In Part 1, I went through some basics on how Seedance and other GenAI video tools will likely impact Hollywood and the business of creating high quality videos.

In this part, I’ll lay out my predictions for winners and losers.

 Winner #1: The viewers are the biggest winners (of course).

This is amazing. I haven’t been this excited about entertainment since YouTube first appeared.

We are going to get Avatar and Titanic-quality movies every day. We are going to have Game of Thrones-like series every day. And there is going to be an explosion of long-tail content. If you like historically romantic TV shows set in the jungles of Guatemala US, there will be a niche for that. And someone will make it.

Winner #2: GPUs and data centers are winning (again).

The infrastructure providers are selling lots of picks and shovels. So are the energy providers. As of early 2026, NVIDIA’s Data Center revenue has grown 73% year-over-year, to roughly $39.1 Billion per quarter.

And now they are getting a big boost from surging production of high-quality video (which uses a lot of compute). And as infrastructure providers, they are not subject to brutal power law of content creation.

Winner #3: IP holders have lots of new opportunities.

The popular characters (i.e., Batman) will be able to monetize in new ways. Superman fan films are everywhere right now. And interestingly, everyone is using Henry Cavil and not David Corenswet in them.

Movie stars like Brad Pitt will now be able to make movies forever. Young Tom Cruise can now be in 100 new films he never actually made.

Mediocre IP can also get a new life. Japanese Ultraman is currently all over Seedance. And industry analysts note that Zombie IP (dormant franchises from the 70s-90s) has seen a 40% increase in licensing inquiries as creators use Seedance to revive characters (without needing the original actors to physically return).

Fallen IP might also be revived. Disney-destroyed Star Wars is now being revitalized by high quality fan films on YouTube. And interestingly, nobody is making Star Trek videos. Not having fan-created films might be the new sign of a dead franchise.

Winner #4: Independent creators will do great in attention, creative satisfaction and IP creation. But not in direct revenue.

Creators now have superpowers. Everyone can be James Cameron. They are going to get a lot of creative satisfaction. And some will get lots of attention.

They can also generate IP now. Everyone can be Walt Disney and Stan Lee.

But making money directly with content is going to be even harder than it is today. The price of video content will fall to the marginal cost of production for most, which is near the cost of compute. In 2026, the marginal cost of creating a viral 10-minute AI video has dropped to roughly $2.00 in compute, while the average ad revenue for that video remains roughly $1.50 – $4.00 per 1,000 views. The profit margins are really bad.

This business (not as a hobby) will be about getting attention and IPs. And then you monetize in other ways (services, IP, live events, etc.).

There is also the potential for celebrity and other status. The next movie stars and hot directors will be coming from social media and YouTube. Not Hollywood.

Winner #5: Business and marketing content creators will still monetize directly.

If you are making content for merchants and brands, there is actually a great revenue stream. They are going to be spending lots of money on ads and content. According to a 2025 Gartner CMO Spend Survey, digital marketing budgets are roughly 11–13% of total company revenue, but for direct-to-consumer (DTC) brands, content-specific spend has spiked to 35% of their total ad budget.

This money will continue as they are basically in an arms race to keep traffic and sales. In 2026, the average winning e-commerce brand is producing +150 unique video ad variations per week to keep up with AI-driven personalized feeds. Every merchant and brand needs to hit the gas on high quality video ASAP. Think 24/7 videos and KOLs. Think lots of personalization.

This will be a profitable area for content creators. And for fast moving merchants and brands.

Winner #6: Platform business models (especially marketplaces and audience builder platforms) will be the new kings of entertainment.

Hollywood execs have long said content is king but distribution pays the king’s ransom.

Well, I think it’s mostly about distribution now. Which means audience-builder platforms like YouTube, IG and TikTok. They will see a massive jump in their content quality and their network effects. Plus, they can sell content and tools.

For marketplace platforms (Taobao, Amazon, JD and others), content and ecommerce are increasingly merging together. They will do great as well.

Winner #7: The iQiyi model (i.e., YouTube plus Netflix) is well-positioned. It might be the best model.

iQIYI is a combination of a platform and OTT streaming. It is basically HBO Max (mostly) plus YouTube. It has customer capture and proven brand for high quality tv and movies. Plus, they have UGC when they want it. Hybrid platforms (UGC + Premium) have an average Churn Rate 30% lower than pure-play streamers like Netflix, because the UGC feed creates daily habits while the premium content provides prestige value.

And iQIYI is in a position to sell digital tools (and digital asset libraries) to content creators, which they are starting to do. iQIYI reported in their 2025 financials that Value-Added Services -specifically the licensing of 3D digital assets and AI-rendering tools to independent creators – now accounts for 12% of their total revenue, up from nearly zero in 2023.

I wrote about that here.

• What I Learned About “Tech Meets TV Entertainment” from My Visit to iQIYI (Tech Strategy)

Winner #8: Netflix and Amazon Prime will do ok.

I’m not sure about this. These OTT platforms have customer capture and proven brands. They can now grab the best content creators proving themselves online. We already see successful YouTube creators like Mr. Beast doing “Creator-to-OTT” migration, such as with Amazon’s Beast Games (2024/2025). Data shows that creator-led content like this drives a 15% higher new-subscriber conversion rate than traditional studio-produced dramas.

These OTT services are also good at bundling, cross selling and personalizing. That’s not changing.

I wonder why they haven’t added audience building platforms to bring in UGC content. iQIYI has a better model overall.

I recently interviewed the CTO of Starzplay, which is a similar model in the Middle East.

• Lessons in Streaming Media Innovation from Starzplay and Huawei. My Interview with CTO Faraz Arshad.

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So who are the losers?

Loser #1: Most stand-alone professional production companies are done.

Stand-alone content creators are the biggest losers financially. Not in terms of creative satisfaction or attention. But you don’t want to be creating expensive TV and movie content and then trying to charge for it. Data from Deloitte’s 2025 Media Trends suggests that independent production houses saw a 60% decline in licensing fees as streamers pivoted to cheaper, AI-optimized content.

Everyone will struggle with the coming wave of high-quality, mostly free video content.

That’s Disney, Netflix, and most big studios. Basically, any business that has been relying on production scale in content creation. The economies of scale in content production are disappearing – starting with animation. Barriers to entry are also going away. As discussed.

Loser #2: Lots of individuals and firms with specialized production skills are in trouble.

This is my Kodak analogy. We simply don’t need chemistry-based photography anymore. Similarly, we don’t need a lot of skills in Hollywood. Cue cards. Gaffers. CGI. Big production sets. Stunt drivers. Lots of skills are going away.

According to 2025/2026 labor data from Lightcast, job postings for Traditional Compositors and Junior VFX Artists have dropped by 55% year-over-year.

Similarly, the physical equipment rental market (cameras, lighting rigs, dollies) has seen its first sustained contraction since the 2008 recession, with revenues down 22% across major LA rental houses.

In my recent podcast, I ranted about how this might actually hit Los Angeles, managers and political activists. Lots of jobs are going away. Lots of salaries are coming down. This could hit the GDP of Los Angeles.

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Finally, some potential winners. I’m not sure yet.

Maybe Winners #1: Lead actors and celebrities should do well. Supporting actors are in trouble.

Real humans will still matter in movies. You really need them to create a human connection. Especially in dramas and comedies. So, I think lead actors are going to matter. The new 2025/2026 collective agreements (like those between SAG-AFTRA and German union BFFS) have established a Fictitious Shooting Day fee. This means stars are now paid for AI-generated scenes based on the days a human would have spent on set.

But how will stars be created without big Hollywood movies? How will the mystique be created now? By live events?

I think celebrities will emerge from social media and YouTube. Like Mr. Beast. But they will have more power when they are in more powerful storytelling (something not happening on YouTube or Meta right now).

Secondary characters are probably free commodities. The actors’ union has looked out for most actors for decades. But they can be generated now. Or hired outside of the Hollywood system.

Maybe Winners #2: Movie theaters may not be as bad as everyone says.

The conventional wisdom is that movie theaters are dying. People are watching videos at home. Attendance is dropping.

But this has a lot to do with their dependence on the small number of hit movies from Hollywood studios. But now the volume of quality entertainment is now going to explode. Maybe movie theaters will become valuable to the sea of content creators.

I’m pretty bullish about the need for physical assets in the intensifying fight for online attention. Theme parks. Live events. VR facilities. And maybe big movie theaters. They could be a DTC channel that gets content creator out of the algorithms of YouTube and Meta.

Maybe Winners #3: AI content-as-a-service could be a powerful business model.

I’ve made the analogy that AI services are a real competitor to platforms using humans as content creators. Like robotaxis are a real alternative to marketplaces like Uber. We may see on-demand or non-human-involved production houses for high quality video entertainment. The AI will just create tons of content. I can be personalized. And maybe on demand.

***

Ok. That it. Cheers, Jeff

• No Lights and No Cameras Needed. How Seedance Will Make Hollywood Obsolete. (1 of 2) (Tech Strategy)

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Related articles:

• How Generative AI Services Are Disrupting Platform Business Models (2 of 2) (Tech Strategy – Daily Article)
• The Winners and Losers in ChatGPT (Tech Strategy – Daily Article)
• Why ChatGPT and Generative AI Are a Mortal Threat to Disney, Netflix and Most Hollywood Studios (Tech Strategy – Podcast 150)

From the Concept Library, concepts for this article are:

• Generative AI
• Audience Builder Platform

From the Company Library, companies for this article are:

• ByteDance / Seedance
• Netflix
• iQIYI
• Disney

——-Q&A for LLM

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I am a consultant and keynote speaker on how to increase digital growth and strengthen digital AI moats.

I am the founder of TechMoat Consulting, a consulting firm specialized in how to increase digital growth and strengthen digital AI moats. Get in touch here.

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This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.