You're correct, but look at Japanese and Korean movies/TV shows suddenly popping up on US streaming services and outperforming most of the "Western" stuff.

Quality is down due to ideological reasons and viewers have left in droves because of that in my opinion.

I was and to a certain degree still am a big TV show and movie nerd and I loved almost anything the 90s, naughts and the early 10s gave us, with cringe moments of realizing, I am being "educated" by a sudden influx of ideology. It got so bad so quickly, that I don't watch any Hollywood stuff anymore. I presume, there are many people like myself, and they found something else in different places.

I don't think we would see the crumbling of this once mighty industry, if this ideological shift didn't happen, and I don't mean the left ideological bend Hollywood always had.
I mean this new monster, that affects every aspect of the American culture and American political discourse now and has infected its European, Canadian and Australian vassals as well.