A grim report from Hollywood: 'People are having a hard time here.'

• Hollywood looks great from the outside.
• On the ground, things are less attractive: The industry is contracting, and is about to get smaller.
• Ankler CEO Janice Min dishes on the WBD/Paramount/Netflix battle, the state of AI in the movies, and more.

Hollywood is in trouble.

The streaming boom that fueled a ton of production in the last decade-plus is gone, and lots of the remaining work is going overseas. No one really knows how AI will affect the movie and TV business, but there's lots of fear it won't be good. And barring something truly surprising, Warner Bros., one of Hollywood's most important movie and TV studios, is going to get swallowed up in the next year or so, which will mean even more consolidation.

But don't take it from me: Ask Janice Min, who has spent a couple decades enmeshed in Hollywood. First as the editor of the Hollywood Reporter, and now as CEO of The Ankler, an industry trade built for the Substack Age.

That means she's not a disinterested observer at all: If the center of the movie and TV industry is shrinking, that's bad news for the advertising, subscriptions, and events businesses she's trying to build.

I talked to Min about all of that on my Channels podcast, and you can listen to the whole thing here. The following is an edited excerpt of our conversation.

Peter Kafka: If you had to bet right now, who wins the newly reopened bidding war for Warner Bros. Discovery?

Janice Min: Doesn't it really depend if Netflix decides they're going to step it up? So far, it seems like they will. But Netflix is a pretty ruthless company: Season two isn't working out, it's not driving as many subscribers as season one, your show is canceled. Or cofounder Reed Hastings' famous "keeper test": You aren't performing well. You're out.

And shareholders are not loving this pursuit of Warner Bros. At some point, they will cut it off. They're a very pragmatic company.

The conventional wisdom is that Netflix would really like this deal, and that Paramount has to have this deal. Do you agree?

I do. If you're David Ellison and you've assembled probably the most expensive leadership team in history, you are prepping to have Warner Bros. David Ellison was not prepping to have the seventh-biggest studio or the seventh-biggest streamer.

In the end, if he doesn't have that, you're kind of left holding the bag that nobody wanted. How do you win?

You are holding the thing that Shari Redstone was desperately trying to get rid of.

That's important context. This battle is so interesting to me because Warner Bros. is such a stinker, with so much debt, that they are being forced to sell. They had no other outcome. Paramount was such a stinker that Shari Redstone couldn't get the stink off of her fast enough. And there was basically, in the end, one bidder [for Paramount].

That one bidder is now one of two bidders for the other thing. We get caught up in the excitement that these are huge prizes, but they're just these debt-stuffed, slow-moving beasts that need to have someone who has an emotional attachment to them for them to make sense as a buyer.

After Netflix won the first bidding round in December, there was an immediate negative reaction from Hollywood. What's the current vibe when it comes to Netflix vs. Paramount as WBD's future owner?

I think for most people it's Sophie's Choice. There are two potential bad outcomes here.

On the plus side for David Ellison: People love that he loves movies.

"I love movies. You guys make movies. I'm gonna make more movies. You should work with me."

It's not a sophisticated business argument, but everyone here has dollar signs spinning in their eyes, everyone's looking for the next deal for themselves. So they like that. Perhaps David Ellison will pay and maybe even overpay for what you are making. And it's exciting that it'll create a big buyer in the market.

The flip side of that is, Hollywood is not a particularly pro-Trump industry. I don't think they like a lot of the things they are seeing happening at Paramount right now, like the situation that happened with Stephen Colbert and James Talarico. They certainly don't like what's happening with CBS News.

Fundamentally, though, it does come down to your bottom line. The industry is struggling. People are having a hard time having the careers they had 10 years ago. So people like the idea of a buyer with deep pockets, even if it's daddy's money.

There is a steady stream of stories and social media posts about how AI is going to disrupt Hollywood. How much of that concern do you see reflected in day-to-day conversations?

The thing with AI right now in Hollywood: Everyone's lying just a little bit. Studios are lying about how much they're using it.

They're using it more or less?

Using it more.

Companies are lying about the capability of their products. And for creative people, they're lying about the fact that they're not using it. I dare you to find a screenwriter who is staring at a blank page and not talking to Claude or ChatGPT at the same time.

It seems clear that it's going to be a big deal for people working in visual effects, and that was already a challenged industry.

I have a friend who's been sending me LinkedIn posts that are showing up in his feed, and it is so grim. It's people largely who have worked in VFX, and they are posting this full-on bleed out, like "I will be homeless by next Thursday if I don't have work."

It doesn't appear they're being hyperbolic.

I guarantee that every single studio, every single streamer, they are all completely doing this. During last year's Oscar race, [there was a controversy about] "The Brutalist," and how Adrian Brody's voice was made more Hungarian-accented through technology.

This year, it is crickets. Even the Academy, the most precious, legacy-protecting institution in Hollywood, has not come out in a really firm way about AI. They basically have a don't ask, don't tell policy. I would say with some certainty that every single best picture nominee this year has used AI in its production process.

What's the story people outside Hollywood are missing about your industry right now?

You look at LA and you think it's sunny and amazing and people are happy. People are having a hard time here. The unemployment rate of Los Angeles is much higher than the national average.

You're seeing a city that is so big and sprawling, with a kind of rudderless feeling: Who's going to stop this? There is definitely a Detroit vibe underway if things don't course correct.

And you're seeing a paralysis: Hollywood used to be a place that had a lot of protests, spoke out, was always fighting the so-called man. And it is pretty much crickets now, because everyone is scared.

I was struck by the fact when you saw the Grammys, you have these musicians getting up on stage, — Billie Eilish, Bad Bunny — and really sticking it to the president and ICE. And you compare that with the Golden Globes, where it was sponsored by Polymarket, and no one's saying anything.

When you think about how to capture young people, who are the pipeline for everything — they love this culture of rebellion and revolt and speaking out. I worry about Hollywood containing itself so much to the point that it stops speaking to the audience.