hi everyone this is Jeff Towson TechMoat Consulting why generative AI is going to decimate Hollywood now I’m talking Disney Netflix Amazon Prime Warner Brothers production houses Production Studios TV studios all of it is in deep trouble now as I’m doing this there’s a writer strike that’s been sort of kicked off in Hollywood because writers rightly are concerned about chat GPT large language  models largely replacing them in some cases these generative tools are going to be like a co-pilot one writer can produce dramatically more and in other cases it’s going to be like an autopilot you don’t need the writer at all anymore those are all real problems I do a lot of writing it’s a real issue however at the next level up look generative AI is going to decimate or at least disrupt all of Hollywood the entire movie Digital Content television writing production business is about to get a sea change and most of it’s going to be bad now three reasons why this is happening reason number one digital content as opposed to physical content physical book versus digital book it’s it’s a difficult business to begin with and it’s been getting worse for a long time because it’s Democratic anyone can write a book because everyone has a laptop that didn’t used to be the case you needed printers publishing houses book trucks bookstores all of that you don’t need that anymore so what has happened is it’s become let’s call it democratized anyone can do it so the Sea of books has gone up dramatically their supply everywhere but the demand is the same net net the vast majority of writers of books don’t make any money now it’s great for readers of books it’s fantastic it’s great for people who want Economies of Scale to write because everyone can play but in terms of profits it’s brutal there’s about a half the number of publishing companies there were 10 years ago now okay so that phenomenon digital content is difficult to begin with okay Hollywood doesn’t have a lot of strengths in the digital content business except for one they have what we call economies of scale based on content production now in business you can have different types of competitive strengths which means you can do things others can’t do therefore you can make money if everyone can do what you do generally speaking nobody makes much money they had a scale effect that to do a movie 50 million dollars a hundred million dollars you needed actors you needed sets you needed cameras you needed marketing budgets you know the production side of making movies and television Scale Advantage if you were bigger than a small company you had a scale Advantage because they couldn’t do what you do most companies can’t make Avengers movies too much money too much risk you need actors and sets and it’s a big deal anyone can write a book not everyone can make an Avengers movie outside of a

scale effect for production 3:23

they don’t really have that many

advantages they used to they used to

have distribution advantages where they

had lines into the theaters you know

they could put movies into theaters or

they had cable channels that’s going

away

um most there’s some power in Netflix

and over the top and cable but generally

speaking it’s kind of all going away

distribution is becoming more free form

now and then nobody has any hold on the

consumers

the consumers are like people on dating

sites they they go from person to person

to person they are not loyal at all they

date around they shop around so you’re

constantly fighting to get people’s

attention which is why you have to spend

so much on marketing every year so you

spend a lot of to create the Avengers

movie and then you’ve got to Market like

crazy because you’ve got to somehow

bring them back into the theater every

time

um very difficult business the only

strength these companies had was scale

advantages in content production

decreasing advantages in distribution

third point

what does generative AI do

it democratizes content production it

takes the cost of content production

started with text then it went to music

you can write songs like nothing pop

songs whatever

then it went to animate it then it

actually went to sort of pictures and

graphics and image generation that’s

mid-journey but it’s already moving into

video production that’s Runway

a lot of animated movies it’s already

happening so

in creating television shows movies it’s

like books anyone’s going to be able to

do it now and the cost of creation

is going basically to the cost of the

computation

now I can make a 30-minute animated

movie on my laptop one guy with not a

day of training I don’t know how to draw

I don’t know how to do stories but I can

make one on my laptop in about 25

minutes I’ll get child gbt to write the

script I’ll get mid-journey to create

the images and the characters I’ll put

it into a basic animated thing I’ll

probably use a Runway ml I can create a

20 minute animated movie

that was not possible so the one

advantage that Hollywood has which is

scale advantages and content

that’s what generative AI is smashing

directly anybody’s going to be able to

make an Avengers movie

anyone’s going to be able to make

animated movies anyone’s going to be

able to make TV shows including the

script the actors which can be AI

generated including the soundtrack the

graphics the CGI all of it

and the best case scenario is okay

you’re still famous maybe you have a

great franchise like The Avengers or

something but your main source of

competitive Powers going away

everybody’s going to do it and the worst

part is

the amount of content in the world is

going to absolutely explode which means

it’s going to be that much harder to get

people’s attention it used to be you

were competing with maybe 30 50 75

movies being released every year it’s

going to be a hundred movies a day

I could watch a

like avengers-like movie every single

day all year long so the amount of

Supply is going to go through the roof

all of that makes it worse so for

consumers it’s fantastic for Content

creators it’s fantastic anyone can make

movies now anyone can be an artist

anyone can be a songwriter anyone can be

an internet we can all do this now

but if you were trying to make money and

profits that game which was already

difficult is going to get 10 times more

difficult and I think most people aren’t

going to make it companies individuals

do well companies no so that’s kind of

how I view it going forward I’m keeping

an eye on it it’s a fascinating space my

group techno Consulting we’re a boutique

consultancy that really focuses on who’s

going to win and who’s going to lose in

digital strategy so if you have a

company that you’re thinking about your

situation or you have a digital plan if

you want to talk about it give us a call

we’ll do a quick assessment

tecmoconsulting.com and we’ll see what’s

what that’s it for me thanks for

listening