Is this the end of Big Hollywood?

The Sony hacking scandal—in which hackers (probably) in the service of North Korea shut down the release of a major motion picture—is an ominous signal about the future of cyber warfare. What it means for the movies may be a little less ominous. The Interview, a creation of Seth Rogan and co-director Evan Goldberg, is political satire about an American journalist (Rogan) and a talk-show host (James Franco) engaged by the CIA to assassinate North Korean dictator Kim Jong-Un. It may or may not have been worth seeing, but it won’t be seen because grandiose threats from the cyberbullies led Sony Pictures to cancel the movie’s release.

Even before the hackers hit, Sony executives had their misgivings about The Interview, as leaked emails show. Their chief fear wasn’t political ramifications, but overseas sales. The foreign market is a huge factor in the movie business these days—a big-budget flop in the United States can often redeem itself in the global market, setting up the studio to produce another big-budget flop (see Noah). But Sony execs anticipated that poking fun at Kim Jong-Un and his dysfunctional country wouldn’t translate well. Hacked video files, explicit threats, and theaters refusing to screen the movie made a convenient—and very plausible—excuse to yank the entire project.

Hollywood doesn’t look very noble in the process, but it has been a long time since the film industry even tried to look noble. The hacking fiasco reveals two large warts on the business that have been growing for some time.

First, its insularity: Major film projects tend to include the same directors, the same cinematographers and cameramen, and the same actors. This limits the talent pool, but also the idea pool—the same basic premises and plot devices get recycled over and over.

The second problem is related to the first: The industry has become increasingly risk-averse, and with good reason. During Hollywood’s “Golden Age,” when the major studios cranked out four or five pictures every week, they could afford losses and misfires. The studio system, which contracted actors and directors to specific studios, also kept costs under control. Now, with a limited number of bankable directors and stars along with burgeoning budgets, the bottom line for each project looms larger. Sony deserves no points for courage, but its hesitation in releasing The Interview is understandable: Not only was the film likely to bomb overseas, but if even an actual bomb went off in one theater and a handful of people were hurt, that handful could sue for millions and likely win. Not worth the risk.

But what is worth the risk? Many industry professionals believe that Hollywood—i.e., the classic model of film production and distribution, is just about dead. With affordable surround-sound systems and large-screen viewing at home, theaters may be entering their twilight years as well. The future belongs to cable television, direct downloads, and small independent producers like Sherwood Baptist Church in Albany, Ga. Big budgets and fiery spectacle may be on their way out, but that leaves room for real creativity to take the stage.