Sep 25, 2026 · 39 min
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Hollywood’s production model fractures as AI raises the stakes
Hollywood Was Cooked Before AI, and Now It's Only Getting Worse
Los Angeles is losing not only filming activity but also the collaborative workplaces and local spending that once anchored its cultural economy.
- 1Streaming and tax incentives shifted production away from Los Angeles, shrinking employment and weakening the city’s creative ecosystem.
- 2Smaller writers’ rooms and powerful content libraries are changing how television creates, distributes, and monetizes entertainment.
- 3Horror remains comparatively resilient, while AI intensifies debates over which creative and production jobs can survive.
Don't miss
Hayes Davenport explains why horror remains one of Hollywood’s healthiest genres while other creative categories struggle with shrinking budgets and AI pressure.
The brief
At a live show in Hollywood, Hayes Davenport joins Tracy Alloway and Joe Weisenthal to examine why the entertainment industry was weakening before generative AI arrived.
Streaming disrupted network and cable television, while tax incentives and lower labor costs pulled productions elsewhere; Los Angeles retained studio space but lost enough demand to fill it.
The contraction reaches beyond soundstages: smaller writers’ rooms, fewer local jobs, and less spending threaten restaurants, small businesses, tourism, and the city’s cultural identity.
Older libraries such as Family Guy remain formidable competitors through reruns and memes, even as the industry debates whether AI can replace creative or below-the-line work.
Horror offers a counterexample, using modest budgets and strong commercial upside while comedy faces abundant free content and uncertain economics.
What was said on this episode
32 statements · 9 positive · 17 negative · 2 mixed · 4 neutral
Los Angeles shoot days fell to roughly half their 2016 level.
“So that is half of what it was in 2016.”
Listen at 4:54
Streaming expansion increased the number of television shows.
“There were more shows on Netflix and Amazon, entire new networks being built.”
Listen at 5:26
Network and cable television production declined during streaming expansion.
“And at the same time... a decline in the number of network productions. And cable. Cable was shrinking around the same time.”
Listen at 5:37
Many Hollywood workers are struggling after production cuts.
“people are struggling for sure.”
Listen at 7:07
Los Angeles influencers bring global subscriber money into the local economy.
“But the influencer network is absolutely part of the economy. Okay. It is taking money. from subscribers around the world and like putting it into the local economy. And so it's really, really important.”
Listen at 7:48
New York social media culture is being exported across the country.
“It tells a story about New York that is exporting it to the rest of the country.”
Listen at 9:03
Los Angeles no longer dominates social-media cultural influence as before.
“But we don't own it the same way as we did.”
Listen at 9:35
Film productions relocate to jurisdictions offering tax breaks.
“It followed the tax break.”
Listen at 10:48
Production relocations are driven by tax and labor costs.
“It's a tax and labor thing.”
Listen at 11:38
Studio real estate faces problems because production demand has weakened.
“And the demand is not exactly what it was. And so we're seeing issues in the studio real estate.”
Listen at 12:12
Single-writer prestige television is cheaper for studios.
“A lot of prestige shows are kind of written by one person. The studio's like that. It is cheaper.”
Listen at 13:06
Large television writing staffs like Family Guy’s 30-person room will not return.
“Family Guy had 30 writers when I was there. That does not exist anymore and never, ever will again.”
Listen at 13:26
Television writers’ rooms are continuing to shrink.
“So like the rooms are getting smaller and smaller.”
Listen at 14:12
One person cannot effectively write shows like Great News or Family Guy.
“with a show like Great News, with a show like Family Guy, it is almost impossible to write a show like that as one person”
Listen at 14:33
Existing television libraries compete with newly released shows.
“The entire library. uh is is competition not just what's on the other network at the same time”
Listen at 19:21
Family Guy and The Office continue to command high licensing prices.
“individual shows are definitely still really valuable Family Guy, The Office, like those will still command like a big price.”
Listen at 19:46
Some large portions of television libraries are losing value.
“some big chunks of the library, I think, are also becoming less and less valuable as well.”
Listen at 20:04
Los Angeles is among the least generative-AI-friendly U.S. cities.
“I think this is one of the least AI-friendly cities in the country, I would guess, when it comes to generative AI.”
Listen at 20:23
Below-the-line production jobs face immediate AI-related disruption.
“that is sort of on an immediate precipice when it comes to AI.”
Listen at 21:27
Production job losses have large ripple effects across Los Angeles’ economy.
“That level of job loss is a huge issue. It does like. I worked in City Hall for a while. It has huge ripple effects on the rest of the economy.”
Listen at 21:39
Studios have not yet replaced writers’ rooms with AI.
“But it has not come for writers' rooms in the same. Studios aren't saying, like, we got this. We're just going to have AI take care of this. So far.”
Listen at 22:47
Horror is currently Hollywood’s most active genre.
“the genre that is the most alive in Hollywood right now is horror.”
Listen at 23:27
Mid-budget horror films can be commercially viable and profitable.
“You can make a mid-budget movie that is commercially viable, that a studio will put out because they know it will make more money.”
Listen at 23:55
AI handles genres other than comedy more easily.
“Comedy is hardest for AI to do, but it can do other genres more easily.”
Listen at 24:20
Generative AI can currently produce film or television outlines.
“It can do outlines right now.”
Listen at 24:29
AI will soon be able to perform additional television writing tasks.
“it's right there. It's not in the distant future that it'll be able to do that stuff.”
Listen at 24:41
Comedy production is declining in Hollywood.
“Comedy is in decline in terms of the productions that are getting done, for sure.”
Listen at 24:50
AI-generated entertainment is more expensive than free user-generated content.
“AI being cheaper. It is not as cheap as free.”
Listen at 26:44
Hollywood represents about 20% of Los Angeles’ economy and is closely connected to it.
“Hollywood is not L.A. and it's not the L.A. economy. It's like 20% of the economy or something. But it's not a silo. It is very, very... closely connected.”
Listen at 28:18
Declining production pushed some Los Angeles restaurants into failure.
“I watched restaurants that had been taken right to the edge by the shutdown get shoved over by the decline in production.”
Listen at 28:38
Los Angeles nightlife and events are still recovering.
“The recovery is still happening when it comes to nightlife and events.”
Listen at 31:28
The shared mainstream cultural monoculture has disappeared.
“The monoculture has definitely like gone away.”
Listen at 33:55
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.