A $360 Million Mistake Just Proved What I’ve Been Saying About Studios & Video Production

Last week, Quixote Studios announced they’re shutting down most of their Los Angeles sound stage business, pulling out of Georgia and New Mexico entirely, and laying off 70 people. Hudson Pacific acquired them in 2022 for $360 million. The CEO recently called it “not the best deal we’ve ever done.” As someone who runs a corporate video production studio, I’ve been watching this story closely.

We built a studio. Invested real money in a production space from the ground up.

So when a $360 million studio company starts shutting down locations, should we be nervous?

No. And here’s why — because we didn’t build what they built.

They built for scale. More stages, more markets, more capacity. We built for the opposite. A small, high-value, purpose-built space designed for corporate work — not a sound stage empire, but a deliberate bet on where this industry is actually heading.

Quixote’s collapse isn’t a warning for us. It’s confirmation that the bet we made was right.

This isn’t a Hollywood story. It’s the same story playing out in corporate event production — just at a scale that makes the lesson impossible to ignore.

The Number That Tells the Whole Story

Quixote’s stages anchored by long-term relationships — Netflix locked in at Sunset Studios until 2031 — are 96 percent leased.

Their other stages, the ones built on availability and infrastructure rather than relationships, hit 53 percent.

Same company. Same market. Same macro environment. Different result.

That’s not a demand problem. That’s a model problem.

The Signs Were There

The bet Hudson Pacific made in 2022 was that the streaming wars content bubble would keep inflating demand for raw production capacity indefinitely. More shows meant more stages meant more revenue. Scale up, lease more space, serve more clients.

The signs were there for anyone watching that this wasn’t going to hold.

Here’s what I was seeing on the corporate side of production — not Hollywood, but the SaaS companies, the tech firms, the enterprises running all-hands and quarterly events and internal content programs.

They were building their own studios.

Not Quixote-scale sound stages. Smaller. Purpose-built rooms inside their own offices. A dedicated space with controlled lighting, a clean backdrop, decent acoustics, a camera setup their communications team could operate. Salesforce has one. Google has several. Most mid-size SaaS companies with a serious internal comms function have some version of one now.

When corporations build their own studios, the conventional wisdom says that’s bad for external production vendors. Less work. Smaller budgets. Why hire us when they have four walls and a camera?

And it wasn’t just corporations building their own capacity. The floor of what counts as “good enough” production was dropping everywhere. Amazon Live shopping channels running on a single webcam doing what used to require a studio and a crew. Broadcast-quality output becoming replicable on a laptop. What used to require a dedicated facility and specialized operators became something anyone could approximate in an afternoon.

That’s not a threat if you understand what you actually sell. It’s a filter. It clears out the commodity work and leaves behind the thing that can’t be democratized.

I thought about it differently.

What I Actually Noticed

Here’s what I noticed: the clients who come into the studio we built aren’t companies without production resources. They’re companies that already have studios.

They have the room. They have the gear. They have someone on staff who can run a basic shoot.

What they don’t have is what you can’t buy at Best Buy and can’t train in a weekend: judgment. Broadcast-level expertise. The ability to take a high-stakes CEO keynote or a global all-hands and make it land the way a network would — not just technically, but experientially.

Their in-house studio is built for everyday content. Interview clips. Internal announcements. The kind of thing that gets posted on the intranet and watched by people who are already invested.

When the stakes go up — the all-hands that 4,000 people are going to watch and judge against the content they saw on YouTube at lunch — they come to us.

Not instead of their studio. In addition to it.

That distinction changes everything about how you build a production business in 2026.

Corporate Video Production Studio: Volume vs. Value

Quixote built for volume. More stages, more markets, more capacity. The model assumed demand would keep expanding and that clients would keep renting bigger spaces for bigger productions.

The market didn’t cooperate. Productions slowed. Budgets contracted. And clients who were renting a box stopped renting the box because nothing held them there except availability.

We built for the opposite. A high-value, small-footprint space designed to do one thing exceptionally well: take a client who already has production resources and give them the specialized expertise their in-house team can’t replicate.

Not a bigger box. A better answer to a specific problem.

The result is that our clients aren’t comparing us to their in-house studio. They’re not asking whether they need us or their own room. They’re asking us to do the thing their room can’t do.

That’s a different conversation than “what’s your day rate.”

A Note on the Human Cost

I want to be careful about what I’m saying here. Seventy people lost their jobs at Quixote last week. That’s not a lesson, that’s a loss. The people making acquisition decisions in 2022 weren’t stupid — the streaming wars looked like a permanent shift in demand, not a bubble. Reasonable people made a bet that didn’t pay off.

But the underlying dynamic was visible if you were watching the right thing.

The question was never “will demand for production stay high.” The question was “what kind of demand, and from whom.”

Corporate clients were quietly building their own capacity for everyday production. That was always going to reduce demand for commodity studio rental. What it was never going to replace was specialized expertise — the judgment layer, the high-stakes output, the thing that requires twenty years of experience and not just twenty thousand dollars of gear.

The vendors who understood that distinction built toward it. The ones who didn’t built more stages.

If You’re Running Internal Comms or Event Marketing

If you’re running internal comms or event marketing at a company that has its own studio, here’s what I’d offer about choosing the right corporate video production studio partner:

Your studio is not a replacement for specialized production. It’s a complement to it. The companies that are figuring this out are the ones using their in-house capacity for the everyday work and bringing in specialists for the moments that matter — the CEO keynote, the global all-hands, the event that’s going to live in Slack and on YouTube and be compared against the best content your employees consume every day.

The goal isn’t to own every piece of the production stack. The goal is to know which pieces require expertise you can’t build in-house, and to have a relationship with someone who has it.

Gear shows up. Judgment shows up when it matters.

The stages that are 96 percent leased know the difference. The ones at 53 percent didn’t.

If this resonates — especially if you’re trying to figure out how to get the most out of both your in-house resources and external partners leave a comment or email me your experience.