Actors STRIKE v. AI, Streaming + AI Hype Cycle Ends Already?
More OpenAI lawsuits + Violent Cinderella.
Happy Monday, everybody! Everyone’s striking and suing!
The Agenda:
Opinion/Links
Actors STRIKE v. AI, Streaming. [Hollywood, Streaming, AI, IP]
But the studios’ POV? [Hollywood, Streaming, AI, IP]
The consumer has total control now. [Hollywood, Media, Streaming, IP]
Mission: Impossible below (high?) expectations in US. [Hollywood, IP]
Amazon wins the US streaming market? [Streaming]
AI hype cycle ends already? [AI, IP]
Sarah Silverman, others sue OpenAI, others. [AI, IP]
FTC investigates OpenAI… [Tech Regulation, AI]
…while lawmakers grill FTC. [Tech Regulation]
Creative labor is struggling globally, too. [South Korea, Japan, Streaming]
Wolverine wears his comic costume in Deadpool 3. [IP]
Willy Wonka and Godzilla return. [IP, Japan]
Violent Cinderella. [IP]
A victory for crypto v. regulation? [Crypto]
Manga
Business Samurai #83: “Maybe I’ll look stupid, but you’ll look unprofessional.” [Coffee Distribution Arc #35]
Monday Motivation
What they forget to mention about "overnight success"… (Y Combinator)
Superhuman strength? It happens when someone f*cks you over.
Thank you for your support of Cross Platform. Please consider subscribing (if you haven’t done so already) and sharing with your colleagues, friends, and family.
Opinion/Links
Hollywood, Streaming
Actors STRIKE v. AI, Streaming [Hollywood, Streaming, AI, IP]
Hollywood actors decided to join Hollywood writers and STRIKE vs. the studios, streaming, and AI. First actor-writer strike since the 1960’s when Ronald Reagan was prez… of the Screen Actors Guild. Here’s a written summary and a video summary. Points I want to discuss:
Tending to her flock, SAG-AFTRA (actors union) president The Nanny Fran Drescher says they are ready to strike for six months.
One of the sore points for both actors and writers are residuals. But the payment scheme for creatives post-streaming is more up-front payments, fewer residuals, as popularized by Netflix. Creatives want more transparency in which streaming shows do well to bolster their negotiating power.
While streamers, studios are in a very tough spot financially (more below), the pushback from labor is that Hollywood CEOs are still making a ton of money.
AI, the other elephant in the room, and reportedly the area where actors and studios are having the most trouble finding common ground. Most noticeably, apparently the studios proposed that background actors get scanned for AI, for one day’s pay. Effectively the studio owns their likeness. I don’t think that one went over well with the actors.
My POV:
EVERYONE IS FIGHTING OVER IP. But new tech can also deal a blow to the executive class. More in the next topic, but suffice it to say, as advances in HW, SW, and mobile Internet lower the barrier to entry for individuals and businesses globally, resulting in everyone now competing with everyone else, businesses want to own IP to differentiate. But who creates the IP, or owns its likeness?
What to do? For Cross Platform’s audience, which is comprised of both creatives and businesspeople. If the future is a hollowing out of the middle in multiple industries (is cybersecurity one exception?) and you are in the middle and can’t move up, either you 1) become highly differentiated and the market is willing to pay you significantly (really hard), or 2) vote for regulation (let’s see what happens), or 3) both.
[Everything is competing with everything else; The importance of IP in the digital economy.]
But the studios’ POV? [Hollywood, Streaming, AI, IP]
Meanwhile, media execs got together at Sun Valley, Idaho to discuss AI and streaming as well. Several things happened around this time:
Prior to the actors strike, a studio exec told Deadline re: the striking writers: “The endgame is to allow things to drag on until union members start losing their apartments and losing their houses[.]” This probably didn’t go over well with labor, either.
Also prior to the strike, Disney CEO Bob Iger’s contract was extended for another two years.
Iger granted an interview with CNBC, prior to the actors striking. Re: the writers strike and a then-possible actors strike, Iger said their level of expectation is not realistic, they are adding to the challenges that the business is already facing.
Worth noting per Richard Greenfield, “[e]very part of [Disney’s] business is facing real headwinds.”
Media execs are concerned with AI as well. Ex. more recently, media mogul Barry Diller said “a group of us” are going to sue re: copyright infringement. I guess they can get in line (see below).
Lastly, I looked up any voluntary pay cuts among US CEOs, and here’s a recent list. All in tech and finance, none in pure media.
My POV, again, is that everyone is fighting over who owns the IP. Worth noting that streaming is generally a loss-making business currently. The problem is that many entertainment co.’s had to enter it, given secular shift in consumer behavior as they spend more time online. Even if you blame Netflix for starting the streaming wars, I think it had to go globally with its own IP - if it stayed as a simple online distribution platform for other studios’ IP, it would be under those studios’ thumbs.
How to make streaming profitable? Netflix is purportedly the only profitable player, but I wonder how profitable Netflix would be if it paid higher residuals to the striking creatives. In paying for shows up front but owning most of the backend, Netflix effectively owns all this IP, and, like non-streamers Sony, Mattel, and Nintendo, is going cross-platform with the IP, since IP is what consumers care about and are willing to pay for (more below). Also, if streamers become more transparent with IP performance data, then they are more beholden to creatives. TBH this reminds of me of social media and its black box algorithm v. influencers.
Meanwhile, I think with the proposal of scanning actors’ likenesses, streamers are more and more approaching a medium that can be profitable: gaming.
[Entertainment is approaching gaming.]
The consumer has total control now. [Hollywood, Media, Streaming, IP]
According to former CNN President Jon Klein, the consumer is now embracing the idea that they have “total control in the media ecosystem.” The strongest brands are “the shows themselves, and often their creators.” I’ve cited the behavior of “churn and return” before, and it’s been documented elsewhere.
This is probably why streamers are so intent on owning IP.
[The importance of IP in the digital economy.]
Mission: Impossible below (high?) expectations in US. [Hollywood, IP]
Mission: Impossible - Dead Reckoning Part 1 opened this past week, and it’s doing well and got great reviews, but below US box office expectations. The audience supposedly skewed older. I’ve heard online chatter that Tom Cruise is the last real movie star, but I think IP still overshadows. Top Gun is IMO a superhero movie with jets. I’m speculating but re: younger audiences, if they wanted to watch someone famous doing death-defying stunts, they could find that for free on Tik Tok, Instagram, etc.
[Everything is competing with everything else.]
Amazon wins the US streaming market? [Streaming]
Last week I mentioned Amazon reviewing the performance of its streaming biz, and interestingly, some news has since come out that Amazon is the #1 streamer in the US. Also, Max (formerly HBO Max) ranks higher than Disney+ in this report. I wonder how much these rankings fluctuate given “churn and return”.
AI, Tech Regulation
AI hype cycle ends already? [AI, IP]
There’s been a spate of lawsuits (see below) and potentially more on the way (see above) re: gen AI. RBC indicated lawsuits do represent downside risk “relative to the current level of generative AI hype.” CNBC’s Deirdre Bosa pointed out relatively weaker stock performance of AI-exposed mega-caps over the past month v. 1H23. ChatGPT saw its first-ever user decline in June, and, even if this may be largely due to kids going on summer break, there are other pre-June potential signs of a slowdown - decreasing website traffic, lower engagement. Also worth noting that the cloud might not be ready for AI.
Meanwhile, Adobe is so sure its gen AI product isn’t infringing on copyright that, back in June, it announced will compensate the product’s biz users for any copyright infringement lawsuits.
[The importance of IP in the digital economy.]
Sarah Silverman, others sue OpenAI, others. [AI, IP]
Remember what I said above about owning IP? Comedian Sarah Silverman and two other writers have filed a proposed class-action lawsuit against OpenAI and Meta. NBC News legal analyst Danny Cevallos highlights this lawsuit is critical for the future of AI, and that the class-action proposal means that the plaintiffs hope to get it certified to include everyone affected by this copyright infringement. This isn’t the only proposed class-action lawsuit against OpenAI, BTW. Then there is the media moguls’ planned lawsuit, per above.
[The importance of IP in the digital economy.]
FTC investigates OpenAI… [Tech Regulation, AI]
Not to be outdone, the FTC has opened an investigation into OpenAI re: false information. However…
…while lawmakers grill FTC. [Tech Regulation, Gaming]
FTC head Lina Khan “faced tough questions” from a Republican-led House committee re: the FTC’s recent court battles that it’s lost, including Microsoft’s potential acquisition of Activision-Blizzard. A good summary of the background to all this here.
South Korea, Japan
Creative labor is struggling globally, too. [South Korea, Japan, Streaming]
Since we’re on the topic of creative labor struggling, I’d like to point out that, despite Korean content’s global popularity, the pay isn’t great for creatives over there either. The Squid Game creator isn’t participating in residuals and signed away all his IP rights. (See? Netflix is an IP company.)
Meanwhile, in a seemingly Pyrrhic victory for anime, which is more popular worldwide than it’s ever been, there is so much demand for it that many Japanese animators can’t make ends meet, and the result is a vicious circle of offshoring, and may be why at least one esteemed Japanese animator says Chinese animation (donghua) is ascendant.
[The importance of IP in the digital economy; Cultural globalization.]
IP
Wolverine wears his comics costume in Deadpool 3. [IP]
Pics have leaked of the upcoming Deadpool 3 IP crossover movie, starring Ryan Reynolds as Deadpool and Huge Jacked Man as Wolverine, with Wolverine wearing his comics costume. But the actors strike has now halted production.
[Evolving the IP.]
Willy Wonka and Godzilla return. [IP, Japan]
No, they’re not crossing over like Wolverine and Deadpool, but I wish they were. Willy Wonka begins and a new Japanese Godzilla movie.
Violent Cinderella. [IP]
The war for princess IP is indeed heating up, now that the same distributor that brought you Winnie the Pooh: Blood and Honey has thrown its hat into the ring.
Crypto
A victory for crypto v. regulation? [Crypto]
Ripple is only a security when sold to institutional investors.
Manga
Business Samurai: Business Strategy Manga
Latest episode of webcomic about businesses selling to consumers. Cross Platform’s own IP and multimedia franchise. You can read the complete story so far here.
The plot: The MASTER (マスター) corporation has hired a team of young and talented businesspeople from diverse backgrounds to guide its business strategy as it enters new industries. But is everything is as it seems? Hijinks and drama ensue as team CLARITY (明快さ) launches new businesses, while each member tries to make her and his way in the world!
The current story arc: Claurette, Lixue, Jiae, and Ryota are working to distribute Cafe Honesty's cold brew based on coffee beans... digested by a house cat. But now they've bumped up against competition with the Toriyaki company!
Episode #83: “Maybe I’ll look stupid, but you’ll look unprofessional.” [Coffee Distribution Arc #35]
Monday Motivation
What they forget to mention about "overnight success"… (Y Combinator)
From the guys at Y-Combinator. The public doesn’t see the years of hard work. Don’t sweat it, it’s part of the process.
GO FOR IT! REACH YOUR GOAL!