I recently tried out a new AI assistant that generated the following article for me about how the movie industry has changed in the past decade:

​The Transformation of the Movie Industry: A Decade of Disruption (2015-2025)
The past ten years have witnessed one of the most dramatic transformations in Hollywood history, fundamentally reshaping how movies are made, distributed, and consumed. What began as gradual industry shifts in 2015 accelerated into a complete restructuring following the COVID-19 pandemic, leaving the movie business permanently altered across every major revenue stream and operational model.
The Collapse of Traditional Revenue Streams
The most striking change has been the near-complete collapse of the home video market, which served as a crucial profit center for studios for decades. The numbers tell a devastating story: revenue plummeted from $10.1 billion in 2014 to just $900 million in 2024—a staggering 90% decline that represents one of the most severe industry contractions in entertainment history. This wasn’t simply a shift from physical to digital sales; digital movie purchases also declined during this period, indicating a fundamental change in consumer behavior rather than mere format substitution.
Major retailers abandoned the format entirely, with Best Buy discontinuing DVD and Blu-ray sales in 2024 and Netflix ending its 25-year DVD rental service in 2023. What was once a $16 billion industry at its 2005 peak has become a niche market worth less than $1 billion, eliminating a revenue stream that previously allowed studios to recoup costs on theatrical disappointments and generate ongoing profits from catalog titles.
Theatrical Box Office: Pandemic Disruption and Incomplete Recovery
The domestic box office, already showing signs of decline before the pandemic, experienced an unprecedented collapse starting in 2020. While 2023 marked a recovery milestone with over $9 billion in domestic revenues—the highest since the pandemic—this figure still fell $2 billion short of pre-pandemic levels. The 2024 box office hit $8.7 billion, representing the first post-pandemic year without improvement and leaving the industry down approximately 23% from pre-pandemic performance.
More concerning than revenue figures is the decline in moviegoing frequency. The pandemic appears to have accelerated the decline in per capita theatrical admissions by roughly 15 years, with 2024 trending toward just 1.8 tickets sold per American. This suggests the pandemic didn’t just temporarily disrupt viewing habits but fundamentally altered the relationship between audiences and theatrical entertainment.
Industry projections suggest a gradual but incomplete recovery, with revenues expected to reach $10.8 billion by 2029—still below historical peaks. The structural challenges facing theatrical exhibition reflect deeper changes in consumer preferences and the competitive landscape.
The Streaming Revolution and Its Impact
Streaming services have emerged as both the primary disruptor and the industry’s potential salvation. Even before the pandemic, streaming revenue had already eclipsed theatrical revenue, offering studios significantly higher profit margins since they retain a much larger percentage of streaming income compared to theatrical box office splits.
The pandemic dramatically accelerated streaming adoption and experimentation. Warner Bros.’ decision to release all 2021 films simultaneously on HBO Max marked a watershed moment, though the industry ultimately pulled back from day-and-date releases following pushback from theater owners. While simultaneous theatrical and streaming releases have largely ended, the pandemic gave consumers extensive experience with at-home viewing of major releases, permanently altering expectations about content accessibility.
The economic logic strongly favors streaming for studios. Disney achieved its first-ever full calendar-year streaming profit in 2024, while Warner Bros. Discovery multiplied its streaming profits from the previous year. These successes have validated the massive investments studios made in building streaming platforms and content libraries.
Budget Inflation and Strategic Shifts
Paradoxically, as traditional revenue streams declined, production budgets soared to unprecedented levels. Several factors drove this inflation: pandemic-related production costs, increasingly sophisticated visual effects requirements, and sky-high salaries commanded by A-list talent. Studios also felt pressure to create spectacular “event” films capable of drawing audiences away from home entertainment options.
The budget escalation is dramatic when examining franchise evolution. “The Fast and the Furious” cost $38 million to produce, while “Fast 7” required $250 million—a more than sixfold increase that exceeds inflation by a significant margin. Productions with budgets exceeding $200 million, once rare, have become commonplace in the 2020s.
Beyond individual films, studios now allocate enormous content budgets across their operations. Disney planned to spend $33 billion on content in 2022, Warner Bros. Discovery allocated $23 billion, and Netflix budgeted $17-18 billion. These figures reflect the new reality that studios must simultaneously feed streaming platforms with vast amounts of content while producing fewer, more expensive theatrical releases.
Studio Profitability and Industry Consolidation
The financial pressures have produced mixed results for major studios. NBCUniversal and Disney saw their bottom line rise in their studio units during calendar year 2024, Warner Bros. Discovery and Sony dipped, while Paramount prepares for a sale. Paramount, which is nearing its sale to David Ellison’s Skydance Media, continued to write red ink in its Filmed Entertainment unit but it narrowed its loss in 2024 thanks to slightly lower expenses, highlighting how financial pressures are driving industry consolidation.
The studios that have successfully transitioned to streaming profitability while managing costs effectively have outperformed those still heavily dependent on theatrical revenues. This has created a bifurcated industry where scale and diversification across multiple revenue streams have become essential for survival.
Looking Forward: A Permanently Changed Industry
The movie industry entering 2025 bears little resemblance to its 2015 counterpart. The traditional model—theatrical release followed by home video sales and television licensing—has been replaced by an integrated streaming-first approach where theatrical releases often serve as marketing events for streaming content.
The financial mathematics have fundamentally changed. Studios can no longer rely on home video revenues to offset theatrical disappointments or generate long-term catalog profits. Instead, they must create content that drives streaming subscriptions and retention while commanding premium prices for the diminished but still significant theatrical market.
Consumer behavior has permanently shifted toward on-demand, at-home consumption, accelerated by pandemic-era viewing habits. While theaters remain important for event films and certain demographics, they no longer occupy the central role in the entertainment ecosystem they held for nearly a century.
The industry’s future appears to belong to large, diversified entertainment companies capable of producing content across multiple formats and price points while maintaining direct relationships with consumers through streaming platforms. The past decade’s disruption has been painful but has ultimately created a more diverse, if more complex, entertainment landscape that better reflects how modern audiences consume media.
This transformation represents not just a business model shift but a fundamental reimagining of how stories reach audiences in the digital age. The movie industry that emerges from this decade of disruption will be leaner, more technology-dependent, and more directly connected to consumers than ever before.