Modern technology makes distribution free, so then you need to compete on brand and quality.
Outsourcing seems extremely short-sighted in this environment. You're devaluing your brand, and giving expertise and training to another place that can make their own products.
I also wonder how much can be attributed to weakened intellectual property protection. Comments in this thread say they don't pay for anything because they can watch it all for free.
Hollywood got devalued because people prefer spending time on Youtube/TikTok/Instagram/Reddit/Discord/Video Games/Hacker News/etc.
There was nothing the business leaders could have done to prevent the effect of basically an unlimited supply of video entertainment being added to the market.