Hollywood Studio Developers Explore Alternative Revenue Sources Amid Production Slowdown

Hollywood studio developers are shifting their strategies as the entertainment industry grapples with a slowdown in film and television production. Faced with underused studio space and evolving market dynamics, developers are actively exploring new ways to generate revenue and keep their properties viable.

The industry-wide slowdown—driven by factors such as prolonged labor disputes, budget cuts at major streaming platforms, and shifting consumer preferences—has significantly reduced the demand for traditional soundstage and studio facilities. In response, developers are rethinking how studio properties can serve a broader range of uses.

One major tactic under consideration is the adaptive reuse of studio infrastructure. Developers are looking at converting underutilized production space into venues for events, commercial office space, or even residential units, depending on zoning and market demand. The goal is to optimize asset performance in a landscape where entertainment production is no longer guaranteed to be the primary income source.

In addition, developers are examining the potential for leveraging tax credits and local incentive programs, especially in jurisdictions like Los Angeles where redevelopment and innovation are often supported at the municipal level. These financial tools could help offset operating costs and fund property upgrades needed for new uses.

Some developers are also exploring strategic partnerships with tech firms, content creators, and experiential brands to bring in a new wave of tenants and uses. As immersive media and virtual production continue to rise, studio spaces may be transformed into hybrid environments that blend physical production with digital innovation.

This strategic pivot reflects a broader transformation in the entertainment and commercial real estate sectors, where flexibility and diversification are increasingly seen as key to long-term resilience.

Source:

• “Hollywood Studio Developers Consider New Revenue Options.” The Real Deal, June 4, 2025