Right now the deal is structured as Disney pays OpenAI. That's going to invert.
Once OpenAI pays Disney $3B/yr for Elsa, Disney is going to go to Google and say, "Gee, it sure would suck if you lost all your Disney content." Google will have to pay $5B/yr for Star Wars. And then TikTok, and then Meta... door to door licensing.
Nintendo, Marvel, all of the IP giants will start licensing their IPs to platforms.
This has never happened before, but we're at a significant and unprecedented changing of the tides.
IP holders weren't able to do this before because content creation was hard and the distribution channels were 1% creation, 99% distribution. One guy would make a fan animation and his output was a single 5 minute video once every other month. Now everyone has exposure to creation.
Now that the creation/consumption funnel inverts or becomes combined, the IP holders can charge a shit ton of money to these platforms. Everyone is a creator, and IP enablement is a massive money making opportunity.
In five years, Disney, Warner, and Nintendo will be making absolute bank on YouTube, TikTok, Meta platforms, Sora, etc.
They'll threaten to pull IP just like sports and linear TV channels did to cable back in the day.
This will look a lot like cable.
Also: the RIAA is doing exactly this with Suno and Udio. They've got them in a stranglehold and are forcing them to remove models that don't feature RIAA artists. And they'll charge a premium for you to use Taylor Swift®.
Anyone can make generic AI cats or bigfoot - it's pretty bland and doesn't speak to people. But everyone wants to make Storm Troopers and Elsa and Pikachu. Not only do teenagers willfully immerse themselves in IP, but they're far more likely to consume well-known IP than original content. Creators will target IP over OC. We already know this. We have decades of data at this point that mass audiences want mass media franchises.
The "normies" will eat this up and add fuel to the fire.
Disney revenues are $90B a year. I would not be surprised if they could pull a brand new $30B a year off of social media IP licensing alone. Same for Nintendo and the rest of the big media brands. (WBD has a lot more value than they're priced at.)
>Now that the creation/consumption funnel inverts or becomes combined, the IP holders can charge a shit ton of money to these platforms. Everyone is a creator, and IP enablement is a massive money making opportunity.
This would be worrying if the content was 1) actually good or 2) not freely available. Trying to charge premiums for slop never works. Just ask McDonald's 2-3 years back. The damage to the Star Wars brand shows this isn't a long term strategy.
The 2nd issue on animation slop is the human element. We already made it very cheap for people to make content. No amount of Mickey or Star wars is gonna undo the fact that people like looking at other people. Animation slop will find its audience, but it's not gonna overthrow TikTok with real(ish) people making people slop.
If Disney tries to pull out of Google, they will double down on Shorts. This won't work on most companies. It's a best a nice hook into Disney+.
> This would be worrying if the content was 1) actually good or 2) not freely available.
The content is not freely available. You pay for it with ads or premium subscriptions. There is a massive amount of money being passed around behind the scenes.
When IP holders cut off Google's ability to host IP content, 50+% of YouTube immediately dies overnight.
Looking at the top videos on YouTube this week, 7 of the top 10 are all "Pop IP" content: Candy Crush the Movie, Miley Cyrus, "I wanna Channing All Over Your Tatum", Superman Drawn, Star Wars Elevator Prank, We are World of Warcraft, Red Bull.
People love and drown themselves in pop culture and corporate-owned IP. Whether that's music, games, anime - they love corporate-owned IP.
If this content gets pulled en masse, YouTube is fucked. YouTube has been getting all of this for free. That's something that could be done today, but it's just non-obvious. When you package that with the "creation enablement", it's a packaged good that can be licensed or sold enterprise-to-enterprise.
Disney is about to wet their toes. Nintendo has already been experimenting with it. The concept is right there in front of them, and as distribution channels and content creation merge into one uniform thing - it'll be obvious.
> The damage to the Star Wars brand shows this isn't a long term strategy.
To be clear, this was made by some of the top humans in their field. And despite massive critical panning, it did print money for Disney (perhaps at the cost of long term engagement/interest).
> The 2nd issue on animation slop is the human element.
It's the difficulty, cost, time, talent element.
People consume more human content because more human content is created. Orders of magnitude more. It's easy.
Vivienne Medrano, Glitch Productions, Jaiden Dittfach, and many others have minted huge franchises on YouTube - views, merch, Amazon/Netflix deals, etc. The problem is that it takes them ages to animate each episode, whereas filming yourself on your smartphone is quick, easy, accessible, affordable, low-effort, low-material, and low-personnel.
Kids on twitch are watching each other become anime girls and furries with VTuber tech. They're willingly becoming those things and building fantasy worlds bigger than their public face identities. We just haven't had the technology to enable it at a wide scale yet.
>The content is not freely available. You pay for it with ads or premium subscriptions.
Okay, free with ads is "free" to consumers. That will get swamped by tiktok. Subscription is premium. People won't pay for slop. Those are both covered.
>There is a massive amount of money being passed around behind the scenes.
Yes. But who's making a profit? You can only shuffle money for so long, and we're hitting the breaking point of that. Ads won't invest into platforms they suspect are filled with bots and don't give ROI. Companies won't invest once saying "AI" isn't a get rich quick scheme. Customers won't invest once they run out of money.
It works, until it doesn't. Then it's suddenly freefall and people will act like they didn't hear creaking for 5- 10 years.
>When IP holders cut off Google's ability to host IP content, 50+% of YouTube immediately dies overnight.
YouTube isn't really known for "IP content". That debate ended in 2010 with Viacom. They in fact rampantly remove traces of IP content.
Meanwhile, they have a monopoly on video hosting and control payouts in an opaque way to millions of non-IP creators. unless you think it's the end of premium media as we know it, Disney is still going to host trailers on YouTube and Vevo will host music videos. There's no reason to go anywhere. Disney+ and YouTube can exist simultaneously.
>To be clear, this was made by some of the top humans in their field. And despite massive critical panning, it did print money for Disney (perhaps at the cost of long term engagement/interest).
Yeah, in complete agreement. Short term monies, long term damage. Media has a "lingering effect" where results on the prequel will pass into the sequel and vice versa. So you can still have a profitable but panned release simply because previous movie was that well received.
>It's the difficulty, cost, time, talent element. People consume more human content because more human content is created. Orders of magnitude more. It's easy.
Do you think that if we had the same amount of animation as we did live action content that they'd be consumed equally? I'm a huge animation fan and very skeptical.
Even in art spaces, people will engage more with the presence of a human face. Females more, but even males get a noticeable boost You can chalk it up to lust or familiarity or anything else, but there seems there's some deeper issue at work than simply "there's more live action slop for now".
If we do get more animation slop, I think it will veer a lot more towards hyperrealism instead, for similar reasons. I always see it as uncanny, but it doesn't seem to hinder as much on others. It'll just be trying to mimic live action at the end of the day.
>Kids on twitch are watching each other become anime girls and furries with VTuber tech. They're willingly becoming those things and building fantasy worlds bigger than their public face identities. We just haven't had the technology to enable it at a wide scale yet.
Sure. Animation is more engaging with kids. Kids aren't profitable, though. Their parents are. Unless its with ads, but advertising targeting kids has so much red tape.
I dont see a profitable model out of a media empire focusing on kids. Even Nintendo gets a lot of its money off of merchandising despite selling premium games with rare sales.
Right now the deal is structured as Disney pays OpenAI. That's going to invert.
Once OpenAI pays Disney $3B/yr for Elsa, Disney is going to go to Google and say, "Gee, it sure would suck if you lost all your Disney content." Google will have to pay $5B/yr for Star Wars. And then TikTok, and then Meta... door to door licensing.
Nintendo, Marvel, all of the IP giants will start licensing their IPs to platforms.
This has never happened before, but we're at a significant and unprecedented changing of the tides.
IP holders weren't able to do this before because content creation was hard and the distribution channels were 1% creation, 99% distribution. One guy would make a fan animation and his output was a single 5 minute video once every other month. Now everyone has exposure to creation.
Now that the creation/consumption funnel inverts or becomes combined, the IP holders can charge a shit ton of money to these platforms. Everyone is a creator, and IP enablement is a massive money making opportunity.
In five years, Disney, Warner, and Nintendo will be making absolute bank on YouTube, TikTok, Meta platforms, Sora, etc.
They'll threaten to pull IP just like sports and linear TV channels did to cable back in the day.
This will look a lot like cable.
Also: the RIAA is doing exactly this with Suno and Udio. They've got them in a stranglehold and are forcing them to remove models that don't feature RIAA artists. And they'll charge a premium for you to use Taylor Swift®.
Anyone can make generic AI cats or bigfoot - it's pretty bland and doesn't speak to people. But everyone wants to make Storm Troopers and Elsa and Pikachu. Not only do teenagers willfully immerse themselves in IP, but they're far more likely to consume well-known IP than original content. Creators will target IP over OC. We already know this. We have decades of data at this point that mass audiences want mass media franchises.
The "normies" will eat this up and add fuel to the fire.
Disney revenues are $90B a year. I would not be surprised if they could pull a brand new $30B a year off of social media IP licensing alone. Same for Nintendo and the rest of the big media brands. (WBD has a lot more value than they're priced at.)
This is the end game. Do you see it now?