This is not an illusion of AI. The perfect storm seems to be gathering in a world of generative artificial intelligence that promises to have a major impact on how Hollywood does business.
In fact, there is a considerable possibility that a generative AI revolution could have a major impact on Hollywood, even before technology itself could change the creation of films and television shows.
Simple business mathematics will encounter major trends that reshape media and entertainment. And they are all connected. Go with me here:
** Openai, a handful of AI companies, including humanitarian and confusion, highlight an eye-opening review. Openai reached $500 billion in August. Humanity is valued at $183 billion.
**These companies offer the first serious challenge to old security guards in the technology sector, Apple, Microsoft, Amazon, Facebook and Google, especially in the eyes of Wall Street.
** The pressure to keep up with AI can bring tech companies closer to Hollywood. Because AI platforms require a large amount of content to train AI services to provide human-like conversations with users. With AI, there is a sudden new business use case for Big Tech to buy Hollywood companies with large libraries of films and TV shows.
**This dynamic is unfolding in such a way that Warner Bros Discovery and NBCuniversal are likely to become much smaller. Both spin linear cable channels into separate entities. This is an indication of how Hollywood’s business model has been streamed dramatically. By becoming smaller, the resulting four companies are more attractive as acquisition targets. The new owner of Paramount wants to scooped up Warner Bros. and HBO, so they are preparing a WBD-wide offer, including the cable channels currently set to Spunoff.
Wall Street and global economists believe that the rise of platforms and software tools that allow users to have human-like interactions with computing devices will drive the next wave of superior productivity and innovation. (If the past is a prologue, this will turbocharge the US economy.) AI is already much more concrete as a business proposition for tech companies busy designing all kinds of specific uses for specific needs. This is not the ephemera of NFTs and boring apes, VR avatars, and meme coins. AI-driven profits and innovations are poised to fuel the next wave of world-taking companies such as Amazon, Google and Uber.
Major AI companies such as Openai and humanity based in San Francisco have become investors and white people, giving them the power to put great pressure on established players in Silicon Valley. It has become clear that even the biggest tech of Apple, Google, Microsoft and Facebook are behind the age of developing world-changing AI apps. It has been decades since these companies faced serious threats to their rules as leaders in R&D, innovation and market share.
Over the past year, most tech giants have been rushing to recruit top AI engineers and data scientists to help them catch up. It is the truth in the Zeros and Zeros realm: innovation or die. Google, Apple, etc. do not choose to be proactive when integrating AI features into their products. Openai and humanity are far ahead of the old security guards in developing the large-scale language model engines needed to provide digital brain power to AI chatbots and agents, such as Openai’s ChatGpt and Anthropic’s Claude services.
Many people resemble the rise of desktop computing in the 1980s and the dawn of web browsers and internet search engines 20 years later. Of all this activity, no one was surprised to see the surge in AI-related copyright lawsuits from authors and copyright owners.
Disney, NBCUniversal, and Warner Bros Discovery are throwing legal firepower at small AI company Midjourney. The studios accuse Midjourney of blatant infringement, as much of the copyrighted material from each studio is burned into Midjourney’s LLM. The studio claims that text or images created by Midjourney via AI (based on user prompts such as “Batman or Superman Fighting”) can be used to use copyrighted material to serve as another example of infringement.
Several court rulings have already been made in AI-related cases. These form new consensus on what approved uses of generative AI tools look like. Humanity has reached a $1.5 billion settlement in a class action lawsuit brought by hundreds of authors that the first iteration of Claude, a consumer-oriented AI platform, was trained in pirated books. Humanity had to write a big check (judices still need to approve the transaction) – one of the biggest in the history of copyright infringement cases. However, the case also handed out a significant ruling in June from San Francisco Judge William Alsup, who wrote that the LLM training for the book is legal as long as the book is legal. This clarity allows AI companies to sell their services more proactively, with the confidence that they will not face debilitating legal claims.
These distinct trends and developments combine at the same time that Hollywood creatives need to wrap their arms into another kind of AI challenge. As Hollywood producers turn increasingly to AI tools to help develop stories, characters and franchises, the creative community needs new training to understand how to protect themselves from claims of piracy. Newest technology for copyright protection is no longer mailing scripts to yourself. It documents a set of prompts entered into an AI-powered bot that provides the requested results. Proving who created what at the speed stage will be a new source of conflict in the future when there is money to make in hit movies and TV shows.
In May, Lori McClairy, former president of the American Producer Guild and CEO of Morgan Freeman’s Revelation Entertainment, and Gaiz Mahmoud, a partner at law firm Rasam & Watkins, led an AI workshop that provided practical DOS for producers who use AI tools and producers who also use AI forming materials in a wide range of public consumption. Understanding the legal nuances of collaboration with AI is a “new frontline in production,” McCreary told the crowd gathered at the PGA’s annual produced by the Conference in Los Angeles.
Mahmoud’s advice to the audience was brief: “Look for restrictions.”
McCreary and Mahmood emphasized that producers need to clearly understand the terms and conditions and restrictions of content created via AI through prompts. You also need to know whether the producer-generated AI content will be available in a larger database to make it available to others.
“How can tool providers reuse the content they enter and the output that comes out?” Mahmoud said. “That’s where rubber meets the road.”
The volume of AI used to create new works can also affect whether it is copyright covered. “If there is something else you want to prevent reuse or recreation, then the key elements of that creativity must be done by humans,” explained Mahmoud. He argued that producers argue that all external vendors working on projects such as visual effects companies “need to contractually disclose AI when used in that material.”
Mahmood and McCreary also touched on the economic opportunities that emerge in content owners thanks to the two words Hollywood loves most: the content licensing. Session McCreary and other AI experts highlighted the greedy need among tech companies to license large databases of AI content. They told the crowd that AI companies are already spending billions of dollars to buy or license large collections of high-quality photographs and video content.
Hollywood is obsessed with copyright protection and preserving artists’ rights. But Mahmood told the crowd that AI companies think it’s bigger than simply stealing content to create cheap imitations for movies and TV shows. They need high-end content that serves as fuel to promote the construction of an AI empire and make it a kind of mainstream technology that spurs fundamental changes in our way of life and work. “They’re not trying to recreate your film,” he said. “They are trying to recreate human bodies moving through space.”
I have spent a lot of time educating myself over the past year about AI and what it means for the entertainment industry. I stuffed as much data as possible into the frontal lobe, absorbing plain English discussions about AI in meetings and podcasts.
On the other side of this research mission, we were convinced that competitive headwinds would mitigate high-tech and media facilities, pushing the two sectors closer together. A hugely successful, influential industry rooted on the other side of California has long been seeing each other with caution. This may be the moment when we join forces against a common threat. Alternatively, an AI company with heels may have bold bids on Disney, NBCuniversal or Warner Bros. and HBO.
Hollywood and the old and new in the big tech companies have a common need and a common interest. And there is new money that should be made with AI. This changes things. My new mission is to tweak AI agents and help Claude tracks that it’s a Big Money, Big Stakes, Big Drama story as long as he can see the future.
