"Split" Hollywood

As the new generation of technology, represented by large models, sweeps across the world, tech giants and early adopters are pondering how to accelerate the adoption of technology. A sense of anxiety about whether AI will cause people to lose their jobs is slowly creeping in.

Across the ocean, Hollywood seems to be the most aggressive and conflicted entity in the face of this technological wave when it comes to this issue. The so-called "aggressive" refers to the fact that during the prolonged strike in Hollywood, many actors and writers expressed concerns about artificial intelligence, and the core of this struggle was their hope not to be replaced by AI.

Although the strike has ended, the other side of the "conflict" has also emerged. Within Hollywood, a new divide has formed—one side is creators filled with fear and uncertainty about new technologies, while the other side is Hollywood giants who have chosen to embrace AI.

Vanity Fair recently lamented in an article: "Hollywood is about to experience the chaos that the music industry went through more than twenty years ago." With the emergence of new platforms and tools that allow ordinary people to create feature films like "Citizen Kane" in their living rooms, how can Hollywood studios compete?

In fact, while creators fear being "replaced by AI" and make efforts to resist it, Hollywood giants have already made their choices.

AI Giants "Competing" for Hollywood

When we talk about "Hollywood," in a macro sense, we're actually discussing the "business of giants."

In the capital game of the past few decades, from the "Golden Age" represented by the "Big Eight" period, to Sony's acquisition of Columbia, Amazon's acquisition of MGM, Disney's acquisition of Fox, AT&T's acquisition of Time Warner, under a series of changes, Hollywood has now formed a basic pattern of the "Big Five Giants," including Disney, Sony, Warner Bros. Discovery, Paramount, and Universal Pictures.

Compared to the fear of AI among writers, the giants' layout of AI has long been on the agenda.

As early as last year, before the writers' strike, Disney established a special AI working group to internally study the widespread application of AI to control production costs. In February of this year, Disney announced its annual incubator program, with three of the five selected companies being AI startups. Warner Bros. Discovery, on the other hand, teamed up with Cinelytic back in 2020 to develop an AI system to assist in film distribution.

Meanwhile, the "OpenAI" groups, shocking Hollywood with their large model technology, are also seizing every opportunity to please the Hollywood giants.

At the end of March this year, OpenAI met with executives from Paramount, Universal, and Warner Bros. Discovery to promote and showcase their Sora model, and have already granted access to Sora to some top actors and directors. According to individuals involved in the meeting, OpenAI explicitly requested help from studio executives in promoting Sora.

In the realm of "Wensheng Videos," the "hot spicy chicken" Runway, which has gained popularity, has long been involved in Hollywood blockbusters such as "In the Blink of an Eye." Runway previously reported that the user base for its second-generation Wensheng video model, Gen-2, has reached millions, including a group of professionals from production and animation studios.

The reason why Hollywood giants are taking such an active stance towards AI star companies is closely related to their own predicament.

The strike is just a microcosm of Hollywood's current dilemma. Over the past year, Hollywood giants have found business increasingly difficult. In the 2023 fiscal year, Warner Bros.' studio business revenue decreased by 12% year-on-year, while Paramount Pictures' revenue decreased by 20%. While the surface reason appears to be the impact of the "strike aftermath," the deeper cause is that Hollywood content seems to be losing appeal with audiences.

Looking at the historical record of North American box office revenues, although the $9 billion in 2023 was the best performance in nearly three years, in fact, since 2009, North American box office revenues have remained stable at around $10 billion. And the films that truly resonate with audiences are no longer just superhero movies but also titles like "Barbie" and "Auburn Homemaker," perhaps explaining why Disney has lost its box office dominance.

Tom Rothman, Chairman and CEO of Sony Pictures, has stated that after the strike, the challenges facing Hollywood are even more severe: "Producing films with strong cultural expectations and higher watchability. If we can meet such high standards, we will succeed; otherwise, it's game over."

More importantly, the cost of film production is also increasing. According to Vanity Fair, excluding marketing costs, the budget for a TV episode ranges from $6 million to $25 million, while the production costs of most mainstream films are as high as $100 million to $250 million.

With box office performances falling short of expectations and costs skyrocketing, Hollywood giants are placing even greater emphasis on return on investment and will be more cautious about cost control. After his return, Disney CEO Robert Iger explicitly referred to AI as a disruptive technology and acknowledged AI's ability to "create efficiency" for Disney. Earlier, Disney shareholders also called for Disney to quickly launch an AI strategy because "stock prices are expected to double."

Therefore, to some extent, AI technology has always existed in Hollywood, and Hollywood giants have been actively laying out strategies. However, the downturn in the industry, combined with the development of AI capabilities represented by large models, has greatly exceeded expectations, further amplifying Hollywood's technological anxiety.

The "Division Among Creators"

Beyond the macro business of the giants, focusing on the internal perspective of Hollywood creators, there has already been a noticeable division in attitudes towards AI.

At a summit for creators, scenes like this are emerging. Some Hollywood writers want to discuss and plan how they use AI to draft outlines, but because they were discovered by the leaders of the Writers Guild, they withdrew from the summit.

This is the real situation in Hollywood: Some creators actively embrace AI, even participating in AI entrepreneurship, while others remain skeptical of AI technology.

Andy Weir, author of "The Martian," who is both a science fiction writer and a screenwriter, believes that artificial intelligence can write better stories than humans, even predicting, "Before my life ends, my profession will actually disappear." Los Angeles filmmaker Paul Trillo expressed excitement about experimenting with Sora after trying it out, stating, "I'm excited for more experimental use cases with it." He believes that producers can start producing more products through Sora.

Taylor Perry, a well-known filmmaker in Hollywood who holds multiple roles, chose to immediately suspend an $800 million studio expansion after seeing OpenAI's Sora. He also decided to use AI in two upcoming films.

Some creators have actually already directly entered the AI entrepreneurship army. For example, Tyer Sheridan, the star of "Ready Player One," co-founded the AI startup Wonder Dynamics, whose product, Wonder Studio, specializes in CG animation effects. It is understood that this tool is currently being used in film production.

However, the early adopters of the above-mentioned technology, or the leading creators in Hollywood, their attitudes cannot represent everyone.

What actors and writers are concerned about is not the AI technology itself, but rather the "unseen and unresolved issues" that come with the rapid development of AI technology.

Firstly, there is the issue of copyright. For many years, Hollywood has been scanning the bodies of extras and digitizing them for use in film production to create realistic digital characters on a large scale. Some extras and leading actors are worried that their images, likenesses, and voices may be misused by the technology.

Furthermore, in the process of intelligent film production, a large amount of data and materials are also designed, so how should their originality and creativity be defined? It is also very difficult to investigate and gather evidence from a technological standpoint. Not long ago, members of the Federation of Screenwriters in Europe (FSE) and the International Association of Writers Guilds (IAWG) passed a joint resolution calling for the "ethical use" of artificial intelligence and not to use writers or their works. The resolution explicitly states that only human writers, not artificial intelligence models, can obtain copyright for original works.

Secondly, there is the issue of cutthroat competition. The lower-level workers in Hollywood are more concerned about their stable livelihood. The Writers Guild of America (WGA) pointed out that in the past 10 years, the median wage for writers has decreased by 4% to 23% (adjusted for inflation), but the proportion of writers earning the lowest standard weekly or per-episode income has been increasing, and the share of the pie they receive is getting smaller.

When more studios use AI to reduce costs and increase efficiency, it may lead to unhealthy price competition, as capital always seeks profit, while the union wants to fight for more benefits for creators, and capital wants to lower prices. AI becomes a catalyst, potentially leading to the deterioration of the entire Hollywood creative ecosystem.

The metaphor of Hollywood: the magnified "technology gap"

On one hand, there is a positive embrace of technology, while on the other hand, there is a divided reality. Hollywood's crisis is a "metaphor" for the rapid advancement of AI technology—how to overcome the "technology gap" has been overlooked while tech giants are promoting the dividends of technology.

If you understand the history of Hollywood, to some extent, every change in Hollywood is closely related to technology.

From silent films to talkies, from production studios to television technology, and then from the invasion of streaming media, for the past few decades, new and old technologies have pulled, pushed, and struck Hollywood in various ways, but Hollywood still moves forward.

However, the situation has changed now. What is truly causing the division is not just an advanced technology still in its early stages of promotion, but the overlooked "technology gap." While tech giants are busy expanding their ecosystems, and movie giants are scrambling to find ways to survive and improve their performance, the only thing being neglected is how to better understand the needs of "people" and develop strategies to bridge the gap, rather than just immersing themselves in fantasies about technology.

In this regard, the contradictions in Hollywood today also provide more insights. From a high-tech perspective, transitioning from niche to mainstream is crucial, but bridging the technology gap requires addressing more immediate real-world issues.

References:

1. Vanity Fair: How AI Could Disrupt Hollywood

2. The Information: While Hollywood Writers Fret About AI, Visual Effects Workers Welcome It

3. Silicon Valley 101: Hollywood Actors and Writers Guilds Successively Go on Strike: The Shockwave of AI and the Survival Crisis of Practitioners

4. DuMou: AI Has Turned Hollywood Upside Down