Creators reshape Hollywood but hit limits

Hollywood spent years wooing online creators, but the dynamic has reversed. Creators are now entering the industry, bringing loyal audiences, original intellectual property, and a production approach that is quicker and less costly than traditional studios.

Two horror films born on YouTube, Obsession and Backrooms, have earned $426 million and $357 million respectively at the box office. Private equity firms are raising funds to acquire meme-driven properties like Skibidi Toilet. New studios are forming with the goal of scaling creator content, using social media as the starting point for a pipeline that extends to streaming, linear television, and other formats.

The new power players

Leanne Perice, founder and CEO of management firm Made By All, describes the change as “Creator Hollywood.” Her company now develops projects at its in-house studio, Made By Us, after years of connecting top creators with traditional entertainment deals. The recent move of Tanya Cohen, former co-CEO of Range Media Partners, to Perice’s team signals how seriously the industry views the shift.

Ed Simpson, CEO of Wonderloom Media, a digital-first platform backed by IP investment firm Content Partners, stated that creators have become the dominant force. His company recently purchased true-crime YouTuber Dr. Insanity, whose channel has 5 million subscribers, with plans to expand into a creator-led studio comparable to major film companies. The approach treats social media as the main platform rather than just a testing ground.

“Everything that used to serve as the top of the funnel has become an additional revenue stream,” Simpson explained. “We can take content from YouTube and distribute it to streaming or linear TV, but that comes second.”

Alphonse Lordo, partner at Content Partners Capital, said the firm helps creators monetize their content over time. “This is an early transaction,” he noted. “We focus on library value.” Acquiring billion-view YouTube libraries provides creators with capital and offers media buyers structured inventory, especially after YouTube allowed creators to replace embedded ads to renegotiate deals.

Challenges remain

Momentum hasn’t erased all obstacles. Four creator agency representatives and one creator told reporters that Hollywood deals must be sustainable, intellectual property needs scalability, and genres should be well-defined. While investment is increasing, the risk of low-quality content persists.

The shift extends beyond acting. Horror has succeeded early because it is affordable and audiences accept new talent. The next phase may include comedy, unscripted competition, sports, documentaries, and franchises that expand into film, television, gaming, and live events.

Perice’s studio is targeting comedy, recognizing that creators have varied strengths. “Our next step is to release a slate of comedy films we produce and finance,” she said. “We’ll let our clients star in or direct these projects.”

While some deals attract attention—such as investments in Skibidi Toilet—most creators won’t secure major IP ownership. Instead, smaller asset purchases, like newsletters or community-based libraries, are becoming standard.

The transformation is underway. Hollywood is investing in creators, but the journey from viral success to lasting impact is difficult.