Why Hollywood Collapsed

(The Business Model, Not Politics)

Hollywood didn’t collapse because of politics, culture wars, or “audience fatigue.”

It collapsed because the business model stopped working.

For decades, legacy studios survived on leverage, inflated accounting, and opaque reporting. When streaming disrupted cash flow and debt came due, the system couldn’t hide the truth anymore.

The collapse wasn’t sudden.
It was inevitable.

The Hollywood Business Model Was Built on Leverage, Not Profit

Legacy Hollywood ran on one core assumption:

Tomorrow’s hits would pay for today’s debt.

Studios financed films by:

borrowing against future revenue
inflating budgets through internal overhead
rolling losses forward through accounting
self-reporting profitability

As long as theatrical revenue was strong and debt was cheap, the illusion held.

But profit was rarely real — it was deferred.

Inflated Budgets Hid Structural Failure

Studio films didn’t cost what audiences were told they cost.

Budgets were inflated by:

executive overhead
internal service markups
cross-department billing
marketing charged internally at premium rates

This allowed studios to:

justify massive financing rounds
suppress “profit” on paper
retain control over revenue narratives

The same accounting tricks later used on independent filmmakers were perfected here.

Self-Reporting Was the Quiet Killer

Hollywood relied on internal accounting.

Studios reported profitability to:

investors
partners
talent
creators

Without transparent third-party verification.

That’s how:

billion-dollar films “lost money”
backend participants were never paid
financial reality stayed hidden

Self-reporting wasn’t a flaw.

It was the operating system.

Streaming Exposed the Lie

Streaming didn’t kill Hollywood.

It exposed it.

Streaming:

flattened revenue curves
removed theatrical cash surges
shortened revenue windows
demanded efficiency

Suddenly:

debt couldn’t be rolled
inflated budgets were visible
losses arrived faster
accounting tricks stopped working

The system needed time.
Streaming removed it.

Debt Came Due — And There Was Nothing Underneath

By the time the truth surfaced:

studios were carrying tens of billions in debt
franchises were exhausted
marketing costs outpaced returns
investor patience evaporated

The result:

mergers
asset sell-offs
layoffs
licensing catalogs to survive

This wasn’t mismanagement.

It was the math catching up.

The Same Model Was Used on Filmmakers

What collapsed Hollywood is the same system used on independent filmmakers:

self-reporting
recoupment-based accounting
inflated expenses
opaque revenue
permanent deficits

Hollywood didn’t fail because it treated filmmakers poorly.

It failed because it treated everyone the same way — including itself.

Why Studios Are Selling to Streamers

This is not strategy.

It’s survival.

Studios now:

license catalogs instead of owning futures
sell brands instead of building systems
cut staff instead of fixing models

Streamers don’t want Hollywood’s process.

They want:

IP
libraries
efficient delivery

The rest is being stripped away.

Hollywood Didn’t Adapt. It Cracked.

Legacy studios were built for:

scale
leverage
secrecy

The current landscape rewards:

efficiency
transparency
speed
ownership

Hollywood didn’t evolve fast enough.

So it collapsed inward.

What Replaces Hollywood Isn’t Another Studio

The replacement isn’t a new major.

It’s a new operating system.

One where:

creators own IP
reporting is transparent
deliverables are understood
AI collapses bloated costs
platforms replace middlemen

This is the environment filmmakers are operating in now.

Neo Hollywood™ Is the Reality That Emerged

Neo Hollywood™ isn’t an idea.

It’s the condition filmmakers are working under today.

A landscape defined by:

deliverables over relationships
metadata over meetings
QC over connections
ownership over access

It runs on The Berserker Method™ — a patent-pending AI + business workflow designed for the post-studio era.

Not to disrupt Hollywood.

But to replace it.

This is the reality of filmmaking in Neo Hollywood™.

About the Author

I’m Krista Grotte Saxon, founder of Filmmaker Berserk, creator of Neo Hollywood™, and architect of The Berserker Method™.

I spent 24 years inside the industry — as an award-winning actress, producer, and financier — and later uncovered firsthand how the same accounting systems that collapsed Hollywood were used to drain independent films.

I didn’t predict the collapse.

I survived it — and built what comes after.