Oct 1, 2023, 2:08 PM ETInterview

What is the Future of Hollywood?

Both the Writers Guild and the Screen Actors Guild were on strike, effectively shutting down all production in Los Angeles during the recording of this podcast.
The strikes originated as disputes over the economic impacts of the streaming model, which collapsed traditional multi-stream revenue (theatrical, pay-per-view, cable, syndication, and DVD) into a single flat-fee structure.
Streaming has introduced a "cost-plus" model where creators are paid a fixed fee plus a percentage, eliminating potential upside revenue from hits that previously came from DVD sales and syndication.
The transition to streaming removed "distribution scarcity," a key economic driver that previously allowed distributors to charge premiums; infinite digital distribution has shifted market power and altered revenue extraction.
Unlike the music industry, which saw over 70% of top streaming artists become independent during the streaming transition, Hollywood initially responded by creating competing streaming services rather than adjusting content production costs.

The discussion introduces "fungibility" to distinguish between unique, high-value content (e.g., The Godfather, Star Wars) and generic, formulaic content (e.g., procedural TV shows like Law & Order).
AI is predicted to excel quickly at generating fungible content, such as standard genre scripts, background dialogue, and formulaic scenes, potentially making these indistinguishable from human-written versions to audiences.
Non-fungible, "true originality" is viewed as currently beyond AI capabilities, though this may change as the technology advances.
A shift toward "independent Hollywood" is anticipated, where creators can produce high-quality work on laptops using AI, mirroring the rise of independent music and reducing reliance on major studio distribution.
The "blacksmith vs. car" analogy suggests that while specific roles (e.g., traditional screenwriters) may diminish, automation historically expands the total size of an industry and creates net new job opportunities.
There is a risk of "stuck culture" or "nostalgia loops" in the short term, where risk-averse studios rely on franchises and remakes; however, AI tools may lower the cost of originality, potentially breaking this cycle.
AI could enable "immortalization" of artists' likenesses and voices, allowing fans to interact with synthetic versions of artists long after their death, provided licensing and revenue models are established.

AI tools are already capable of generating proper screenplay structures (e.g., the "Save the Cat" 15-point beat sheet) and can be used to brainstorm, overcome writer's block, and create "obvious" scenarios that creators can then discard.
Future workflows may allow directors to pre-render entire movies or detailed storyboards on laptops to pitch to studios, reducing the physical production costs required to secure funding.
Film students and aspiring creators may soon possess the tools to produce "Hollywood-caliber" visual effects and full productions on personal laptops, democratizing access to high-production-value filmmaking.
Specific use cases include using AI to generate "five obvious ideas" for a plot twist that the writer must then reject, thereby forcing the creation of more original, non-obvious narrative paths.
The technology is expected to evolve rapidly to allow actors to insert themselves into 3D environments, effectively rendering themselves into AI-generated scripts and scenes without traditional sets.

Hollywood serves as a mechanism for cultural export, allowing nations to spread values and lifestyles, a role highlighted by anecdotes of individuals in communist regimes gaining awareness of the outside world through American films.
Entertainment acts as a "release valve" for societal tensions, with comedians and storytellers able to voice taboos or subvert norms that would otherwise be repressed in the general public.
The concept of the "global village" carries a dual risk: while it increases connectivity, it may also lead to hyper-conformity and the suppression of individuality through intense social pressure and risk-averse content creation.
The rise of non-English language content (e.g., Korean Squid Game, Israeli Fauda, Filipino BuyBust) indicates a shift toward diverse global storytelling, which is enhanced by decentralized distribution and lower production costs.
There is a growing demand for "provenance" and authentication of content to combat deepfakes, with blockchain technology suggested as a solution for verifying the origin of audio, video, and lyrics.
The industry faces a potential dystopian scenario where AI optimizes content for neurochemical reactions (triggering specific brain pathways) to maximize engagement, effectively "programming" human emotions in a way that strips art of higher aspirations.

Worst-Case (Dystopian): AI creates perfectly engineered content that targets biological responses (dopamine, cortisol) without artistic depth, creating a world of endless, addictive, but soulless "Cheeto-like" entertainment.
Best-Case (Utopian): AI acts as a superpower for top-tier creators (e.g., Spielberg, Nolan), enabling them to build richer, more intricate worlds and produce content at a speed and scale previously impossible.
Middle Ground: A bifurcated market where low-cost AI-generated content saturates the "comfort food" sector, while high-cost, purely human-made content becomes a luxury good (similar to handmade shoes or live concerts) due to the premium placed on "realness."
IP and Royalties: Blockchain and smart contracts are proposed as solutions to the current complexity and opacity of royalty distribution, allowing for automatic, transparent splits of revenue among rights holders.
Artist Independence: Independent artists (e.g., Grimes) are positioned to leverage AI and blockchain to license their own voices and styles for remixes, retaining ownership and revenue control that major labels historically withheld.
Geopolitics: The democratization of production may help preserve American cultural dominance by lowering barriers, but it also empowers other nations to export their own culture, creating a more competitive and diverse global creative landscape.