The War Between Silicon Valley and Hollywood is Officially Over...

And the tech bros won

Hollywood makes great war movies. Pick your favorite—Saving Private Ryan? Apocalypse Now? Maybe even Tropic Thunder? There are so many to choose from.

But forget about ‘em. That’s because Hollywood itself is now the battlefield. War stories fill the pages of Variety and The Hollywood Reporter. And they’re just as scary as any of those cinematic conflicts.

Hollywood is now fighting for its life. I recently warned that it will be a ghost town in five years. But by then, it might not even matter.

Hollywood Boulevard in the 1930s

Long before those five years are up, Hollywood will have been acquired by Silicon Valley. The tech bros might maintain some of the old landmarks—the Hollywood sign will still stand, and those stars on the boulevard won’t go away—but this will all be as hollow as a movie set.

The studio ecosystem will be dead.

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If you follow entertainment news, you might have noticed that Apple won 22 Emmy Awards a few days ago. Maybe you take that for granted, but it’s worth asking how a Cupertino company that makes tech devices figured out a way to do TV better than the TV companies.

But Apple is just one example. Netflix runs the biggest TV business of them all, and it’s another Northern California corporation that previously focused on tech, logistics, and distribution. There’s no reason to think it could dominate a creativity-driven business.

But it did just that. It learned how to do TV better than Hollywood.

Hollywood Boulevard’s Walk of Stars (Photo by Alen Ištoković)

Nowadays Netflix has two CEOs. One lives in Northern California and the other operates in Southern California. But there are no torn allegiances here. Netflix puts its faith in algorithms, metrics, and ginormous computers. Any resemblance to a creativity-driven Hollywood studio is merely superficial.

Just wait until they figure out how to replace cast and crew with bots. That’s already started. The next big movie star might just be Tilly Norwood—it’s a shame she doesn’t exist.

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I’ve warned about a war between Northern California and Southern California for at least the last decade. It’s easy to miss, because these people pretend to like each other. They even cooperate and do deals.

But make no mistake, these are adversaries and they are out for blood.

Silicon Valley believes in machines that make big decisions. But Hollywood was built on human creativity and cranky individual expression. These agendas cannot be reconciled and are now locked in mortal combat.

The war first started over copyrights. Silicon Valley hates copyrights—everything is just data and content to them. They want to use everything freely on their platforms. But Hollywood has worked hard, over many decades, to expand its copyright controls.

Those days are done. Hollywood’s last victory was in 1998. It lobbied Congress to pass the Sonny Bono Copyright Term Extension Act. Their films and IP would now be protected for a century or more.

Many in the industry joked that this was all done to protect an endangered rodent. Disney didn’t want Mickey Mouse to go into the public domain. They needed longer copyrights to keep their mouse in the house.

But 1998 is a long time ago. And there will be no more copyright extensions. Silicon Valley will make sure of it. It’s the ultimate mouse trap.

The recent battles over AI training data also make that clear. The huge tech platforms have simply ignored the law—assuming that they can get away with this by paying a few small fines.

They’re probably right.

But it’s more than just AI. The hatred of copyright runs deep in Silicon Valley. All of the major social media platforms are filled with video clips and images stolen from creators. You can scroll through them endlessly—movie scenes, snippets from TV series, sports highlights, etc.

Silicon Valley needs creativity, but hates to pay for it. So the war rages on.

But we are now entering the final stage of the war. Silicon Valley is now swallowing up Hollywood. The pace at which this is happening is frightening.

The main protagonist here is a man named David Ellison—a tech scion who wants to be the biggest mogul in the movie industry. A few days ago, his father Larry Ellison became (briefly) the richest man in the world.

Ellison is founder of Oracle, a database software company with a market cap of almost a trillion dollars. That’s nice work if you can get it. But his son David wanted to do something more fun than databases, so he dropped out of college to dabble in movies.

But this quickly became more than dabbling. He produced hit franchise films, notably the Mission Impossible movies. He didn’t care much about artsy cinema—and instead churned out Baywatch and Spy Kids. Like his dad, he knows how to make money.

And then he went on a spending spree. It’s not hard to do that in Hollywood if you have a big pile of cash. Many of the legendary properties from the past have fallen on hard times, and can be acquired from their current owners at a very reasonable price.

So David Ellison bought up National Amusements and merged it into his production company. This gave him control over

• Paramount Pictures

• CBS (and CBS News)

• MTV, Comedy Central, Nickelodeon, and other cable TV channels

• Paramount+ and Pluto TV streaming platforms

But now he is preparing a takeover of Warner Bros Discovery—which would put him in charge of

• Warner Bros film and television studios

• HBO

• CNN

• TNT

And it doesn’t stop there.

Oracle, the company founded by David Ellison’s father, will now be one of the new owners of TikTok. So in one generation, the Ellison family has gone from software entrepreneurs to the biggest powerhouse in film and media.

What’s next?

The most attractive remaining asset in Hollywood is Disney. It’s just a matter of time before it gets swallowed up by the techies. The most likely outcome is Apple acquiring Disney, but some other Silicon Valley powerhouse could also do this deal.

There’s so much money in NorCal, and a lot of techies would like to own their own famous mouse (along with theme parks and all the rest). Musk could do it. Zuckerberg could do it. Alphabet could do it. Even some company you don’t think much about, like Broadcom (market cap = $1.6 trillion), could easily finance this deal.

There’s heavy irony in this fact. That’s because Disney helped launch Silicon Valley.

There’s a garage on Addison Avenue in Palo Alto that’s called the birthplace of Silicon Valley. But that birthing only happened because Walt Disney gave Bill Hewlett and Dave Packard an order for eight audio oscillators—which gave them enough cash and confidence to create their garage-born company.

Hewlett-Packard trained the next generation of tech entrepreneurs, including Steve Wozniak, co-founder of Apple. So an Apple buyout of Disney would simply take things full circle.

There are still some chess pieces on the board, and a few moves left to be made—but the winner of this game is already obvious. Hollywood, or what’s left of it, will become a subsidiary of tech interests. I don’t see any other outcome.

Did this need to happen? Maybe in a better world, creativity would be more powerful than STEM rationalism. In that better world, imagination would overcome machines and algorithms. (Hey, they could make a movie about that.)

In that purer place, Hollywood would be stronger than Silicon Valley. La La Land triumphs over Severance. I’d buy a ticket to see it happen.

But we don’t live in that better world now. In our fallen state, everything is prey to cold profit-optimizing rationalists—even song and dance and storytelling.

We’re lucky that we still have some freedom to create our own indie and alternative platforms for artists. Maybe that better alternative won’t happen in Hollywood or Palo Alto, but it will happen nonetheless.

It’s wise to start preparing. Hollywood may turn into a cog in the big tech machine, but we will build elsewhere.

Let’s start now.