Sorry, that's like claiming that the cinema has killed the theater, or that computer games have killed movies. Or that photorealistic 3D games have killed 2D slider games.

Blockbuster movies depend to a large extent on the pedigree and abilities of their cast. For the big studios, these models are therefore quite useless apart from bringing dead actors alive again. If publishing material created from living actors without isn't illegal already, in a few years it will be.

This might actually save the movie industry and force it to improve the quality of its output. There will be a huge indy scene of movie makers using models that can only compete via the content of the movies they produce. The realism of the characters won't matter because everyone can have those now. The current big studios will be forced to make very good use of human actors to compete with them though, and become innovative again.

Your analogy doesn't quite make sense. The reality of the TV/Film production is that most of what we watch are created by big production houses and not indie creators. These companies will do whatever it takes to reduce thier costs, biggest of that is salary for hundreds of staff that they currently employ.

Now with such AI tools, you can write scripts, create art work, crate footage, record voice overs and dialogues. All of this means less need for labor - creative that will not only cause huge employment in the sector but also lead to protests, it already happened last year in Hollywood, it's going to get louder and louder unless we put regulations to prevent job disruptions.

But those tools can also be used by the very employees that got laid off. They be would become part of the indie scene. The film studios will be left with their trademark portfolio that will be milked for profit. We might see an Avenger movie every month. There will be an absolute glut of such productions, to the point that people might not be interested in it anymore. Can't tell what happens next. We might lose ourselves in the holodeck, or we might again appreciate media produced with more human touch.

I like going to theater or opera. Even for famous pieces, the performance will be slightly different and unique every time. Imperfect, but with changing and nevertheless accomplished actors, singers, musicians, and dancers. Many people feel the same and that's why they watch live performances of singers, bands, and DJs.

Most likely market will be consolidated by existing popular and prescient actors who will add IP protections to their AI likeness and benefit from it. Especially after a certain age

You just described the plot of The Congress: https://en.wikipedia.org/wiki/The_Congress_(2013_film)