AI is supposed to be Hollywood’s next big thing. What’s taking so long?

Wendy Lee and Samantha Masunaga, Los Angeles Times (TNS)

Earlier this year, OpenAI and other artificial intelligence companies wooed Hollywood studios with the futuristic promise of AI tools that they said could help make the business of creating movies and television shows faster, easier and cheaper.

What the tech companies wanted was access to troves of footage and intellectual property from series and films that they could use to train and support their complex models. It’s the kind of thing AI technology needs to feed off of in order to create stuff, like videos and script notes.

So far though, despite all the hype and anticipation, not much has come of those talks.

The most prominent partnership was one announced last month between New York-based AI startup Runway and “John Wick” and “Hunger Games” studio Lionsgate. Under that deal, Runway will create a new AI model for Lionsgate to help with behind-the-scenes processes such as storyboarding.

But none of the major studios have announced similar partnerships, and they’re not expected to until 2025, said people familiar with the talks who were not authorized to comment.

There are many reasons for the delay. AI is a complicated landscape where regulations and legal questions surrounding the technology are still evolving. Plus, there’s some skepticism over whether audiences would accept films made primarily with AI tools. There are questions over how studio libraries should be valued for AI purposes and concerns about protecting intellectual property.

Plus, AI is highly controversial in the entertainment industry, where there’s widespread mistrust of the technology companies given their more “Wild West” attitude about intellectual property. The mere mention of AI is triggering to many in the business, who fear that text-to-image and video tools will be used to eliminate jobs.

The Lionsgate-Runway deal, for example, set off a wave of concern among some creatives, many of whom quickly responded to the announcement by calling up their agents. The Directors Guild of America said it has reached out to Lionsgate and plans to meet with the company “soon.”

The threat of AI was one of the key concerns raised by actors and writers last year when they went on strike for months. They pushed the major studios to add protections in their contracts, such as requiring studios to get permission from actors to create digital replicas of them and compensate them when they’re used. Any deals made would need take those restrictions into account.

“Companies across the board, from a legal perspective, they’re being cautious about how do we harness this responsibly?” said Javi Borges, who leads a team that advises entertainment and media companies for professional services firm EY. “It’s one of those things where AI is the big buzzword right now, but everybody’s trying to understand what the opportunity is to harness it and how it can help the organization, and how it can help the business that they’re in.”

The Alliance of Motion Picture and Television Producers, which represents the major studios in labor negotiations, declined to comment for this story. The studios themselves, including Netflix, Walt Disney Co. and Warner Bros. Discovery, either declined to comment or did not respond to requests.

AI is attractive to studios at a time when they’re looking for ways to cut costs as streaming continues to drive cord cutting and the theatrical box office struggles to come back from the COVID-19 pandemic.

Last month, Warner Bros. Discovery said it would use Google AI technology to power captions on unscripted programming, “significantly reducing production time and costs.” Warner Bros. Discovery and Disney are in talks with OpenAI to potentially license video footage from their libraries, according to two people familiar with the matter who declined to be named. OpenAI declined to comment.

On Thursday, Meta said it had been working with Los Angeles-based horror producer Blumhouse on a pilot program aimed at getting creative industry feedback on its Movie Gen AI tools.

Blumhouse selected three filmmakers, including Casey Affleck, to try out the tools and use the AI-generated video clips in larger pieces. The AI models allowed the directors to “quickly express their creative ideas” and helped them explore possible background audio and sound effects generation, Meta and Blumhouse said in a joint statement. Blumhouse founder and chief executive Jason Blum said in the statement that the company “welcomed the chance” to test the technology and give notes while it was still in development.

But one thing standing in the way of more deals getting done is that there’s no universally accepted standard for what a film and TV library might be worth to an AI company.

In Hollywood, a studio’s vault is valued based on the popularity of the material. But those metrics may not be as relevant to AI companies, which are seeking a wide variety of data to train their AI models, rather than just IP that they can exploit. For that reason, an obscure, experimental documentary may be more valuable than a popular franchise film, said two people who are familiar with how the technology works.

“Savvy, forward-looking executives at companies that own the world’s most valuable IP are thinking about the long-term value of what they control,” said Dan Neely, co-founder and chief executive of Vermillio, which operates an AI rights management platform. “But without an existing pricing standard, this is an existential moment that major IP holders must get right.”

Additionally, legal questions remain regarding how AI models are trained and how talent should be compensated. Already, there have been several lawsuits filed against AI companies, including Runway, from creators who allege their work was scraped and used to train models without their permission. Several music labels and publishers also sued AI-related businesses.

OpenAI’s position on copyright disputes has given some in Hollywood pause. The company has expressed an expansive view of “ fair use” doctrine, which allows for limited use of copyrighted material without the owner’s permission. OpenAI says entities that don’t wish to participate in AI training can opt out, but this is of little comfort to copyright owners.

In May, OpenAI sparked controversy when Scarlett Johansson accused the company of releasing a chatbot’s voice that sounded similar to hers after she’d rejected its previous overtures. OpenAI said Johansson’s voice was not used for the chatbot but took it down anyway.

“Potential deals are in the shadow of copyright uncertainty and the harsh reception of creatives and consumers who want to continue the history of human centered storytelling,” said Duncan Crabtree-Ireland, national executive director and chief negotiator for SAG-AFTRA, in an email.

Major Hollywood studios haven’t sued the AI companies yet, but some industry observers say not to rule it out.

Meanwhile, state and federal politicians are trying to pass legislation to address some of the concerns the public has raised about AI. Last month, Gov. Gavin Newsom signed bills into law that fight against the spread of deep fakes in political ads, but some people in Hollywood say more needs to be done.

Lionsgate’s deal with Runway provides some clues for how future AI agreements with studios might work.

Under the deal, Runway would create an AI model for Lionsgate that would be trained on a small number of titles and used by the studio and designated filmmakers. Lionsgate’s model would be used to make production and marketing processes more efficient, not to replicate likenesses of actors, a person familiar with the deal said. The Lionsgate data would also not be used to train Runway’s other AI models.

No money exchanged hands in the deal. Lionsgate and Runway declined to comment on the financial terms.

“I think we’re now coming to terms that this is a very powerful technology indeed, but it’s not a magical black box that makes movies with no control,” said Runway Chief Executive Cristóbal Valenzuela. “These are great tools for artists, and many of those are already embracing this and understanding that they are game changers for the craft.”

As studio talks go on, AI companies are working to get their tools in the hands of more creators, sometimes with financial incentives. Already, some creators are putting AI to work by using text to video tools for music videos and to apply fantastical backgrounds to their YouTube content.

But it remains to be seen how quickly that will lead to broader acceptance and deals at the mainstream studios.

“To me, it’s going to come down to money at the end of the day,” said one executive who was not authorized to comment. “If the check is large enough, the studios are not going to blink at it, and then they’ll deal with the headache of sorting out the profit participation and whatnot.”

©2024 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.