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The Old Model and Why It Worked
RD: Mark, you have spent decades at the centre of this development in senior leadership roles at NBCUniversal, Fandango, Rotten Tomatoes, and The Walt Disney Company. I wanted to start not with the disruption, but with what came before it because I think we can't understand what's been lost, or what's being built, without first understanding what actually worked.

MY: Setting some context first is key, because I think it's important to understand what we're actually talking about when we say the industry has transformed. It wasn't broken before. It worked exceptionally well for a long time.

Historically, legacy studios were built around a pretty coherent logic. They financed films; in many cases, they owned or worked through distributors, and they controlled access through theatres, cable bundles, and broadcast networks. And then they windowed. That's the keyword. Windowing was the whole mechanism: you take a piece of content and flow it from theatrical release to pay-per-view, to home entertainment, to linear TV, to syndication. Each window is another layer of monetization from the same asset. Success was measured around box office, ratings, syndication value. You could model it.

Studios could write big checks to actors with proven audiences because they had decades of regression analysis telling them what a theatrical release would ultimately be worth, what they called 'ultimates'. The whole ecosystem agents, lawyers, guilds, producers was built around that logic, and it worked.

In 2010, when Netflix appeared with original content and a distribution model that went direct to consumer via the internet globally, the streaming window didn't just open; it collapsed the other windows. And it didn't just collapse them; it rewired the entire monetization model. Now you have direct-to-consumer, subscription, advertising, global licensing that's a completely different architecture.

What Streaming Actually Changed
RD: What strikes me about this is that it very quickly became a data business, not just tracking revenue streams, but knowing who is watching what, for how many minutes, where they switch away to. That changes the nature of the business fundamentally.

MY: The thing is that this isn't just a technology shift. That's the easy story. What actually changed is how value is created and who captures it.

The thing is that this isn't just a technology shift. That's the easy story. What actually changed is how value is created and who captures it.

When content can be delivered over IP, you can go global much more easily than you ever could through satellite, cable, or terrestrial delivery. Netflix understood that earlier than most.

But what they really understood, and this is the piece that often gets missed, is that the platform is the business. Not the content. The platform.

What that means practically is that your success metrics are no longer about opening weekends or ratings points. They're about engagement, retention, customer lifetime value, and global reach. And underneath all of that is data. First-party data. Who is this consumer? What are they watching? Where do they drop off? What keeps them? That data drives your content decisions, your pricing, your packaging, your recommendations. You're building continuous engagement loops where short-form leads into long-form, where everything is optimized around the total consumer relationship, not around any individual title.

That creates a very different power dynamic. When the platform owns the customer relationship, they own the leverage. If you're an independent producer making horror films, or anime, or niche documentaries, you still need a large enough addressable audience to make the economics work. The platform takes their revenue share, and often they're the ones controlling the data about who's actually watching your content. So, the centre of gravity has moved from distribution to customer ownership. That's the shift.

The Cost Structure Problem
RD: And this is where the ambidexterity problem becomes so acute. I've seen this in other industries automotive, retail where you have the legacy business still generating cash over here, and the new world being built across the hall. But in Hollywood, the legacy side is collapsing so fast that the old power is simply going away. The mergers we're seeing Paramount, Warner they don't really make economic sense without the technology capability to go with them.

MY: That's exactly right, and it gets to where the real tension lives for legacy studios. They want to operate with the speed and flexibility of a tech company, but they're still carrying a cost structure built for a completely different world.

The traditional studio was organized around separate P&Ls: theatrical, television, home entertainment, licensing, streaming, all with their own incentive structures. That made sense when each one was a distinct business. It makes much less sense when you're trying to compete as a platform, where the goal is customer lifetime value across the entire relationship. You can't get to one customer view when your leadership is organized around siloed P&Ls protecting their own economics.

And then there's the re-platforming piece, which is expensive and disruptive in a way people don't fully appreciate. This isn't just moving things to the cloud. It means redesigning supply chains, rebuilding data architecture, integrating AI across workflows. And it requires talent that most studios don't have: AI engineers, platform architects, software developers. These are expensive people, and they come from environments that think very differently from traditional studio culture.

I saw this directly when I was at Fandango. Even though we were part of NBCUniversal, we always thought of ourselves as a software company. Out of roughly 650 employees, about 60 percent were engineers and product developers. Studios are not built that way. They never were. But the dominant players in entertainment today are fundamentally software businesses. The content moves through software. The customer relationship is managed through software. That's the new reality, and legacy studios are trying to get there while carrying the weight of the old architecture.

The dominant players in entertainment today are fundamentally software businesses. The content moves through software. The customer relationship is managed through software.

You also can't separate this from the incentive misalignment that runs through the whole ecosystem. The guilds, the talent agencies, they were traditionally compensated around a model of ultimates, projecting profitability of a theatrical release over a long horizon. That model doesn't map cleanly onto streaming, where the business is more fragmented. So, the incentives are out of alignment at multiple levels simultaneously, and that's genuinely hard to unwind.

Amazon Changed the Game More Than Netflix Did
People talk about Netflix as the disruptor. And it was Netflix that changed distribution. But I actually think Amazon changed the strategic game more deeply, because Amazon changed what competition even means.

When Amazon launched Prime Video, they were effectively giving away premium entertainment content as part of a value proposition built around shipping and commerce. Entertainment wasn't the primary business; it was an acquisition channel for their logistics business. That's a completely different posture from a company whose profitability depends directly on film and television.

Think about what that means for a legacy studio trying to protect its margins. You're in the entertainment business. Your margins depend on making that work. And now you've got a competitor who's in the logistics business and is treating your entire category as a loss leader.

That puts your economics under immediate pressure.

What it forced studios to ask is a much harder question than how to compete with streaming. It forced them to ask: who are we actually competing against? The answer is no longer Disney, Warner, Paramount. It includes Amazon, Apple, gaming platforms, social media platforms anyone competing for leisure time and discretionary wallet share.

I think about this as the time-and-attention business. That's really what the industry is. Consumers have a finite number of hours and a finite amount of wallet share to allocate to leisure. Whether they spend it watching a film, playing a game, scrolling TikTok, or on a platform that bundles entertainment into something else entirely, it all sits inside the same competitive frame. Once you see it that way, the landscape is much broader and harder to navigate than the old studio-versus-studio competition.

Short Form, Gaming, and the Attention Shift
RD: And those competitors TikTok, YouTube, Instagram, Roblox they're not peripheral, are they? They're eating into the core of where attention lives, particularly for younger audiences.

MY: Absolutely. And these are not peripheral categories. They are direct competitors for consumer attention, and in many cases, they're winning, because they align much more naturally with how younger audiences actually consume media.

Gen Z, Gen Alpha, millennials these groups over-index heavily on short-form video and gaming. Their habits weren't formed around theatrical release schedules or cable television. They expect immediacy, participation, agency. When you look at the hours in the day across those categories, you can see the share shift that's already happening. And by sheer population growth, as those segments grow relative to Gen X and Boomers, the legacy cash cows -traditional TV and theatrical - come under more and more pressure.

Gen Z, Gen Alpha, millennials these groups over-index heavily on short-form video and gaming. Their habits weren't formed around theatrical release schedules or cable television. They expect immediacy, participation, agency.

Can studios compete directly with TikTok or Instagram? Honestly, I think that's probably unrealistic. Those platforms are too deeply embedded in consumer behaviour. What you're more likely to see is studios licensing their short-form content into those ecosystems. We saw a version of this with Movieclips, owned by Fandango and NBCUniversal, which became a very effective discovery engine for long-form content on YouTube. By creating a wider funnel for discovery with short-form content, it becomes a feeder into broader monetization. Gaming is more complicated. Studios understand franchise storytelling, building worlds, recognizable characters, and narrative arcs across multiple releases. So there are obvious opportunities around properties like Harry Potter or major Marvel universes. But what often gets underestimated is how different the production model is. A theatrical release has a defined development cycle and monetizes through windows. A gaming platform is always on. The major game companies have entire live ops teams whose job it is to develop new features and functions 365 days a year to keep players engaged. Different technology, different talent, a very different tolerance for capital risk.

The truth is, a lot of legacy studios have found that building a successful film franchise and a successful gaming franchise may look similar from the outside, but internally they are very different businesses. My view is that most legacy studios will participate in gaming more indirectly through mobile and casual games, through licensing to the Epics and the Robloxes rather than trying to become full-scale gaming platform operators themselves.

The Next Inflection Point: Interactivity and Immersion
RD: The idea of interactive content has been around for a long time. I remember when the first Big Brother aired in Germany, and viewers voted candidates out by SMS at 50 cents a text. That was a genuine revenue stream. But I haven't really seen that interactivity take hold in mainstream streaming; lean-back [i.e. easy to watch, undemanding] still dominates. Is that about to change?

MY: Lean-back isn't going away. People will always want to sit back and watch a great story unfold that's not changing. What is changing is the expectation that content can also be entered, shaped, participated in. And you can already see it beginning. Roblox, for example, has a partnership with Universal Studios where users can go in and build their own Universal-themed worlds with licensed content, like the Minions. They're not just watching those characters. They're creating with them, extending those worlds through their own participation.

That creates a dual model. The film or series remains important, but the surrounding world becomes participatory. The story doesn't end when the credits roll. And for younger generations, this isn't a novelty it's an expectation. They've grown up in interactive environments. They want to influence the experience, not just consume it.

The story doesn't end when the credits roll. And for younger generations, this isn't a novelty it's an expectation. They've grown up in interactive environments. They want to influence the experience, not just consume it.

Does that mean studios should try to own those interactive platforms? My view is: no, it's too capital-intensive. The companies that own the platforms will capture the larger share of value. But it means studios have to design content differently from the ground up. Intellectual property has to be built to travel across screens, across platforms, across different forms of engagement. That's a different creative and business discipline than what most studios have practiced.

User-Generated Content and the Saturation Problem
RD: And then there's user-generated content, which is already a huge competitor for eyeballs, and now with generative AI available to every creator, the supply side is about to explode.

MY: That's exactly the issue I think gets underestimated. We've moved from cat videos on early YouTube to a creator economy with influencers generating real revenue. It's pyramid-like – hundreds of thousands of creators, but maybe two percent at the top making the majority of the money. That dynamic already competes with legacy studios for time and wallet share.

Now layer in generative AI as a tool available to every one of those creators. You're going to have an oversaturation of content, a massive long tail that most people aren't watching, but that still creates this oversupply. What does that do to the demand curve?

My belief is that narrative storytelling, whether short form or long form, will prevail. People who can genuinely build and hold an audience will win. But the traditional notion of 'premium content' as a protected category? I'm not sure that holds the way it used to. You can have non-premium content by the old definition, User Generated Content, creator-made that competes just as effectively for attention as something made with a $100 million production budget. That's a real disruption to how studios have always positioned their product.

My belief is that narrative storytelling whether short form or long form will prevail. People who can genuinely build and hold an audience will win.

What Happens to the Ecosystem?
RD: Hollywood isn't just studios. It's an entire ecosystem: agents, lawyers, guilds, below-the-line talent, independent producers. It's always operated without traditional organizational boundaries, held together by institutional players. What does this transformation do to all of them?

MY: The traditional model depended on studios sitting at the centre of gravity. If you wanted reach, financing, access to audiences, the studio was the hub. Talent flowed through that structure. Information asymmetry mattered. Agencies derived enormous value from knowing who was available, what projects were real, who was in the room.

Netflix challenged all of that quickly. They came in without long-standing talent relationships, but they had financial leverage. They wrote very large checks, gave major showrunners creative liberty, and offered global reach that studios couldn't match. That put a pin in what studios thought they controlled and showed that three things could flip the equation: cash incentives, global reach, and creative freedom.

And now you've got creators bypassing traditional intermediaries entirely. Taylor Swift is the obvious example from music; she built her own audience relationship, and that gave her the leverage to redefine the terms. I think you'll see that logic applied in film. Imagine a company like Blumhouse building a direct relationship with their horror audience through email, SMS, community engagement say, 500,000 people who've already said they want to see the next film. You can walk into an AMC or a Regal [cinema chains] and say: I can bring the demand/audience; let's re-examine what a fair value exchange is that's different than today's model. That negotiation looks very different from the traditional studio model.

It keeps coming back to the same principle: whoever controls the audience relationship controls the strategic leverage.

Leading Through a Structural Crisis
RD: So what does this mean for a leader who is sitting inside one of these studios today a head of development, a distribution chief, a studio head? What is their actual job right now?

MY: I want to be careful not to frame this as a story about studios failing to see the future. That's too easy, and it's not honest. The old model was highly effective for the conditions it served. I went through some great regimes in this industry and benefited from it. It was a genuinely exciting time to be in it. But the conditions that made that business work no longer exist in the same way.

What studios are dealing with now is not a bad cycle it's a structural crisis. They're managing that crisis in the present while trying to build a completely different future at the same time. That is an extraordinarily hard leadership challenge.

What it requires, first of all, is clarity about where you want to compete and where you can realistically win. Sony chose to stay out of the direct-to-consumer race and focus on licensing. Wall Street tends to reward that, because it's more predictable revenue, even if the upside is capped. Disney went the other direction and committed fully to streaming, which required years of investment before any path to profitability became realistic. Both are legitimate choices. The real danger is trying to operate in both worlds without strategic clarity, carrying the cost structure of one model while chasing the metrics of another.

The real danger is trying to operate in both worlds without strategic clarity carrying the cost structure of one model while chasing the metrics of another."

You also have to be honest about return on invested capital and what time horizons you can sustain. Netflix built its platform because the equity markets gave it patience. Not every studio has that luxury. So you have to look at your actual cost structure, your actual capabilities, and what returns you need to generate and when.

What I do believe is that the question 'what business are we actually in?' is the right place to start. Studios that can answer that honestly and then align their capital decisions, their talent, and their operating model around that answer will find a path through. That might mean becoming more specialized around licensing. It might mean diversifying across parks, gaming, streaming, and commerce. There's no single right answer. But there has to be coherence. You have to choose.

RD: And that question what business are we actually in, isn't unique to Hollywood.

MY: Not at all. What's happening here is, in many ways, a preview of what a lot of industries will face. The shift from product economics to platform economics. From controlled distribution to customer ownership. From stable categories to fluid ecosystems where you're competing for time and attention against businesses whose primary model has nothing to do with your category. In Hollywood, the pressure to answer those questions is no longer theoretical. It's immediate. But the questions themselves belong to every industry that's now facing the same reset.