Business insiders know the story all too effectively.
Over the previous few years, as Hollywood restructured to fulfill the demand for streaming leisure and main corporations noticed match to merge, the leisure business minimize budgets, minimize jobs and, in some instances, outsourced its work abroad. This painful second of contraction coincided with advances in generative AI like the discharge of ChatGPT in 2022, the identical yr that Netflix and the remainder of Hollywood started altering their streaming fashions to deal with profitability.
However generative AI should not be blamed for the current devastating decline in California’s inventive workforce, says the most recent report from Los Angeles-based Otis School of Artwork and Design, which yearly produces analysis encompassing the state’s movie, vogue, gaming, media, promoting, arts and structure industries.
“The sample of job loss by way of what sorts of jobs are misplaced and when they’re misplaced doesn’t help the truth that there was this displacement of employees by AI,” says co-author of this yr’s analysis, Patrick Adler, founding companion of Westwood Economics and Planning Consultants. “What we’re seeing is that AI has, within the inventive financial system, radically modified the way in which work will get achieved.”
The Hollywood Reporter seen the 2026 report, titled “Inventive Disruption: AI and California’s Inventive Economic system: 2022-2025,” forward of its April 7 launch. The analysis was developed by the Otis School of Artwork and Design in partnership with Westwood Economics and Planning Consultants. Along with Adler, Taner Osman co-authored the report, which used public information to provide quantitative analyzes and interviews with inventive professionals to provide qualitative assessments.
Between 2022 and 2025, California’s inventive financial system misplaced 14% of its jobs, or 114,000 positions. Based on the report, these losses have been concentrated in two sectors particularly: movie, tv and sound (which noticed a drop of virtually 30 % in employment throughout this era) and conventional media (with a drop of virtually 34 %).
Courtesy of Otis School of Artwork and Design
However, the authors be aware, the roles most uncovered to AI within the state’s inventive financial system — these of writers, software program builders and artists — have elevated in quantity relatively than decreased. Job presents for these professions have additionally been revealed.
Moderately than AI, “the reply [for this job loss] lies in a mixture of displacement of lower-paying positions and structural adjustments throughout the inventive sectors which have hit California more durable than the remainder of the nation,” the report stated. Whereas folks in lower-paying jobs have left California primarily because of the excessive value of dwelling, the state has additionally been hit exhausting by price range cuts that adopted the period of “Peak TV” in Hollywood.
Courtesy of Otis School of Artwork and Design
The excellent news for Hollywood employees is that to this point, the usage of generative AI within the inventive industries seems to be changing particular duties relatively than staff. After conducting interviews with employees in California’s inventive industries, the authors report that “no respondent described AI as having changed a whole function or workflow.” They add: “When AI is used, it’s deployed for well-defined actions the place the result’s verifiable, the time financial savings are evident and the standard of the end result meets expectations. »
One instance used within the report is movie and tv post-production, the place AI can carry out rotoscoping or wire removing however struggles with inventive duties. Moreover, verifying AI outcomes creates extra work for people. One visible results firm proprietor cited within the report describes the usage of AI in a significant tv manufacturing as follows: “They’ve 15 artists sitting at workstations fixing the AI… While you multiply the artist price by 15 and evaluate it to the price of the work you are doing, it negates any financial savings that AI offers you. »
Courtesy of Otis School of Artwork and Design
The report additionally asserts that inventive employees have important company in figuring out the extent to which generative AI is used of their discipline. Though they might comply with pointers or guidelines set by supervisors, it’s normally the employees who use AI straight. “A employee who believes within the know-how will iterate patiently; a skeptic could conclude that AI will not be but able to performing a specific process. Each viewpoints have been current amongst these surveyed,” the authors write. The authors discover that many employees have been involved concerning the ethics of utilizing AI, whereas some even hid their use of AI, fearing it will label them as expendable.
Though the examine finds that AI will not be changing inventive financial system employees within the state, it says the know-how is already altering the character of inventive work. Respondents stated know-how was elevating expectations for productiveness, managers have been investing in AI instruments relatively than human collaborators, they usually have been dealing with strain to provide decrease high quality work.
A Movement inventive director cited within the report remembers an illustrative second he skilled at work: “The inventive director stated, ‘Sooner or later you simply should say it is adequate,’ which I believe is the most important hazard of AI. We’re decreasing our requirements.”
The authors advocate that inventive organizations reply to this grassroots skepticism and uncertainty about AI by not speeding the implementation of AI instruments and combating the stigmatization of their staff with regards to utilizing the know-how by implementing insurance policies comparable to freezing layoffs. The authors clarify: “Employees who know they won’t stroll away from their jobs will experiment extra overtly, share their concepts extra freely, and make investments real effort into making AI instruments work. »
In different phrases, Adler says, “there’s some fairly robust proof that we’re discovering that adoption of AI could be a lot sooner and far deeper if inventive employees trusted it extra.” »