How will AI change Hollywood's business model?

A lot of people talk about how generative AI is going to ‘disrupt Hollywood’ or ‘democratize filmmaking’.

What do other people think?

I just listened to a Doug Shapiro podcast on the topic. He’s one of the best writers on the topic!

First he laid out the disruption we saw in content distribution over the last 20 years. It was a technical innovation that led to an economic disruption.

The Innovation in Distribution
Distribution was very expensive before the 2010s. It required fiber, satellites, broadcast channels, etc. The internet gradually brought the cost of moving bits/bytes down to practically zero.

The Disruption to Distribution
First there was a disruption in distribution. Netflix disrupted DVD sales by mailing DVDs directly to your house that you ‘rented’. Then because it was technically feasible, in 2007 Netflix launched a streaming service. At first it just had crappy content. Then in 2008-2009 they signed a few big licensing deals that let them stream movies from Disney and Starz. The rest is history.

Then he lays out the situation with generative AI and the possible disruption it poses for film production.

The Innovation in Production
Production has been very expensive. Locations, equipment, permits, production design is all very expensive. But as we’re well aware, generative AI has the ability to literally conjure images and videos into existence with no real-world inputs. Staging a photograph of 1000 extras dancing in the Saharan Desert would cost… a lot. Generating it with an image model costs a few cents. Similar to internet and distribution, gen AI is bringing the cost of producing images down to practically zero.

The Likely Disruption in Production
Generative AI is already disrupting low-level image production… stuff like professional headshots, basic advertisements. You can think of this as mail-order DVDs. Doug then wonders whether it will move up and disrupt content production and bring the cost… practically to zero.