Hollywood doesn't really "make" movies so much as market and distribute them.
Destroying "hollywood" according to the ideas proposed would likely open up millions MORE opportunities for entertainers to entertain and would likely change the market dynamics from a winner take all market dominated by a few "stars" to a more yeoman farmer type system where everyone does OK.
"Hollywood" makes entertainers sign grossly unfair contracts at the beginning of their careers justified only by the winner take all market they propagate. Hollywood is unnecessary in an age where anyone can put blender on their computer, buy an HD video camera and start making movies. You don't need huge budgets to make decent movies. Hollywood keeps most artists starving in order to gain leverage, if most artists did OK it would dramatically change the landscape at the bargaining table.
The average artist will do better with out hollywood at the expense of the "stars".
After Hollywood is dead there probably won't be any entertainers who have "millions" of fans but likely far more that have tens of thousands of fans.
If Hollywood dies because of the RFS it will be because the people voted with their feet and decided the offerings of the RFS are superior to the offerings of Hollywood. I believe that's called a "free market". It's not up to PG, me, Ben Parr or anyone else to decide what is best for the people, it is up to the people decide what is best for them. Any projected funded by YC will only succeed to the degree that it provides a better experience to consumers.