By Hollywood, people here mean the big studios/distributors, that is, the companies who provide the cash, not the production companies that film the stuff.
Through a system of billing specifically set up to make the production company end up deep in the red while the big "studio" rakes in the profits. AKA Hollywood accounting.
The system is rotten to the core, and copyright as a concept has been broken since the day someone could drop a couple of 100s on the table and walk out the door with the digital equivalent of a printing press.
Copyright basically hinges on the act of copying being a laborious process, involving large machinery and man-hours.
This because such requirements make all acts of copying for profit activities, to recoup the costs of the copying.
But when producing one additional copy is a case of ctrl-c ctrl-v, calculating the cost heads into "angels on the head of a pin" territory.
Copyright died the year that xerox machines got installed in public and college libraries. Everything since then has been attempts to unring a bell, and maybe stuff a genie back into a lamp.
People forget or don't know that Hollywood is the Silicon Valley of films. You need a special effect? There's a guy down the street who can do that. You need a special lens or lighting? You can rent that, today, for a hundred bucks at the shop around the corner.
That's why films, and the people who make them, congregate in Hollywood.
The guy down the street is not a big studio/distributor providing the cash. As I said, people aren't talking about Hollywood-the-place. It's a metonym, like "Wall Street" and "Fleet Street", and in this case it's specifically about a few companies (mainly the MPAA members).
