Observed Signal · Oct 23, 2026 · Policy Update · Source: Cord Cutters News · Impact: 3/5 · Sentiment: Negative
Hollywood's Steep Decline Sparks Federal Tax Incentive Push
The U.S. television and motion picture industry has lost over 100,000 jobs since its late-2022 peak, a nearly 35% drop, according to IATSE and other unions. Below-the-line workers lost roughly 45 million employment hours per year compared to 2022. Streamers cut U.S. scripted commissions by 41% between 2022 and 2025, and the U.S. now accounts for only 34% of global film and 42% of TV production. In response, the newly formed American Entertainment Alliance—including CAA, WME, UTA, and independent producers like Blumhouse and Imagine Entertainment—supports the proposed Motion Picture, Television, and Entertainment Revitalization Act, which offers a 20% tax credit on U.S. labor costs for qualifying productions, potentially rising to 30% with bonuses. The Alliance also pushes for structural reforms, including requiring large streaming platforms to source half of their original content from independent U.S. producers, to address vertical integration and market concentration.
While not directly about adtech, the decline of Hollywood production and proposed legislation could impact advertising spend in TV and streaming, as well as the broader media ecosystem.
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Key Takeaways & Evidence Grounding
- U.S. TV and motion picture industry lost over 100,000 jobs since late-2022 peak, a nearly 35% drop.
- Streamers cut U.S. scripted commissions by 41% between 2022 and 2025.
- U.S. accounts for 34% of global film production and 42% of global TV production.
- Motion Picture, Television, and Entertainment Revitalization Act proposes 20% tax credit on U.S. labor costs, up to 30% with bonuses.
- American Entertainment Alliance includes CAA, WME, UTA, Blumhouse, and Imagine Entertainment.
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Related Market Signals & Shifts
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SAG‑AFTRA Strike Halted Productions, Reshaped Industry Labor
On July 14, 2023, SAG‑AFTRA began a strike against the Alliance of Motion Picture and Television Producers (AMPTP), joining the earlier Writers Guild of America (WGA) action and creating the first simultaneous actors/writers strike in over six decades. The 118‑day stoppage paused most scripted U.S. film and television production, caused widespread economic losses in Southern California, and forced networks and streaming services to shift schedules toward reruns and unscripted content. The tentative agreement reached November 9, 2023 and ratified in December 2023 included more than $1 billion in new compensation and benefits, strengthened streaming residuals, and pioneering protections for AI and digital replicas requiring consent and compensation. The strike’s effects continued into 2024 and beyond, compressing release calendars and influencing subsequent labor negotiations and production practices across the industry.
Paramount Skydance Exit Threatens LA Jobs, Taxes
Paramount Skydance has reportedly outlined a plan to leave California if the state does not resolve a lawsuit blocking its purchase of Warner Bros. Discovery. Such a departure would eliminate roughly 3,000 direct jobs concentrated in Los Angeles County, remove associated income, corporate, sales and property tax revenues, and reduce broader production spending that supports vendors and freelancers. The loss would weaken the Los Angeles entertainment ecosystem — which generates substantial regional economic output and employment — and could accelerate the shift of film and TV production to lower-cost states and countries.
Netflix cuts about 1,000 jobs amid slower growth
Netflix announced a workforce reduction of about 1,000 employees, roughly 6% of its staff, marking its largest job cut since 2022. The layoffs, confirmed to TechCrunch and communicated via an internal memo from co-CEOs Ted Sarandos and Greg Peters, are attributed to slower-than-expected growth and the need to control costs and prioritize resources. Affected departments include technology, product development, human resources, legal, film, and games, including staff at Next Games, a Finnish developer acquired in 2022. Top executives such as VP Film Doug Belgrad and director Sheroum Kim lost their positions. Despite the cuts, Netflix reported strong 2025 financials: $45.2 billion in revenue (up 16%) and net income of $11 billion (up 26%). The company maintains its 2026 forecast and expects revenue between $51 billion and $51.4 billion. Shares fell 1.3% following the announcement. Netflix has over 325 million subscriber households as of end of 2025. The Q3 earnings call is scheduled for October 20.
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