That comes from mismanagement, and putting people who don't understand entertainment in charge of too many areas of the company. When there are more movies and shows available across many different genres, you get a LOT of people interested. Not everything needs to be a blockbuster production, not everything needs to be a top tier production. It's good when you have all of them profitable, but the push where everything needs to be amazing for a specific demographic reduces the number of movies/shows, and that will cause your audience to shrink.
Unless you are a teenager, you may look at the movies that come out and decide there isn't ANYTHING worth watching. Go for too long where entire segments of the population see that there isn't anything they would enjoy, and that segment will just stop going to the movies. The same goes for shows on TV, if you get too many of a given type, or not enough of another type, you lose a lot of viewers. So, instead of needing everything to be a high cost production and getting fewer people overall, going for a mix of low budget, medium, and high will make people look forward to seeing what is new.
The same applies to games, where the variety in the types of games has dropped like a rock since around 2005, and now, there are far too many first person shooters, and not enough games that are DIFFERENT. The independent studios or small teams can come up with some of the original stuff, but most of those do feel like they would be better if they had a bigger budget for music/sound effects/voiceovers, etc. EA killing off those developers who were doing interesting things, plus the death of Interplay has really hurt the games industry, the same way these big movie studios are killing things with their focus being on "more of the same", without a lot of effort put in to be different.