The New Stack of Entertainment, Tensions of the AI Age, & Navigating Cambrian Explosions
Let’s explore some fun albeit heretical Hollywood possibilities, face key tensions, and talk about how to stay grounded with customer needs.
Edition #17 of Implications.
This edition explores implications around: (1) the transformation of entertainment and transcending the heretics of Hollywood, (2) more notable tensions around creativity in the age of AI, (3) how to navigate the insane speed of technical innovation during Cambrian explosions, and (4) thoughts on investing in AI — with some surprises at the end, as always.
The last edition explored what I’ve come to call “the era of abstraction” and explored the many implications of a world where everything is summarized and sourced for us. Hope you check it out. Also, a quick thank you: We’ve passed 27,000 readers of this once-per-month often-written-at-30,000-feet analysis. Really appreciate your feedback and spreading the word for this fun and grueling exercise.
If you’re new, here’s the rundown on what to expect. This ~monthly analysis is written for founders + investors I work with, colleagues, and a select group of subscribers. I aim for quality, density, and provocation vs. frequency and trendiness. We don’t cover news; we explore the implications of what’s happening. My goal is to ignite discussion, socialize edges that may someday become the center, and help all of us connect dots.
On the Transformation of Entertainment
What company will be the Pixar of the AI era? What talent agency will be the CAA of the AI era? How fast can the entertainment industry evolve to natively leverage AI, and what parts will be disrupted by the industry’s own ambivalence? Or are all of these questions myopic…and should we anticipate a wave of entirely new categories of entertainment?
We are starting to see material adoption of AI tools across many industries, including media and entertainment. No doubt, these tools will transform the processes behind generating content. But what entirely new genres of content might emerge? The platform shift to AI-based workflows might give rise to entirely new types of companies that transform entertainment as we know it - from actor representation, Hollywood economics, consumption devices and experiences, to the actual mediums of entertainment themselves. Let’s explore just a few of the more edgy implications:
Real-time open worlds and “imagination extension” emerge as a new genre.
As we dream, our minds create intricate and fascinating immersive experiences that we’re unable to distinguish from reality until we wake up. Much like dreamland, the combination of immersive devices and real-time immersive video rendering (likely less than a decade away!) will capture our attention in profound ways. Imagine a fully immersive virtual reality experience where any prompt yields a real-time-rendered fully immersive environment and an AI-powered storyline that passively unfolds until you actively insert a new prompt. Are these movies, games, or some entirely different variant of simulation-entertainment that extends our imaginations?
Generative AI is getting to the point where games will become a series of programmed storylines that unfold in a unique way every single time for each unique user in real time in extraordinary and personalized ways. I expect more complex stories that require collaboration to solve, and the stack of game developers will need to evolve to account for these opportunities.
Heretical Hollywood Possibilities
Evergreen Actors: Will there be a timeless Tom Hanks or Nicole Kidman who continues to appear in entertainment experiences for decades or centuries to come? Just the prospect prompts all kinds of questions around the mechanisms required to navigate such a world. No doubt, voices and likenesses will all need representation, as they always have, but with stronger legal teams and more aggressive and future-proofed contracts.
Self-Serve Casting: Assuming a viable legal and economical model, the general availability of every person and character’s IP can be made accessible using a similar experience to selecting a font. Of course, every piece of IP could have an application process and a talent agent like interface to negotiate terms of use. But the self-serve nature is fascinating to me and could fuel an explosion of ideas made to happen.
Extras On Demand: Will the role of extras in any form of entertainment be the first piece entirely replaced by AI? Non-human extras are already placed digitally in many instances, and it seems clear that all of this will become rather turnkey. But the unions will also have an important say in how this all materializes - especially if the likeness of actual people is being used.
Personalized Storylines: “Choose your own adventure” is an incredibly empowering value proposition that has been validated in the gaming world. We should prepare for this concept to permeate general entertainment but perhaps with more constraints than expected. After all, a huge appeal of mass entertainment is a shared experience that we can all talk about with friends and co-workers.
If Disney were founded today, how might it all work?
First off, story is everything. Nothing beats great characters and an emotional journey that speaks to our humanity. The creativity that is effective is creativity that moves us, and the human role in bringing soul to content will become more important (not less). However, a radically new stack for producing entertainment is likely to emerge in the era of AI.
Open-sourced R&D: New studios for character development emerge. And a carefully developed set of storylines are developed for the established (or acquired) characters that ordinary creative people with ideas get to play and create content with (within boundaries of an established story). As they create and submit content, contributors gain a percentage of exposure to future earnings. The best writers and creators will be attracted by both the economics as well as the creative control.
More Versatile Management & Marketplace for IP: Every actor, musician, or other holder of IP is invited to enlist their IP along with their terms to be incorporated by creators using GenerativeAI models integrated into creator tools. Every piece of generated content gets content credentials to track the IP used, the models used, and the contributors for attribution and compensation purposes.
New Forms of Validation Reduce Risk: The performance of new content across quick cycles of “test audiences” could yield both feedback as well as signal for what content gets marketing support and amplification. The “hits” get distribution deals with the best distributors in the business.
A New Stack Emerges: No doubt, creators will leverage GenerativeAI models to generate content — as well as world class creative tools to edit their content — alongside footage they capture themselves, content acquired on marketplaces, and content created or generated by other collaborators. I also anticipate entirely new tools that manage IP, help creators adhere to storylines, assist creators in working collaboratively, and track attribution of contributors and distribution of proceeds.
Tensions of Creativity in the Age of AI (Part 2)
I have a few more tensions that are top of mind for me - adding to last month’s edition - after spending a day in LA with a group of leaders from the entertainment industry discussing the impact of AI on their world - from production, post-production, and actor IP, to distribution. Here are a few that have surfaced during conversations with independent creative professionals as well as leaders of some of the world’s largest brands.
No doubt, the ability of generative models to generate an infinite number of variations of every asset used in marketing — and perhaps eventually entertainment and media — based on our own preferences and interests will usher in a more personalized digital world. The significance of the shift from “generalized media” to “personalized media” cannot be overstated. Our digital worlds will soon be tailored to our interests in unfathomable ways. On the one hand, personalized experiences are likely to make marketing more effective. Brands have a precious opportunity to make us all feel “known” in our every interaction. But with the deluge of personalized content — especially if we all end up having different endings of the next Succession or great mini series — comes the death of shared experiences. Songs or shows feel special when they are shared experiences we can discuss with friends and co-workers. Therefore, I also anticipate a purposeful resistance against this trend. I am fascinated by this tension between personalized experiences and shared moments.
Our thinking is a bit too linear when we assume that advances in generative video and other mediums will ONLY speed up existing workflows in producing entertainment as we know it. They will, but they will also unleash new genres of entertainment that are probably more akin to the rise of Pixar-style content that was strikingly different from traditional animation. A lot of leaders in Hollywood are only focused on the application of these tools — and the potential disruptions — within their existing workflows. But I am curious: What new short-form genres might emerge as a result? Will we have new social media creation tools that insert ourselves and our friends as characters and generate short 30-second episodes with a GPT-generated storyline? Will brands start to embrace the quirkiness of generativeAI as opposed to try and emulate reality, and produce content that fascinates us in new ways?
A common conversation I have with people in Hollywood as well as big brands is what creative departments and production teams will do more and less of in the era ahead. When people harp on the necessity for humans to generate great stories, I often ask why so much out of Hollywood is either a sequel or a repeat of a familiar plot or playbook. Their answer, of course, is risk. It’s a lot safer to continue an existing franchise than it is to chance a new one. “But what if the cost of movie making goes down dramatically, would you test more genuinely new stories in the market?” The answer is always yes. If it was cheaper to edit, to translate, to color-correct, to capture b-roll, etc, then studios could take more risk greenlighting new ideas. I anticipate a new world where SUBSTANTIALLY MORE stories get the chance of being told when the mundane repetitive work of production gets refactored by 10x or more. In such a world, humans will double-down on the core “story making” that conceives new franchises in Hollywood and the iconic campaigns that define modern-day brands.
It is also important to remember, GenAI is just another source of “raw footage” (albeit a unique one) that is used to craft a story. But the “craft” part (the editing, the taste, the precision of timing and style) only becomes more important with the abundance of content and every brand flooding the zone. The “Hollywood vs. AI” narrative is a red herring. The world’s greatest makers and storytellers will gain superpowers and become more successful with AI as opposed to being replaced by it.
Another realization anyone in the space of AI content creation is having: Every brand will soon flood the zone with content. Endless blog posts to hack SEO, endless variations of content to A/B test and retarget customers across the web, and the list goes on. With the coming abundance and reach of new content, how will we adjust? The real question here is one of human behavior: What happens when something remarkable becomes abundant? When our favorite restaurant or coffee house becomes a chain, or a new social product becomes ubiquitous, we tend to crave something new…something more scarce. Why? It’s a natural desire to immerse ourselves in stories that move us and express identity through uniqueness. When something seems ubiquitous and commoditized, we crave more craft and meaning. I think it is important to remember in the age of AI that natural human tendencies always overpower technical innovations.
In the era ahead, we are going to expect much better digital experiences than ever before. The bar will go up massively for every brand and storyteller. We are going to seek meaning and scarcity in our digital lives, and this will fight against the temptations of many companies and industries to simply flood the zone. A central challenge of this new age will be to leverage the advantages and efficiencies of Generative AI while retaining the human soul within our work.
The faster your industry changes, the more you must ground yourself with customer empathy and natural human tendencies.
Reflecting on what has surprised me most over the last year or so: Speed. I have been blown away by the “clock speed” of AI-centric companies and the cadence of disruption across AI models. I use clock speed because it is as if every cycle is faster, a day’s progress in a minute. Not only do companies keep outperforming each other, they keep refactoring and reimagining their approach. We see specialized models being replaced by open-source models, that are being replaced by proprietary multi-modal models, that are threatened by local open-source models, etc. Every week yields new breakthroughs, and the one thing we can be sure about is that our assumptions for who "wins" will be wrong. We're in the middle of a Cambrian explosion, and we need to be especially flexible, imaginative, and grounded with our customers to stay on the right course.
The pulse of customers is our compass through platform shifts. If you’re operating in an industry like mine, every week yields exciting breakthroughs alongside the task of evolving your strategy to leverage them. At times, we’re all liable to get lost in timeframes and horizons - unsure of when a key technology will be commercially ready or relevant and how to plan accordingly. Time and time again, I find the right path is illuminated by grounding yourself with customer empathy. What problems are your customers suffering from today? What tendencies are governing their work and purchase decisions? There is no greater gravitational force in consumer behavior than present tendencies. While we tend to get excited by new research and future opportunities from new tech, the truth is we must follow customers more than move them. We must make our products familiar for them to be utilized, and retrain customers very selectively. When you’re uncertain about the future, ground yourself with your customers.
Ideas, Missives & Mentions
Finally, here’s a set of ideas and worthwhile mentions (and stuff I want to keep out of web-scraper reach) intended for those I work with (free for founders in my portfolio, Adobe folks…ping me!) and a smaller group of subscribers. We’ll cover a few things that caught my eye and have stayed on my mind (including recent themes and new questions around investing in AI from conversations — and debates — with angel and VC investors), as well as other observations. Subscriptions go toward organizations I support including the MoMA and the Cooper-Hewitt National Design Museum. Thanks again for following along, and to those who have reached out with ideas and feedback.
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