Welcome to another round of behind-the-scenes insights (for a longer version, check out my hollywood101.substack.com newsletter, which comes out every Wednesday and is now available to subscribers with archive access and bonus content!), or what’s up took place behind closed doors in Hollywood last week.
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SORA knocks on the door
OpenAI is meeting with Hollywood’s top brass this week to show them what their new SORA video generator can do. I already wrote that Tyler Perry canceled an investment in his film studios worth 800 million dollars after a private presentation. It’s one thing to watch a promo video, another to see the current (probably much more advanced) algorithm in action, which can be scaled arbitrarily thanks to the outsourcing of computing through the cloud to some server farm, so that a person can change prompts and parameters in a matter of minutes.
They say that businessmen in Hollywood have no imagination, so they need real artists, and the whole history of commercial cinema is really about the two groups playing cat and mouse with each other. Therefore, OpenAI intends to show executives what SORA can help them with in practice. Draw storyboards, produce so-called animatics (nowadays, almost everything is created in crude 3D animations)? There, AI often replaces entire studios that make a living from the extensive preparation of blockbusters. But the possibilities are countless, and basically there is no department within pre-production and post-production that would be spared.
SORA will also be available to the lay public in the second half of the year, but by then OpenAI needs to hook creators as well as executives. Therefore, she goes around dozens of directors to find one or two somewhat famous ones who will be willing to experiment with the new technology. Only then will SORA cease to be a self-serving moron and a technological exercise. It needs to be turned into a marketing tool.
And for that, some personality is needed who will take the baton of artificial intelligence and serve as a bridge between the old “stupid” cinematography and the “smart” one. It sounds crazy, but don’t doubt for a second that someone will get caught in this noose. In this regard, I like the analogy in one of the comments. “With artificial intelligence, things are turning upside down. People feel that they will always be the driver behind the wheel. However, from the point of view of their bosses, they will become draft horses, and it is the AI Horse that will crack the whip. The horse also thinks it is driving because it is the one in front, pushing its legs. But nothing is further from the truth.”
Hollywood is also running out of time. According to Deloitte’s research, YouTube easily trumps all streaming platforms in terms of viewership and importance in the lives of teenagers. TikTok, Instagram and Twitch are not far behind, so it can be seen from the statistics that user-generated content makes up more than half of the audiovisual content consumed by GenZ members.
Once SORA is released to the common people, a sea of content will begin to appear on the aforementioned social networks, and the progressive youth will devote less and less time and attention to Netflix, Max, Disney+ or movie theaters. And we don’t even have to wait for video generators, the Fake Jenna Ortega YouTube channel will soon celebrate five million subscribers, in whose short videos Jenna Ortega, Leonardo DiCaprio, Margot Robbie or Timothée Chalamet show off various body parts. These are very successful deepfakes, which in some moments will confuse even an informed viewer.
Anyone can generate similarly credible content on social networks. They don’t have to obey the strict rules of Hollywood guilds. The boundaries of what is appropriate and inappropriate will cease to exist, and if there is no copyright freestyling on American platforms, there will remain a number of corners on the Internet where you can afford to generate absolutely anything. And Hollywood will have no chance to absolutely compete with those accelerated trends.
YouTube scores
Another proof of the influence YouTube undoubtedly has on young and even younger lives is the upcoming theatrical release of the YouTube blockbuster Ryan’s World the Movie: Titan Universe in 2,000 theaters. The 12-year-old YouTuber is following in the footsteps of Taylor Swift, going all over Hollywood and showing his YouTube video widely in cinemas! Even from the trailer, it looks like a slightly better production of what appears on his channel, this time with more emphasis on story, animated inserts and effects, but when you think about it, it’s an incredible statement of how far we’ve come.
Anyone who doesn’t know Ryan Kaji should know that his parents sent him to the path of a professional YouTuber at the age of three. Cute Ryan unboxed and commented on the new toys on camera, and other parents let their kids do it. Then Ryan started experiencing other episodes of his life in front of the camera and today he has his own merch, a set of toys at Walmart and a TV series on Nickelodeon. Over 60 million people watch him on YouTube.
Even in Ryan’s early days, the guardians of morality rebelled against the fact that the parents were making a future piggy bank out of the toddler. It has gone so far that in some European countries similar activity is classified as child labor and outlawed. In the US, however, parents rush young children like this to auditions for TV commercials or series, so it’s hard to say where the boundaries of good taste and manners actually lie.
The fact remains that Ryan will be in theaters in August, and parents can take their kids to the movies to see their favorite YouTube hero. As the father of a five-year-old cricket, this seems crazy to me, but maybe I just don’t have enough business sense.
Little Ryan’s parents, unlike Taylor Swift, approached major film studios. And everywhere they got negative answers. Youtubers don’t work on the silver screen. In August, we will see how accurate these 40-year-old executives in well-cut suits currently have an estimate of the situation.
Those who haven’t moved are living
After last year’s strikes, actors lament the current state of the television industry. Anyone who survived a few months of the condition and didn’t move out of Los Angeles back to their parents is currently spending their last savings. Studios and television do not order pilots, seasons no longer have 22-24 episodes, but rather 13-18 (on streams, the average is around 7-8). Average budgets, which are $3-5 million per episode on linear TV, have dropped to $5-10 million on streaming. The exception is only a handful of AAA projects, where the budget can still climb to 20 million, but a large part is swallowed up by gimmicky post-production and the main star’s fee.
Supporting roles in series are on the decline, especially ones that you can comfortably live off of for a few seasons. Today, the show has a maximum of five main and supporting regulars, and the rest rotate like socks, leading to further savings. The actors, as a guild, have pushed for better conditions in their strikes, but only an increasingly tiny fraction of their community can profit from it.
Shorter seasons and a lower number of series means that content shrinkage will be felt by all professions. Older viewers won’t even notice, they haven’t had time to watch everything. And young people feed themselves on social networks with influencers. I apologize that today’s reading is not very optimistic. Not every day is blessed.
How much does Paramount cost?
Although I will focus more on shareholder chess at Disney after Easter in the newsletter, it is quite possible that Iger will survive without losing the bouquet, and the real fun will only be at Paramount, as I predicted. Shari Redstone has majority voting power but is a minority shareholder. This creates considerable tension, as it has currently turned down $11 billion from the Apollo fund, which offered this generous amount just for the movie studio itself.
What’s the catch? That the shareholders, and therefore Shari, would be left with the rest of the company’s torso, which would need to be properly taken care of. We are mainly talking about linear TV stations, the streaming platform Paramount+ and other not very promising bits. On the other hand, the eleven billion is above the market value of the entire company and above David Ellison’s Skydance offer.
But Ellison was offering the money directly to Shari Redstone for her National Amusements, which is logically a better scenario for her because it would save her from current debt. Shari is thus holding the rest of the shareholders and the management of the company hostage, which everyone around her quickly stops liking. In addition, these dances are quite a lot of practice with the already low shares of Paramount, in which several very influential people have put their money. The pressure is on and several apocalyptic scenarios are currently hanging in the air. If Paramount is not sold as a whole and there is a so-called bear portioning, we will analyze the fate of the famous studio in a separate post.
Free movies!
I almost missed it (here I would like to thank Tomáš Vyskočil for the echo) that on April 2nd, the Warners are launching a new station Warner TV for free in DVB-T2, where films and series from their production will be broadcast in SD resolution (the channel will be broadcast as part of paid cable in HD). Viewers can look forward to thematic cycles, but also older series from HBO production.
Sony is still not preparing its own VOD platform, but it is stepping significantly into the segment called FAST (Free Ad-Supported TV – free content interspersed with advertisements), where it will offer 50+ themed stations in Europe, where its cult series will run round and round. Unfortunately, as in the case of Paramount’s Pluto TV, FAST will again elude us, because in the first wave there are only Great Britain, France, Germany, Spain, Italy, Sweden, Denmark, Norway and Finland.
Wider sidewalks and bike paths
Los Angeles has announced an ambitious plan to revitalize Hollywood Boulevard, the famous street that includes the legendary Walk of Fame. What can tourists look forward to? Wider sidewalks, more bike lanes and fewer cars. So I have to say for myself that I have been there three times in total and in recent years there is not so much a problem with cars (you can drive along Hollywood Boulevard, but really only with a step), because they usually move to the overpriced parking lots in the side streets. If you’re tripping over something, it’s the homeless and beggar mascots who, in their costumes and masks, stand next to various stars and want to take a picture with you for a few dollars.
Half of the people walk here with their noses in their mobile phones, the other is looking at the ground and checking the stars, so the risk of a collision is literally at every meter. Revitalization will cause only one thing, the locals will avoid this place even more and you will really only meet cross country people and tourists here. If this is the intention of the city, then the illusion of a cultural open-air museum will be complete. Except for the homeless, but that is the problem of the entire wider agglomeration.
In one sentence…
Martin Scorsese settled out of court with the screenwriter and producer of the Operation: Fortitude project. They paid him 500 thousand dollars to help them “move” the project in Hollywood. After 15 months, they ran out of patience and began to sue each other. Scorsese’s lawyers argue that projects will easily spend several years in development hell and that none of the directors approached by Scorsese were interested. And that the plaintiff owes Márty another half million for the work done. This is also how poets lose their illusions.
The Golden Globes will be on CBS for the next five years. The question is who will own CBS at that time, since it falls under Paramount, whose current lifespan is calculated (see above) more like weeks, months at the most.
After Margot Robbie, Warners also commit Timothée Chalamet to a first-look deal for several years. A well-paid contract will bring another reliable cash cow into their stable. Warners is also investing in the Japanese market, where they want to participate in anime films and series. The fact that Max will soon finally arrive in Asia will also play a role in this, replacing the archaic HBO Go here.
After lengthy negotiations, SAG-AFTRA approved by a 95% majority the wording of the contract with the television animation segment for the next three years. Here, too, financial guarantees and the controlled deployment of artificial intelligence were at stake.
MIPTV, one of the most important film markets, which has been held in parallel with the Cannes Film Festival for more than sixty years and has witnessed a number of legendary deals and catches, will move to London from next year. MIP London will take place in February 2025 and will be held concurrently with the increasingly important London Screenings event. It is especially annoying for those executives who liked to warm themselves on the French Riviera, but MIPTV has been declining for a long time and Covid gave it a blow of mercy. In London, the market will merge with other events and will be more of a networking opportunity than a place to hunt for new films.
