset of the COVID-19 pandemic, with the 2023 strikes leading to a hampered release schedule.

Although those strikes are now behind us, the uncertainty continues to loom large over the industry.

After a rocky first quarter, the industry has seen a revival attributed to hits like “Minecraft,” “Sinners,” and “F1,” resulting in a domestic gross of $4.43 billion to date.

This marks a 15% increase compared to the same period last year, although sales are still down 26% from 2019.

Attendance also saw a rise of 6.5% from the previous year, with approximately 350 million tickets sold.

Despite these positive figures, the challenges for studios remain significant.

The ongoing struggle to attract audiences beyond the largest blockbusters persists, with studios finding it increasingly difficult to create “event” movies that resonate with younger audiences like Gen Z.

The exorbitantly high production costs exacerbate the situation, which means that even a film with robust box office numbers might not break even during its theatrical run.

Notably, even low-budget horror movies are becoming a thing of the past, represented by the escalating production budgets for films such as “Final Destination: Bloodlines” and “28 Years Later.”

With audiences conditioned to wait for home viewings shortly after theatrical releases, theater owners at CinemaCon are advocating for longer standard gaps between these two formats.

Moreover, advertisements are infiltrating preshows, further complicating the cinema experience.

Amidst these challenges, July holds promise, especially following the impressive $147 million opening weekend of “Jurassic World Rebirth.”

Trailers for Warner Bros. and DC’s “Superman” reboot and Disney and Marvel’s “The Fantastic Four: First Steps” aim to rejuvenate the superhero genre.

However, the prerelease tracking for “Superman” indicates variability, although an opening weekend prediction of $125 million seems valid.

“The Fantastic Four” is also expected to achieve a debut near $100 million.

Conversely, August lacks evident hits, although Paramount’s revival of “The Naked Gun” could deliver some comedic relief.

In the realm of legal disputes, Paramount caved into pressure and reached a $16 million settlement regarding President Trump’s lawsuit connected to CBS News’ “60 Minutes” interview featuring Kamala Harris.

Trump claimed victory over what he termed the “Fake News media,” while advocates for the First Amendment voiced their discontent, criticizing Paramount for opting for peace instead of standing up for press freedom in what many regarded as a frivolous case.

Despite the settlement, rumors suggest that Trump’s team is anticipating advertising dollars for public service announcements related to MAGA-friendly causes, with Paramount denying involvement in any such agreements.

In the wake of this settlement, new leadership at Paramount, including its soon-to-be owners at Skydance Media and RedBird, are eager to focus on future ventures.

Their focus is particularly on the Federal Communications Commission’s approval of an $8 billion merger that could reshape the company’s profile.

Meanwhile, Paramount is entangled in a protracted negotiation with the creators of “South Park,” who demand a hefty deal exceeding $2.5 billion.

Currently, Trey Parker and Matt Stone are locked into their existing $900 million agreement, while Paramount seeks to manage the streaming rights for the series.

The company wants to host “South Park” on Paramount+ but is also contemplating splitting rights and costs with HBO Max, its current streaming partner, for the 300-plus episodes of the show.

The anticipated streaming rights deal could yield over $200 million annually, a vital component in today’s competitive landscape.

Skydance’s reluctance to engage in a high-stakes deal appears justifiable, especially given “South Park’s” longevity into its 27th season.

However, Parker and Stone maintain considerable leverage.

Without “South Park,” Comedy Central would face significant content deficits.

Legal representatives for Parker and Stone have expressed their discontent with Skydance representatives overreaching during negotiations.

The creators of “South Park” succinctly expressed their frustration on social media, calling the state of affairs a “s—show” that is adversely affecting the beloved series.

In more favorable news, California Governor Gavin Newsom signed legislation enhancing the film and television tax credit program.

The new law allocates $750 million annually for entertainment productions operating within the state, significantly more than the previous $330 million cap.

The newly signed legislation permits tax credits of up to 35% for productions based in Greater Los Angeles and up to 40% for those outside its confines.

While the tax credit program now includes more qualifying productions, it does not extend to above-the-line expenses like actor and director salaries, a persistent setback as California competes with other states and international markets.

As New York and Texas ramp up their financial incentive initiatives, California seeks to resurrect its once-thriving production economy through enhanced incentives.

In a pivotal moment for streaming services, May marked the first time that television engagement for platforms like YouTube and Netflix surpassed traditional broadcast and cable networks.

Together, streaming services commanded 44.8% of total TV set viewership, a historic high for direct-to-consumer platforms, while linear networks held a narrow 44.2%.

As established networks continue to decline amidst these trends, many legacy media companies are making cuts, with firms such as Disney and Paramount letting go of numerous employees to adapt to new realities.

Warner Bros. Discovery has taken steps to trim its substantial debt by compartmentalizing its operations, separating studio and streaming operations from its global networks.

This strategy mirrors NBCUniversal’s decision to establish a new company, Versant, that will focus exclusively on cable networks.

These strategic moves carry risk, especially with cable networks, which, though dwindling in numbers, remain profitable.

Conversely, streaming is indeed showing growth, albeit after prolonged periods of operating in the red.

Some of the year’s most significant financial data highlights the shifts occurring in Hollywood.

Alcon Entertainment acquired the film library of the bankrupt Village Roadshow for $417.5 million, a notable addition that includes stakes in films such as “Joker” and “Mad Max: Fury Road.”

Village Roadshow fell into bankruptcy following a severe legal dispute surrounding the dual release of “The Matrix Resurrections” in both theaters and streaming.

Director Justin Baldoni experienced a legal setback when a judge dismissed his lawsuits against Blake Lively, Ryan Reynolds, the New York Times, and others.

The court determined that Baldoni’s allegations, including defamation and breach of contract, lacked substantial legal grounding.

In a significant revelation, “Ne Zha 2,” a Chinese animated film, emerged as the biggest movie of the year with gross earnings exceeding $2 billion.

Most of its revenue came from the domestic Chinese market, signifying the resiliency of local films despite international competition.

Nevertheless, U.S. films still find success in China, highlighted by the $41.6 million opening weekend of “Jurassic World Rebirth.”

Adding a legal dimension to current disputes, Walt Disney Co. and Universal have filed a $20 million lawsuit against AI firm Midjourney, claiming infringement of their intellectual property through its image-generating technology.

Each violation cited carries a potential penalty of $150,000, leading to a dramatically high overall figure for damages if the case goes to court.

Furthermore, valuation for OpenAI, the pioneer behind ChatGPT, has skyrocketed to an astonishing $300 billion.

Finally, Disney agreed to pay $9.2 billion for Comcast’s stake in Hulu, placing a total valuation of $27.6 billion on the service after negotiations yielded a price lower than what Comcast initially sought.

In summary, the entertainment industry faces a complex web of challenges while simultaneously navigating fresh opportunities.

As the year advances, attention will remain fixed on box office performance, legislative adjustments, and the ever-evolving audience dynamics in Hollywood.

image source from:latimes

Benjamin Clarke