Nope. People will still make content. It'll be on far less of a budget, but that didn't stop the Film School generation of independent films in the 1970s (before which you had to sell your life and soul and beating heart to a studio). In between all the schlock were the occasional arty films we consider classics today.
And then there's government subsidization of art projects, as per the National Endowment of the Arts.
I think the MCU movies, the DC movies, the many studio iterations of Spiderman have shown us what capitalism eventually churns out. Sony actually chose this path content as product the same resort to formula that plagued the music industry in the 1980s (and drove the Hip Hop Independent movement of the next half-century).
We just need to empower artists. Make sure they don't have to moonlight as restaurant wait staff in order to eat and pay rent while they create, and make sure they have access to half-decent (not necessarily high end) hardware with which to do their thing. And yes, as Sturgeon observes, most of it will be schlock, but through sheer quantity of content we'll get more gems than Hollywood is putting out.