Hollywood’s High Costs and Poor Story Quality are About to be Shaken Up by AI Technology
You can tell a lot about an industry by examining what it’s afraid of.
Image: Los Angeles Times. Hate to say, but once technology can allow people to do what this guy does without the need for all that gear and his years of experience, he’ll need to find another job.
Living in the greater Los Angeles/Orange County area, I get a lot of news on the inside state of the film industry in Hollywood. This enormous cost of doing business in Los Angeles and California overall is putting the squeeze on the entire industry. This has led to an increasing number of productions moving to states that offer better tax incentives, and some productions even move to other countries that allow for the bypassing of unions to save on overall costs and hassles.
Am I sympathetic to the plight of film crews? Absolutely – one cannot be happy to see others lose their livelihood. But they’re in the same boat as everyone else when it comes to having to economize in the workplace for an industry just to survive.
In this economy, just about every business sector has found itself having to cut back on overhead, limit job opportunities, and find ways to add value to its offerings. Movie and television production is no different, and this reckoning was not only long overdue, it was entirely predictable.
The Modern Era of Film Making is About to Change
The cost of production has made the modern film business extremely risky for those bankrolling an ambitious film or TV project. Today’s blockbuster film productions routinely cost anywhere from $200 to $300 million to produce, with the added marketing and advertising costs sometimes matching that amount. This requires the film to deliver ticket and home video sales that are twice that of its overall production cost just to break even.
The half a billion dollars many big-budget films are required to deliver reduces the industry’s output to mostly sequels of past blockbuster hits and animated family films that have a better chance at profitability once home video revenue kicks in. Broadcast and streaming television is just as risky, as production costs of some singular episodes of television can exceed $20 million.
One has to wonder “where does all that money go?” Short answer: To pay people. Big productions are massive enterprises, with hundreds of artists, craftspeople, designers, technicians, and laborers involved, not to mention the acting talent. Sit through the end credits on any movie, and you’ll see a vast number of names, each representing a paycheck added to the movie’s budget. Are all of these paychecks really necessary to create a high-quality movie or television program?
Enter Generative AI Technology
Technology disrupts countless industries every day, and over time it represents an existential impact in ways that could make a lot of jobs clearly redundant or outright unnecessary. That is what AI is doing to Hollywood, and frankly it couldn’t have come at a better time.
If you believe your favorite movie franchise or television series has declined in quality, it’s not your imagination. Just this last Memorial Day weekend, movie box office performance hit a 26-year low, plummeting 38 percent from just last year. It isn’t that people don’t like going to the movies, it’s that people are not attracted to the movies that are being presented to them.
The Product Matters
Take for example “Furiosa, a Mad Max Saga,” a movie that doesn’t even feature Mad Max. I love Mad Max, yet there is no compelling reason for me to see Furiosa. Who wants to spend $30 and three hours to watch a young girl boss a bunch of big tough dudes around? And Furiosa is a prequal to Mad Max: Fury Road, a story where Max wasn’t even in the lead role. Bait and switch, for sure, but it worked.
Furiosa cost nearly $170 million to produce and probably another $100 million in promotion costs, so it will need to make $500 million to break even. The global box office over the opening Memorial Day weekend was $59 million.
Furiosa is shaping up to be a financial disaster for its producers (Warner Bros., and Kennedy Miller). And this is not the only one.
Disney completely destroyed the Star Wars franchise, turning a massive money-making cinema and merchandising juggernaut into a streaming show that nobody wants to watch. Disney also took the Indiana Jones series, emasculated Indy himself by making him take orders from a really unlikable female lead, and lost a reported $143 million in 2023 (along with The Marvels, The Flash, and Wish, Disney lost a staggering $1 BILLION on just these four films). All of the gender- and race-swapping effort coupled with its ignorance of what their customers actually want for their kids has been a financial catastrophe for Disney.
Hollywood is spending hundreds of millions of dollars on movies that people do not want to watch. They’re losing incredible amounts of wealth. Something has to give, and what will it be?
It will come at the expense of the story creators and film crews. Here’s how the next generation of AI will completely upend the movie, TV, and home video industries.
Tyler Perry Sees the Future of Filmmaking
OpenAI, the leader in generative AI technology, introduced Sora, a program that can generate incredibly photoreal computer animation with relatively simple text prompts. Days after getting a demonstration of Sora, independent film maker and producer Tyler Perry cancelled an $800 million expansion of his Atlanta studio complex, citing what he had seen from Sora.
Instead of overbudgeted and potentially money-losing ventures, AI will allow Perry’s productions to be made on a comparative shoestring. Perry will no longer need to build expensive sets in exotic locations. He no longer needs massive amounts of crew to haul and operate equipment on city streets after pulling numerous permits and paying for catering and security. Postproduction no longer requires Perry to conduct extensive reshoots due to AI allowing for revisions by simply changing text prompts.
It's a Real Game Changer
The integration of generative AI into filmmaking will result in large shifts in industry employment. We've seen large-scale job disruptions many times in the past. Remember Blockbuster Video? The home video rental giant had more than 9,000 outlets and employed 84,000 people at its peak. Today, all of those jobs are gone due to technology that allowed for streaming services and digital rental options to make home video more accessible and easier than ever.
The same can be said with Hollywood, as many of today’s film workers will likely be displaced by AI that will deliver a combination of tasks that are easier, more accessible, faster, less expensive, and more accurate. This is a primary reason why the writer’s and actor’s union strike in mid-2023 was so consequential – these unions were terrified of what AI would do to their membership and tried to insert guarantees that AI would not displace union jobs. The unions got some ancillary concessions however it had to acquiesce to the overriding issue that AI isn’t going anywhere. It is, in fact, a tectonic shift in how content will soon be created in Hollywood at scale. And it isn’t just for those with deep pockets.
Anyone will be able to produce a blockbuster movie for a whole lot less than what it costs today by using AI. That will open the industry up to new voices and new ideas that have been shut out by the Hollywood studio system and the power players that have ruled over them for years. The monopoly on politically correct storylines and narratives that are destroying the film industry and pissing off its customers will soon be over. Thanks to AI.