Screen International’s Americas editor Jeremy Kay highlights key talking points for the US film sector in 2026.
How will the Warner Bros Discovery sale impact the independent sector?
If the Warner Bros Discovery (WBD) board’s favoured bidder Netflix prevails over “hostile” huff-and-puffers Paramount in the battle for all or part of WBD (which today rejected Paramount’s second amended bid), there could be a significant knock-on effect for the independent space. Were the streamer to acquire WBD’s studio and streaming business once regulatory requirements and other closing conditions are met (estimated to take 12-18 months), the acquisition could divert its attention (and budget) away from buying completed films on the open market.
That could give smaller theatrical buyers the chance to step up. It could also usher in a fruitful period for independent financiers and sales agents eager to get new projects off the ground. Of course, nobody knows anything at this point – besides the fact that the bankers and WBD CEO David Zaslav are getting rich. Regardless of who buys all or part of WBD, Zaslav will walk away with more than $500m in equity – not a bad payday for an executive who merged WarnerMedia and Discovery in 2022, presided over a drop of up to 60% in the combined entity’s stock, and is splitting them up again.
What will the industry make of TIFF: The Market?
So many questions, so few answers. Does the industry need another market, especially less than two months before the American Film Market that just returned to Los Angeles? Will there be sufficient time to assemble packages after the summer holidays? Sales agents whom Screen canvassed in 2025 are divided, ranging from FilmNation CEO Glen Basner, who told Screen’s podcast the market is “solving a problem that does not exist” and there was no need for another autumn market, to A Higher Standard founder Jeffrey Greenstein, who told an AFM panel hosted by Screen that he welcomed more opportunities to transact in-person.
Toronto is one of the most beloved festivals on the circuit, and sales agents typically use it to present completed films to buyers and (soft-) launch sales on an opportunistic basis. Will buyers, already overwhelmed from covering a vast selection, adapt and treat TIFF as a venue for full-on dealmaking? Will TIFF stump up for their travel, accommodation and accreditation costs? Time will reveal all. TIFF: The Market runs September 10-16, 2026, and the festival runs September 10-20, 2026.
AI on the march
If anybody wondered what Darth Vader would look like in a mankini cavorting on the beach with Minnie Mouse, they could be about to find out after Disney’s deal with OpenAI’s text-to-video software Sora. That may be a text prompt too far, but you get the idea: Sora users can now mash up Disney IP, including Iron Man and Cinderella, thanks to this agreement.
Disney CEO Bob Iger has said he will step down at the end of 2026 (he has retired and come back before, so take that with a pinch of salt) and will have his legacy on his mind. Iger has proved himself to be a forward-looking executive and the OpenAI arrangement shows him getting in front of a subject that has preoccupied Hollywood for the last couple of years.
AI companies have been scraping the internet for some time now, and Disney and Universal sued AI company MidJourney in summer 2025. Now the thinking appears to be more collegial – and resigned. It is said AI will lower the barrier of entry and reduce production and VFX costs for independent content creators around the world, so it is understandable that now that the cat is out of the bag, more studio deals of the Disney-Sora magnitude are likely to follow. As one source told Screen of the Disney deal, “If you’re going to get deepfaked, you might as well get deep-rich in the process.”
Guilds prepare for next rounds of contract talks
Talking of AI, the Hollywood Guilds will return to the negotiating table with the studios in 2026. That’s a chilling thought, bearing in mind the last round of talks saw Hollywood actors and writers go on strike for 118 days and 148 days, respectively. Besides standard contractual terms, AI guardrails and other matters are likely to be on the agenda. Actors guild SAG-AFTRA ratified agreements related to AI across interactive media, commercials, and television in 2025.
The guild will start talks with the Hollywood studios and streamers on February 9, before their current three-year contract expires on June 30. The same goes for their writer and director counterparts. We can expect to hear a lot about AI guardrails, consent of use, fair compensation, and control over performances.
Los Angeles production blues
High costs in Los Angeles and compelling incentives and living costs offered by other US states, which themselves continue to battle attractive offerings around the world, have seen the production sector in the heart of Hollywood suffer. The quarterly reports from FilmLA, the agency that publishes the number of shoot days in the Greater Los Angeles area, by and large made for grim reading in 2025, even if the most recent report in October noted a 10% year-on-year climb in feature shoot days in the third quarter, bucking a hitherto downward trend.
California governor Gavin Newsom’s recent move to double the California Film & Television Tax Credit Program allocation may have had something to do with that, but will it fuel a rebound in 2026? This remains to be seen, especially given that productions in rival key states such as New York and New Mexico are on the rise. Ultimately, it is the rank-and-file members of the production community who have endured the most hardship in the last few years as the sector has been buffeted by the pandemic and Hollywood strikes.
The Trump factor
US president Donald Trump loves to be front and centre of everything, and his shadow looms large over the media industry. The White House incumbent has twice threatened to impose 100% tariffs on films produced outside the US, sued media and news companies, including most recently the BBC, called on the Federal Communications Commission to target networks and talk show hosts, and dropped hints about his involvement down the line in the eventual sale of Warner Bros Discovery (WBD).
Will the tariffs ever get implemented? Few in Hollywood think this is likely in the initial form proposed by Trump (his Hollywood “special ambassador” Jon Voight is working on a broader framework), and the World Trade Organization has imposed a moratorium on levies on digital goods. However far-fetched Trump’s ideas may appear, they can send Hollywood into a tizzy and serve as a distraction – people may have been sceptical about Hollywood tariffs from the get-go, but everyone was talking about it in Cannes.
As for the sale of WBD, the president’s friendship with supporter and Republican donor Larry Ellison, the centibillionaire Oracle co-founder and father of Paramount CEO David Ellison, could have a bearing on the transaction. Then again, he has flattered Netflix co-CEO Ted Sarandos. And let’s not forget that Trump is mercurial and can switch personal allegiances on a whim. The hope is that as the 2026 mid-term elections get closer, the most powerful person in the world will have matters other than Hollywood on his mind.
New US theatrical buyers
After years of diminishing returns at the box office and a deep-seated risk aversion from US buyers at markets and festivals, 2025 was the year when the industry saw a phalanx of new distributors emerge. Row K was the talk of Toronto with four acquisitions, Black Bear moved into the North American theatrical distribution business (as it has already done in the UK), Mubi stepped up and dominated Cannes acquisitions, and Screen reported that 101 Studios is preparing a pipeline of releases and will work with FilmNation as its international sales partner. Meanwhile, 1-2 Special, Watermelon Pictures, and Sumerian Pictures are all new or relatively new arrivals in the specialty space.
On the studio side, Warner Bros put aside the trifling matter of takeover bids from Netflix and Paramount and announced in December that a trio of former Neon executives will lead its new specialty label.
2026 will also be the year Amazon MGM Studios unleashes its slate of tentpoles under the purview of Courtenay Valenti, whose late father, Jack Valenti, once led what was then called the Motion Picture Association of America (the group has since dropped the “of America” part). The slate kicks off with Mercy starring Chris Pratt and Project Hail Mary with Ryan Gosling. Hopefully, the Fates don’t read too much into the names.
Box office rebound?
North American ticket sales for 2025 were expected to finish around the $8.8bn mark. The theatrical community expects much, much better in 2026. For a couple of years, the word among exhibitors and at consecutive editions of CinemaCon has been that the coming year’s box office will be big.
The thesis is that with Covid cinema closures and Hollywood strikes in the rearview mirror, the production cycle is back on track and will push receipts towards the $10bn and $11bn halcyon days of the 2010s. The stockpile of potential 2026 blockbusters is undoubtedly promising: waiting in the wings are new Spider-Man, Toy Story, Minions, Super Mario and Dune instalments, a Star Wars spin-off, Christopher Nolan’s Odyssey, an Avengers movie, and the Michael Jackson biopic.
However, the story is more nuanced. Reports cite a drop of 15%-20% in cinemagoers since the pandemic, and it is likely the gradual erosion of the exclusive theatrical window would accelerate should Netflix prevail in its bid for Warner Bros and HBO Max. Raw, unadjusted ticket sale numbers would provide a much-needed fillip to the theatrical community.
On the plus side, media bosses like to talk up the benefits of a theatrical release throughout a film’s revenue waterfall (albeit a diminished waterfall since the advent of streaming), and Cinema United recently reported an increase in the level of Gen Z cinema-goers. Hope springs eternal.
No comments yet