GUEST: 'The State of the Movies, 2025' by Howie Klausner

To say the movie business— well, really, the entire entertainment business ecosystem— is in a time of transition, is kind of like saying “it’s getting a little breezy”, as Hurricane Katrina makes landfall.

It is not an exaggeration to say we are in the middle of a tectonic event in this hundred-year-old industry that dominates more of our lives than most of us would care to admit, many are calling this the beginning of the end of the theatrical movie.

And please do know, as I explore the state of things and ponder where and how we got here and go from here, the immortal words of legendary screenwriter and author William Goldman echo in my head, from his book Adventures in the Screen Trade which was pretty much required reading for all film creatives in the 80s and 90s…
            “Nobody. Knows. Anything.”
If you read the book, which is a glorious, movie-by-movie account of Goldman’s career in the now pretty much gone Hollywood Studio System (at least what it was then), you can see he’s absolutely right. Still, even in the midst of Katrina, somebody had to try and track that storm, rescue whoever he could, triage the wounded, make sense of the chaos, and just survive the damn thing, to live and fight another day.

And in that spirit, I offer up my State of Things Hollywood ’25, hoping you’ll ignore that “nobody knows anything” thing as we get about making sense of the movie business upheaval together, and find a path forward.

First Question. What’s going on out there? Let’s take a stroll through this chaos we know as “Hollywood”, and see what we see.
  “Netflix is the movie business now,” an agent who wishes to remain anonymous tells me.
 
Oh we could do this all day in this brave new media world. I haven’t even touched streaming series over broadcast, YouTube, Tik-Tok and Instagram content, and people trusting Joe Rogan exponentially more than the “legacy news media”— his numbers are breathtaking, while theirs are in freefall.

Yeah. We’re in a hurricane all right. The next question in a time like this is… How did this happen?
 
I have my own perspective, working in this industry for a long time. I was film school educated in the 80s, worked production for a while, sold a big feature to Warner Brothers and had a good run as a studio screenwriter in the 90s. Then I moved to my native Southern US in the early 2000s to set up shop as an independent writer and producer. I’m still in the trenches in both Hollywood and out here in Indy Country, and you may believe me when I tell you the movie business I came in on bears little resemblance to the industry of today.

There’s a great scene in the movie, The Right Stuff (1983), when astronaut John Glenn, played by the great Ed Harris faces his own perfect storm orbiting the earth at thousands of miles per hour; his heat shield has come loose, and if it comes off as he attempts re-entry into Earth’s atmosphere, he will burn up and die. There’s little, if anything he can do about it, so the Mission Control guys don’t want to tell him.

But John’s fellow astronaut on the ground Alan Shepherd, played by the great Scott Glenn wheels on the flight controllers, snapping, “He’s a pilot, dammit. He needs to know the condition of his craft."

Well, we’re all pilots, dammit. And we also need to know the condition of our craft. We need to understand what brought about this Perfect Storm in the first place, so we can do what we gotta do, and bring this bird in for a good landing without burning up.

Let’s look at some of these storm specifics. 
 
I. TECHNOLOGY -
 
            The same thing that happened to the music business with Napster and iTunes has happened to the movie and television business with streaming.
            For music, technology took the $20 CD away. The entire business was built on that unit.
            For the movies, streaming was the Disruptor.
            The Internet and the revolution in home entertainment technology like High-Definition big screens and Dolby 5.1 sound created a darn near parallel movie-viewing experience to the theater— without the sticky floors and strangers talking too loud on their phone, 30 minutes of previews and the 20 dollar popcorn and $10 coke—
            We can now watch a movie we love from a choice of thousands of titles. The whole family, in our jammies if we want, right there at home, from a wire coming out of the wall— for $7.99!
            Even the home-builders piled onto this one— no self-respecting new home ignores a media room!
            Netflix saw this early on, and switched over from a mail-order DVD rental business to a digital delivery model. People went crazy for it, the company was printing money suddenly, and spending it like the proverbial buzzed sailor, buying up and developing features, and series.
            The major studios, networks and cable companies chuckled smugly at their folly, not really grasping that this “little upstart streamer” could produce and release their “originals” faster and cheaper to an audience of millions paying a monthly subscription fee to cover all their costs and then some, not even bothering with the traditional theatrical distribution chains or broadcast limitations.
            And they woke up one morning to realize: Netflix was the biggest studio in town. Making more movies, series, and money than all of them combined. Apple, Amazon, Hulu and others jumped on that bandwagon too, as the Big 5 studios could only stand back and watch.
            Oh and that little AI Disruptor…? That’s another subject altogether, it’s the off the Richter Scale aftershock to mix metaphors with our hurricane. It ain’t going away, and it is already bringing another huge wave of change. Technology always brings initial pain and chaos, but it also brings opportunity. And ultimately makes the whole thing better— for everybody.
 
II. COVID - 
 
            Oh boy, anybody else just plain shudder when they see that word? Masks, lockdowns, social distancing, closed theaters for months and the fear of actually gathering in a room of 300 people breathing the same air as you?
            It was a nightmare, and a near-death blow to the theatrical movie business. Hundreds of theaters went under in the aftermath of that awful chapter. Theaters have gradually clawed their way back, but they’re nowhere near their pre-2020 numbers.
            At the same time, the stay-at-home era brought a customer windfall the streaming business couldn’t have imagined in the wildest of their dreams. They weren’t just lucky in the timing of it all, they were ready for the crisis, and they delivered. They purchased and produced content like crazy in that timeframe, and ran the table in Hollywood.
            The big studios haven’t even come close to catching up. And they may not. Ever.
 
III. THE COST OF CALIFORNIA -
 
            I’ll limit this essay to producing media, and bypass entirely the cost of living in the Golden State (Hmmmm. I think I just figured out why they call it that).
            But quite honestly, California, more specifically Los Angeles, the epicenter of the world’s media industrial complex, has seemed not only unwilling to properly incentivize the industry that put it on the world map and brought it untold wealth and innovation, it’s actually punished that industry with cost and red tape and taxes and difficulty that make it almost fiscally irresponsible to make a movie or show there anymore.
            Rob Lowe, producing a game show on an LA studio lot blew everybody’s mind with this reality on a recent podcast, revealing it would be cheaper to fly his entire operation over to Ireland and produce it there, instead of the soundstage 100 yards from his office.
            Guess what they did? Moved the show to Ireland.
            Oh this is not news to those of us out here in Indy land. The last four movies I have written and/or produced have come out of Oklahoma, Texas, Louisiana and Tennessee. It is on average 30% cheaper to do it in Flyover Country, a whole lot easier and business friendly, and now after twenty years of this “runaway production”, the infrastructure has been largely built. The local crew bases and facilities now rival the best of LA and New York.
            And we haven’t even mentioned Canada, Eastern Europe, and the UK. This runaway production has been going on for decades, because it’s just cheaper and easier to do it in places where they actually incentivize producers to come make their show there.
            I’m thinking the Golden State should take a long, hard look at this soon, before it’s too late.
 
IV. CULTURE -
 
            It’s probably no secret that we are living in pretty fractious times. The country is very much split between Red and Blue, and it should be no secret with which color Hollywood paints itself. It is, and always has been deep blue. 
            Now before you think I’m about to go political or take a side here, recall one of the greatest television personalities of all times, Johnny Carson, who hosted The Tonight Show for thirty years. When Johnny retired in 1992, he was asked what he was most proud of.
            “That no-one ever knew how I voted,” he famously answered.
            And it was true. He very appropriately skewered both sides of the aisle mercilessly and hysterically— as a real comedian should— in his legendary monologues. But he was never mean, hateful or cheap. And when any political figure, D or R, was able to land that most coveted guest chair next to Johnny, he never, ever failed to treat them with dignity, respect, and just plain kindness.
            I will take a position now. Oh, how I long for that again.
            Hollywood has changed. And not for the better, when it comes to the dignity, respect and kindness thing, especially when it comes to our political differences and ongoing culture war. Not surprisingly, it has spilled over into the content it regularly produces, and not to over-personalize this, even the artists it employs (and doesn’t employ).
            Cancel Culture is a thing.
            But casting aside yours or my personal opinions towards some of these red-hot issues that divide us more and more every year, much of what passes for mass market entertainment is actually agenda-laden stuff that alienates, embarrasses and even insults half its paying customers, many of whom have just plain decided not to be a paying customer anymore.
            And that’s just bad business.
 
BACK TO THE FUTURE?…
 
This Perfect Storm the movie business is battling has a hauntingly similar parallel in history; when about 75 years ago, a brand new technology— Television— arrived full force in America. Overnight, it was Sky-is-Falling Crisis Mode in the feature business as many predicted the “end of the movie theater”, and maybe even movies themselves, as millions plugged in their new black and white sets in the comfort of their own home, and watched shows for free— brought to them by Texaco, General Electric and Camel Cigarettes.

Why bother going to the theater for 50 cents, plus another .50 for popcorn and a coke, when I can get my entertainment at home for free?

But as the storm subsided into the New Normal, Hollywood got smart. And they got busy. They answered that new technology with an innovation of their own: color.
Then they went big and bright and sharp with Cinerama, CinemaScope, VistaVision, Todd-AO.

Sound was next: Stereophonic in the theaters now, then Surround Sound, then Dolby. TV couldn’t touch an experience like that in wide-screen. (We don’t talk about Smell-a-vision much, but they did give it a try.)

But the smartest move of all?… They made their movies better. Which soon thereafter, ushered in a Golden Age for Hollywood, a new era of prosperity and the making of the greatest movies of all time. Set-up, Conflict, Resolution. Perfect 3-Act structure. And a perfect Hollywood ending.
 
But here we are. So the final Question before us…Can we do it again? Can Hollywood pull off a sequel?

I think we can. But we gotta get our head out the sand, pretending nothing’s changed, and just hoping things will all settle down into the way they used to be. They won’t. Our heat shield’s loose, folks, we need to accept that change has indeed come upon our flight, then figure out the condition of our craft and adjust course accordingly.
           
So with all that in mind, I offer my own suggestions for a happy, prosperous landing for this bird. And I call on some of the greatest movie dialogue of all time to help guide us back in.
   
Storms come, storms go. And you know the old saying; it’s not what happens to you, it’s what you do with it. How we respond to storms and change, and even a culture war, defines who we are, and if we pay attention and learn from these storms, they make us better.

Truth is, in spite of all the badmouthing and doom and gloom predictions, like America, Hollywood is the Gold Standard of the world. We invented the movies, and nobody, but nobody makes ‘em better, when we are at our best.

No, the movie theater is not dead. And neither is the movie. And this Perfect Storm is passing. My “brilliant” suggestions are nothing more than common sense reminders of what we already know. It could very well be, we are actually at the dawn of a New Golden Age for the movies. 

By the way, in The Right Stuff and in real life, John Glenn and his friends in Mission Control went back to their training, adjusted course, and did what they had to do. John made it back to Earth just fine. And NASA put human beings on the Moon 7 years later.

And in that spirit, I close with a wish and a charge to us all, from that other great Movie Astronaut, Buzz Lightyear from Toy Story 1995…
            'To Infinity… and Beyond!'
 
Howie Klausner Ep244 is a writer-producer, founder and president of I-40 Studios in Franklin, TN.

Editorial comments expressed in this column are the sole opinion of the writer.