The Transformation of Hollywood: Tokenization and AI in 2025

In 2025, the global tokenization market experienced remarkable growth, reaching approximately $1.24 trillion, driven by advancements in regulatory clarity, AI integration, and strategic consolidations within Hollywood's media and entertainment industry. This article explores how tokenization and AI are reshaping the landscape of film and TV distribution.

Key Takeaways

The global tokenization market surged to $1.24 trillion in 2025, with expectations for continued growth fueled by regulatory advancements.
Major Hollywood studios are consolidating power, with Netflix's acquisition of Warner Bros. Discovery for about $82.7 billion.
Streaming services face criticism for diminishing revenue for mid-budget films, impacting compensation for artists.
The emergence of edge cloud technology is enabling enhanced streaming experiences while supporting diverse monetization strategies.
The "watch-to-earn" model is gaining traction, allowing users to earn tokens through engagement.
AI plays a crucial role in content creation and distribution, with leading streaming platforms actively utilizing it to connect creators and viewers.

Tokenized streaming with edge technology and AI fundamentally transformed Hollywood and global film and TV distribution

The Changing Landscape of Hollywood

Hollywood, home to the world’s largest media and entertainment industry, has seen significant innovations in its film and TV production and distribution frameworks. Traditionally dominated by five major studios—Universal Pictures, Paramount Pictures, Warner Bros., Walt Disney Studios, and Sony Pictures—these companies controlled 80-85% of the U.S. box office revenue. However, in 2025, a notable shift occurred as Netflix announced it would acquire Warner Bros. Discovery for approximately $82.7 billion, contingent on regulatory and shareholder approval, amidst a rival bid of $108 billion from Paramount and Affinity Partners.

Prominent actor Matt Damon has voiced concerns that the rise of streaming services is detrimental to cinema, especially for independent productions that struggle to thrive in a streaming-centric market that lacks the traditional revenue-sharing structures from home media sales. He cites his film "Air," which, despite being streamed on Amazon Prime, barely recouped its $90 million budget at the box office.

Additionally, major streaming platforms have increasingly focused on international productions in countries like France, Italy, and Mexico, due to the financial incentives and strong local film infrastructure that overshadow California's less attractive tax environment. This trend has caused concern for U.S. policy makers, including President Donald Trump, who proposed tariffs on foreign films to bolster domestic production against overseas competition.

The Age of Streaming Technology

The COVID-19 pandemic accelerated the transition to streaming technologies pioneered by companies like Netflix and Amazon. This shift has fundamentally changed how films and shows are created, distributed, and consumed. Concerns have arisen regarding the concentration of power within a few major U.S. media and tech companies, leading to potential risks concerning diversity of content and anti-competitive practices.

Streaming platforms now utilize edge cloud technology and AI to enhance content creation workflows, improve production efficiency, and personalize viewer experiences. Blockchain technology is also being integrated into these systems, offering decentralized solutions for new revenue models like earning royalties from viewership via smart contracts.

The Rise of Edge Cloud Streaming

The pandemic catalyzed a digital transformation in Hollywood, embracing a distribution model centered on streaming, mobile accessibility, and substantial investments in original programming while seeing traditional cinema attendance decline. Edge cloud services from leading providers like AWS and Google Cloud allow media companies to deploy applications closer to their audiences, thereby providing faster delivery and more efficient content management.

This edge cloud approach supports various monetization strategies, including subscription models (SVOD), ad-supported formats (AVOD), and transaction-based systems (TVOD). Media companies are leveraging localized data processing to enhance streaming quality and improve ad targeting, significantly enhancing the viewer experience.

The Watch-to-Earn Revolution

Emerging "watch-to-earn" models have introduced a novel way for users to engage with streaming content, allowing them to earn tokens for their viewership. Utilizing blockchain, these platforms transform engagement into cryptocurrency, providing an innovative alternative to traditional monetization methods.

Key players in this space include Basic Attention Token (BAT) and the Theta Network, both set to disrupt conventional video streaming and online advertising. BAT facilitates direct payments to content creators through the Brave browser, while Theta Network rewards users with TFUEL tokens for sharing resources that improve streaming quality.

Other platforms contributing to this trend encompass Rewarded.tv, DLive, and Vuele, which further exemplify the decentralized monetization of digital entertainment content.

AI: Connecting Creators with Audiences

AI and machine learning are increasingly integrated into media workflows, particularly by leaders like Netflix and Amazon Prime, where smart algorithms inform content recommendations. For instance, Netflix attributes approximately 80% of viewing behavior to its recommendation engine.

Industry innovators like Cineverse utilize AI to connect creators with streaming platforms, using tools for content discovery and management, while partnering with the Theta Network for decentralized video delivery.

Understanding Tokenization and Taxation

The evolution of tokenized streaming envisions a direct-to-consumer model that circumvents traditional intermediaries, generating new revenue opportunities while presenting taxation complexities. The IRS treats virtual currencies as property, requiring careful record-keeping and reporting of income from tokens earned through viewing engagements.

Income derived from receiving tokens for services is treated as ordinary income, taxed at fair market value at the time of receipt. Transactions involving selling or trading tokens may lead to capital gains or losses, necessitating compliance with specific IRS guidelines.

In conclusion, 2025 stands as a landmark year for Hollywood, with developments in tokenization and AI reshaping the film and entertainment landscape. The incorporation of blockchain, edge cloud technologies, and AI not only enhances user experiences but also revolutionizes revenue models, allowing viewers to engage directly in content monetization.