This story ran in Buffering, Vulture’s newsletter about the streaming industry. Head to vulture.com/buffering and subscribe today! The entertainment industry survived ’til ’25. Can it stay alive til ’29? Photo: Vulture; Photo: Nick Strasburg/HBO
As Hollywood’s post–Peak TV recession dragged on last year, people who worked in the business started using the phrase “survive ’til ’25” as gallows-humor shorthand for all the various woes that had befallen the industry — and a quasi prayer that things would get better in 2025. Four months into said year, there are a few slivers of hope, such as this weekend’s boffo box office for A Minecraft Movie and the fact that legacy companies are finally turning small profits in streaming. But overall, production is still way down, the vibes are awful, and on top of everything else, April has brought yet another reason for Tinseltown types to reach for their lorazepam: the Trump tariffs.
While some of the import taxes were scaled back on Wednesday just hours after they went into effect, the still-considerable tariffs that remain represent yet another massive fiscal headache for an entertainment industry still struggling to get back on its feet after years of setbacks. The reason: Even if the White House isn’t (yet) slapping tariffs on, say, projects filmed outside the U.S. or imposing fees on the use of British and Australian actors in American shows, Hollywood is still expecting to get hit by downstream impacts of the Trump tax hikes. Indeed, we’re already seeing some companies act.
Late Tuesday, Status scribe Oliver Darcy night broke the news that Warner Bros. Discovery had already sent a memo to a number of company officials ordering them to start throttling in response to “increased economic uncertainty” and “reduced consumer confidence.” On Wednesday, two sources confirmed Darcy’s reporting to Vulture, saying multiple WBD division leaders had now told their teams to halt any travel that’s not imperative, rein in overtime spending, and freeze nonessential expense-account spending. “So it’s ‘Don’t take any agents to lunch for now unless you really need to,’” one WBD staffer familiar with the messaging told me.
If fewer fancy lunches were the worst consequences of the Trump tariffs, nobody in Hollywood would really be sweating them. But while nobody knows exactly how bad things could get, the industry insiders we spoke to this week identified multiple ways the import taxes could cause trouble for the industry:
Advertisers Could Slash Billions in Hollywood Spending
Wednesday’s White House cave hardly removed the fear that the U.S. (and the world) could tip into a recession this year or in 2026. If that happens, media companies that rely on advertising — and that’s most of them — will be bracing for impact. “When there’s financial instability, the first thing that gets hit is marketing,” says one industry vet who’s lived this nightmare on multiple occasions. “And it’s a rolling impact. If your ad sales are impacted, then the whole company has to tighten their belt even more.” So how bad could the revenue loss be? In a note to clients just hours before Trump relented, Wall Street’s MoffettNathanson wrote that if there’s a recession or dramatically slower growth in 2025, “We estimate around $45 billion in lost U.S. ad spend versus current forecasts … with online advertising taking the largest hit (-$29 billion), followed by TV (-$12 billion.)” Companies especially reliant on linear TV networks and streaming advertising would suffer most with both Paramount and Roku seeing “mid- to-high single digit cuts” to ad income, per MoffettNathanson — which just last month had an optimistic outlook on Roku.
Production Costs Could Go Up, Up, Up
While Hollywood’s main export isn’t a product that’s directly subject to the Trump tax — at least not yet — tariffs make everything costlier. “Whether you’re in pharmaceuticals and have company cars, or you’re in the production business and have to build sets or move people around, it all gets more expensive,” says one TV-industry veteran. “And that starts adding up — maybe not right away, but it could be a long-term problem.” One studio exec echoes those fears and says there have already been internal conversations about what it could all mean. “We get lumber from Canada to build sets, so if the price of lumber goes up, we have to pay for that,” this suit said. “We don’t know the exact impact yet because we already have lumber in stock, but eventually, you have to think about it.” There could be similar price hikes for a slew of other things that go into making a show or movie: steel for sets, wardrobe for actors, specialized lights or microphones made overseas.
Our studio insider also worries about what will happen if the U.S. dollar continues to weaken, as it has in recent weeks. When production companies shoot outside the U.S. — as is now common in the era of global tax breaks — they’ll often pre-buy local currency at a favorable exchange rate in order to make sure their dollars go further, our studio exec says. But if there are wild swings in exchange rates or the dollar gets dramatically weaker, it will be much harder to mine economic advantage this way. And while nobody we talked to thought those lucrative tax incentives themselves are at risk, at least one TV exec said he has thought about the possibility that countries could find other ways to target Hollywood because of Trump’s trade war. As it is, governments in France and elsewhere already make Netflix and other U.S. platforms spend a certain amount of money on shows made by and primarily for those countries. “I can see all of this animosity toward the U.S. increasing the likelihood of greater local content spend requirements for streamers,” this exec said. (If it leads to more hits like Adolescence, though, maybe streamers won’t mind.)
Merch and Hardware Revenue Could Take a Hit
While it’s a relatively small part of their business, every entertainment company makes at least some money from goods covered under Trump’s tariff regime. The most obvious streaming-related products that could take a hit are the TV sets and standalone devices consumers use to stream movies and TV shows. Amazon has its Fire TV products (including Fire-branded TV sets), Apple makes the Apple TV box, and of course Roku began life as a manufacturer of cheap, easy-to-use streaming sticks and boxes. The cost of selling those devices in the U.S. will almost certainly go up, though by how much will depend on whether the product is made in China (where tariffs are currently set at 145 percent) or in, say, Vietnam, where Trump’s decision to cave means the tariff is set at “only” 10 percent. While it’s possible these companies will pass these costs on to consumers, it wouldn’t surprise me if they ate them. These devices are already priced artificially low, with little to no profit margin, because the real cash bonanza from them comes not from selling you a Roku stick but in selling advertising to companies when you stream something on the device or by collecting all sorts of data about what you watch and then selling that information to third parties. (You do know they do that, right?)
Meanwhile, companies that don’t make devices will still feel a pinch because they do license their intellectual property to all manner of clothing manufacturers, game designers, and a zillion other types of products. That cuddly Grogu doll you were thinking of getting your nephew for his birthday? Odds are it’s not made in the U.S. Nor is the $90 Stranger Things sherpa jacket made from material sourced from China, or the Succession-branded ATN News “We Here for You” hoodie HBO imports and sells on Amazon. “It’s not our main business, but it’s definitely a part of our business,” our studio insider said. “The supply chain for those things will definitely be impacted.”
The Streaming Platforms Might Actually Be … Okay?
If there’s a silver lining in Hollywood’s Trump-tariffs playbook, it’s that an economic downturn later this year might not result in streamers losing subscribers. You may think that consumers suddenly hurting for cash would look to cut costs, foregoing expenses that aren’t essential. Some folks obviously will trim their monthly entertainment spend, but if history is a guide, TV and streaming platforms may not take that big a hit — and could even see their subscriber numbers swell. If your monthly income shrinks, “You might decide you’re not going to go out to the movies and dinner as much anymore — but you’ll stay home and watch something on a streamer instead,” the industry vet argues.
Obviously someone who loses their job and is really hard up for cash will give serious thought to canceling or pausing subscriptions. But for the larger group of people who will just look to trim spending, “You’re probably going to be willing to pay for a streaming service over other kinds of entertainment,” this source explains. “We saw that during the 2008 housing crisis: People invest in home entertainment.” Indeed, in the last few years, while inflation reduced overall spending, most services added subscribers (after a few rocky quarters at the peak of inflation). That’s one reason why, even as it warned about the negative impact of a recession, the MoffettNathanson note this week was relatively bullish on Netflix: “We believe its growth outlook and the defensive nature of its subscription-based model make it more resilient than other media companies,” the analysts wrote. That doesn’t mean a deep recession will actually be some sort of unexpected boon for Netflix or other streaming services. While subscriber tallies might not collapse, and in some cases could even grow a bit faster, there will still be plenty of pain points for the industry, as outlined above.
So What’s the Endgame?
To be sure, the potential pitfalls presented here are all worst-case scenarios. If the U.S. economy somehow avoids the recession analysts believe is increasingly likely, things like the cutbacks in ad spending might not come to pass. And right now, investors certainly seem to be in the glass-half-full camp: Media companies all saw their stocks soar during Wednesday’s broader market rally with Roku shares up 16 percent and WBD up nearly 20 percent (though both closed down again, 7 and 13 percent, respectively, on Thursday).
But as anyone who’s paid even the slightest attention to domestic politics these last three months has figured out by now, the only certainty from Washington these days is … uncertainty. On Monday, one streaming exec I spoke to said he “wasn’t even thinking about tariffs” because “it all seems haphazard and likely to change.” (Fact check: true!) And on Tuesday, another industry insider told me that because of the Trump of it all, he thought it was way too soon for anyone to be panicking. “If this goes on for a week and nothing starts to move, then people might say, ‘Oh, fuck, this is going to be a long-term problem,’” he said. That, too, proved to be smart advice.
Unfortunately, the same caution also applies in reverse: Trump could change his mind again, or find some new way to crash the economy, and the relief so many felt Wednesday could disappear in a flash. And while the White House walked back the most radical version of the Trump tariffs scheme, it hasn’t removed the global 10 percent import tax, and the fees on Chinese-made products remain at unheard-of, almost comically high levels. Both remain a potential drag on Hollywood profits and contribute to the risk of a recession.
So while everyone in Hollywood who managed to survive ’til ’25 would desperately prefer to focus on reversing the entertainment industry’s yearslong slump, they instead find themselves worrying about a whole new set of challenges — incredibly uncertain about what comes next. As one frustrated media vet said of Trump’s tariff drama, “It’s really created such a cloud over everything.”