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In a sense, Hollywood has died once before: the studio system used to be the only way of doing business in the movies. The breakup of the union between distribution and production lead to the current system of direct investment. http://en.wikipedia.org/wiki/Studio_system

Films have been made with other forms of investment, production, and distribution. While films like The Godfather came out of the present model, there's nothing that indicates to me that the present model is the only one that works. And, indeed, the production The Godfather in particular is one of the early successes of that model, and after 40 years its not surprising if the cracks are starting to show.