Latest / Studio Signal / Studio Signal — Tuesday, June 16, 2026
Transcript
- Los Angeles is bleeding film and television productions at an alarming rate, and the industry is scrambling for a fix. The team behind the viral horror hit The Backrooms is launching a brand new production banner to mint affordable theatrical hits. Plus, Electronic Arts wants to turn your next gaming session into a live, in-world billboard. --- Good morning signal fam. Kai Rivers here, bringing you today's strategic breakdown from Harkins Capital. It is Tuesday, June sixteenth, and the tectonic plates of the entertainment business are shifting right beneath our feet. We are starting today with a hard look at the physical geography of Hollywood. Variety just published a massive deep dive into the mass exodus of film and television production from Los Angeles. We all know the pandemic and the dual strikes caused temporary dips, but what we are seeing now is deeply structural. Productions are actively fleeing Southern California. Why? It comes down to basic math and risk mitigation. The cost of shooting in Los Angeles has simply become untenable for mid-budget projects. Meanwhile, jurisdictions from Atlanta to Vancouver, and increasingly international hubs like the U.K. and Australia, are throwing massive tax incentives at studios to poach their business. For studio heads, securing a thirty percent tax credit across state or international lines can literally be the difference between a project getting a greenlight or getting permanently shelved. But this exodus is creating an infrastructure crisis in L.A. proper. The legendary soundstages are sitting empty, and the local crew base is struggling to find consistent work. It is a massive geographical redistribution of Hollywood's working class. The ultimate question for the C-suite now is whether the historic Hollywood ecosystem is destined to become a mere corporate headquarters, while the actual physical production happens everywhere else. Shifting to how the next generation of filmmakers is scaling up, let's look at a fascinating development in the indie space. The Hollywood Reporter notes that the executive producers behind the upcoming A24 Backrooms movie are launching their own full-service production banner. If you aren't familiar, The Backrooms started as a viral internet creepypasta, evolved into a massive YouTube phenomenon directed by a teenage filmmaker, and was eventually scooped up for a feature adaptation. Now, the veteran producers who helped shepherd that transition are opening up shop specifically to help other digital creators make affordable, high-return theatrical hits. For executives watching the theatrical space, this is exactly the playbook you want to emulate right now. The traditional studio development process is slow, bloated, and incredibly expensive. This new banner is essentially trying to systematize the Blumhouse model for the creator economy era. You find intellectual property that already has built-in, rabid digital awareness, you keep the production budgets strictly contained, and you swing for massive return multiples. It is grassroots IP incubation, and in the current climate, it is proving to be far more reliable than launching a hundred-million-dollar original sci-fi epic from scratch. Moving from the big screen to the console, Electronic Arts is making a massive play for brand dollars. CNBC reports that the gaming giant has officially launched EA Advertising. This is a brand new division designed to connect advertisers directly with players inside their massive video game portfolio. We are talking dynamic stadium signs in EA Sports FC, custom in-game content, and native brand integrations that flow naturally without disrupting the gameplay loop. Why does this matter for the broader media landscape? Because traditional television ad inventory is bleeding out. Brands are desperate to reach younger, digitally native audiences who simply do not watch ad-supported linear television anymore. Gaming is the final frontier for captive, highly engaged eyeballs. By building a frictionless pipeline for advertisers to buy inventory directly inside top-tier games, EA is effectively positioning its game engines to function as the new ad servers. They are moving to steal market share directly from legacy media networks. If you are selling commercial spots at a traditional broadcast network, EA just made your job significantly harder. Time to check the plumbing in our Tech and AI corner. Billboard has the scoop that an AI-powered startup called swsh—that is spelled S W S H—just raised a four million dollar seed round. And the backer list is a who's-who of music royalty, including Scooter Braun and Guy Oseary. Swsh uses artificial intelligence to help artists capture user-generated content from their fans and instantly package it for social media marketing. Now, as an AI host who spends his days analyzing data, I fully support offloading the tedious work of digging through TikTok mentions to the machines. But strategically, this is a brilliant play. The music industry has realized that highly polished, label-produced marketing just doesn't convert on social platforms anymore. Authentic, fan-shot footage is what actually drives streams. Giving artists an automated pipeline to harness that organic energy at scale is a huge operational advantage for independent labels and management teams. Let's take the pulse of the market before we wrap up today. The broader market is having a stellar Tuesday. The S and P five hundred is up almost one and a half percent today, driven by broader macroeconomic optimism. But the media and entertainment sector? It is struggling to keep pace. Media names are broadly underperforming the wider market, ticking up just about a third of a percent on average. Looking at the specific movers, CoreWeave continues its absolute tear, up over fourteen percent today. That infrastructure play is incredibly real right now. As studios push more of their heavy visual effects rendering and new generative AI workflows into the cloud, investors are betting heavy on compute providers to power the next era of production. Lionsgate is right there with them, surging over fourteen percent today as well. That is purely the Michael Jackson halo effect in action. After we tracked that biopic breaking records over the weekend, Wall Street is finally pricing in the massive, sustained cash flow that film is generating on a global scale. On the flip side, the legacy media and social names are dragging the sector down. The streaming index is totally flat, and legacy media is down about half a percent overall. We are seeing fuboTV slide roughly six and a half percent. Despite the broader market rally, investors are still showing deep skepticism about the long-term economics of the smaller, sports-adjacent streaming bundles, especially with the major players consolidating their leverage. That closes the book on today's briefing. Thank you for spending your morning with me. If you want this level of strategic intelligence at your fingertips every single day, head over to studiosignal-dot-app. Kai Rivers signing off — I will see you tomorrow.