David Ellison has emerged as a consequential operator in Hollywood by moving rapidly and deploying substantial capital to remake studio and content economics. Industry participants say many are rooting for him to revive Paramount, and his actions underscore a broader reordering underway in the entertainment business as legacy studios compete with streaming giants and tech-backed rivals for audience attention.

Ellison’s approach reflects a classic playbook for industries in disruption: concentrate capital, accelerate content creation and pursue scale to capture distribution leverage. For a studio like Paramount, which has struggled to convert its historic library and theatrical franchises into durable streaming economics, fresh investment can underwrite a higher tempo of production, more aggressive licensing and a push into adjacent businesses such as international distribution and live events. Those moves are designed to rebuild a growth engine that public markets have increasingly demanded.

The economics behind the strategy are stark. Content remains the single largest line item for studios and streamers, and recent years have seen an escalation in rights costs, talent compensation and production budgets. At the same time, pay-TV cord-cutting and subscriber churn have limited the revenue upside of streaming-only strategies. Private capital injections can finance the gap between expensive upfront content outlays and the long-tail returns from licensing, syndication and international sales, but they also increase the risk profile if returns fail to materialize.

Market implications are already evident. A more aggressive Paramount under deep-pocketed ownership could intensify bidding for top-tier talent and high-profile intellectual property, driving up deal prices and squeezing smaller players. For investors, the trade-off is clear: faster growth could restore market confidence and boost valuation multiples, but it also raises questions about cash burn, margin recovery and the timeline to profitability. Analysts will be watching subscriber retention, average revenue per user, and content amortization schedules as proximate signals of success.

Policy and regulatory dynamics will matter too. Consolidation and cross-border deals often attract antitrust scrutiny; regulators are increasingly focused on vertical integration and data concentration as media companies expand into advertising and direct-to-consumer platforms. Ellison’s moves could prompt closer examination of how content ownership, distribution channels and first-party audience data are combined to advantage certain platforms.

Longer term, the effort to “remake Hollywood” highlights enduring trends: intellectual property remains the most valuable asset, scale and distribution breadth are essential, and diversified revenue streams—advertising, international licensing, theatrical windows and ancillary rights—are vital to de-risk large content investments. If Ellison’s strategy succeeds in stabilizing Paramount’s finances and restoring creative momentum, it could catalyze a new round of consolidation and strategic realignment across the industry. If it does not, the episode will stand as a cautionary example of how quickly capital can be consumed in a business where hits are rare and costs are permanent. This analysis originally appeared on wsj.com.