Is the “Netflix of AI” App a Friend or Foe to Hollywood?

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1:29Whether you're traveling for work or getting away for a minute, it's comfort that hits different. So yeah, Holiday Inn. It's a new day and a new stay. Book your next day at HolidayInn.com. It is Thursday, October 16th. I'll be honest, I really resist having AI people on the town to talk about AI. There's just so much spin and self-interested positioning going on there. But we all know how important the topic is for Hollywood, and every AI company is not the same, of course. Today, we're talking about an interesting one called Fable and their product called Showrunner. You might have seen some of their AI-generated episodes of South Park that went viral during the guild strikes a couple of years ago.

2:09And they have a new app called Showrunner that launched this summer. I'm sure many creators are already wincing at that name. Its backers, which now include Amazon, thanks to a recent funding round, they say users are able to generate TV episode-length videos that, here's the hook, uses licensed IP. That essentially means anyone could create fan fiction twists on their favorite stories or genres or shows or insert themselves and their friends into the narrative, essentially making them the hero of any Hollywood story. They're calling it the Netflix of AI, which sounds great. They've got some media attention for that.

2:47But the plan raises tons of questions, like which IP owners would allow this kind of use? Hollywood studios tend to control pretty tightly how their IP is used, and studios like game companies have a long history of having to deal with those owners when they make games or other products that allow people to manipulate the characters. How would this company and its partners make money on this? What happens if and when a user-generated Game of Thrones storyline becomes more popular than the actual Game of Thrones stories? Lots of questions, so that's why I wanted Edward Saatchi to come on the show.

3:20He's the CEO of Fable. He used to work at Oculus, and he's going to explain to me how this all works, how creators can potentially benefit from the technology, and how his conversations with these studios are going. Today is showrunner AI and the potential democratization of making TV and movies. From The Ringer and Puck, I'm Matt Bellany, and this is The Town.

3:44Okay, we are here with Edward Saatchi, CEO of Fable and a big proponent of the new product, Showrunner. Welcome. Good to see you, Matt. Okay, so I have many, many questions. First of all, I need you to tell me about your conversations with the Hollywood studios about your product. How are those going? You know, I think things have changed a lot over the last year. Okay, for the better for you or for the worse? Well, for the better for us, obviously. But I think a year ago, there was a lot of hesitation, fear, anger. How dare you? Right, exactly. And sort of a curiosity might be the best way to put it.

4:25And I think subsequent to that, people have started to use AI, they are incorporating it into their workflows. And I think probably the biggest shift has been that all of the studios have started to use AI themselves. And if I were to put it in more vivid terms, the barbarians at the gate were, let's say a little while ago, the people who were training AI models on everything on the internet. Those are the terrible people and the good guys are the ones who either don't use AI at all or use only licensed source models where every single little thing that it was trained on was licensed. license.

5:08And you are not that. You are somewhere in the middle. Well, yeah, I think that's changed a lot in that the new barbarians at the gate are the people who want to figure out how to generate entertainment. So with Sora 2, we saw that, and with Showrunner, which is what I work on, we saw a shift where there are teams now working on AI that can make episodes of shows, whether IP or not, try to tell good stories. And so those previous barbarians, they're sort of inside the castle now of like, oh God, okay, well, you guys don't seem so bad anymore. Let's think about what it means when there's just a button that says, let's generate the next episode.

5:52Let's create the next episode. Okay, but there's two things going on here. There's general AI-generated video content that we could talk about that is not based on IP explicitly, even though it's sort of all based on IP because you're ingesting a lot of this stuff to create your models. But I want to talk about specifically the AI video set in IP worlds. You're talking about Star Wars. You're talking about Indiana Jones. And give me your pitch. If you're sitting down with Bob Iger, why would Bob Iger let you do this? So I think it's time to stop seeing AI as a way to play defense of let's save money on a VFX shot in the next Star Wars movie and think about it as a way to play offense and actually generate entirely new kinds of revenue for, let's say, a Disney.

6:46So in our world, a Star Wars movie would come out in the cinema on a Friday and alongside it would be a Star Wars model that a lot of care has gone into, a lot of love. Maybe there are locked planets, there are locked characters and storylines, and you're prompting to explore that world, and you're paying for the privilege to do it. Everything that you generate is still owned by Disney. That's a key point there, and I'm curious how that would work, but you get out of the Star Wars movie, there's some console gaming area that you go into, or are you allowed to do this at home? You would do this at home.

7:24Yeah, so you would be at home on your phone. You might be in a Disney Plus area. You go to a different section of Disney Plus where you can generate entertainment within story worlds. It's the metaverse. It's finally the metaverse. Well, it's the metaverse, but on TV and on screens, which I think is what ultimately was always going to win. You get an upgraded subscription to Disney Plus. You pay$30 a month and you are able to come home from a Star Wars movie and create your own Star Wars story with you battling alongside Ray and Finn and all of them. Or it could be a fictional story that somebody would say, there's this planet that I've always been curious about.

8:02They only mentioned it once and you never got to see it. And I've spent the last two years just really building out the story of this world and this cantina. And that's a whole little world that you can go into and it's got a fan base. All of it's owned by Disney and all of it can be monetized for views by Disney. and the people who are creating within that world, the fans, they have to pay for that privilege too. It's a video game. It's a video game on steroids. Yeah, I think that's right. I think it's the sort of Roblox-like opportunity. And Disney invested in Fortnite, obviously. But this is something where you can actually share stories with your friends, share movies, share episodes.

8:43It's very subversive. I mean, I don't think there's any denying that because you're saying, here's the movie, and here's a way to make your own and to make your own episodes and to make your own stories. Some of you are going to make good ones and most of you are going to probably put yourselves in it and it's going to become more social and fun. And I think that applies to, obviously we did South Park AI as an experiment to kind of show people how our model could be used. We didn't release it because we didn't want people making bootleg South Park episodes to kind of illustrate the point that it is possible.

9:17Think about that with all of the beloved IP. The folks who love those, they wouldn't fight over ownership, right? They would sign a terms of service that say, I don't own any of this derivative content. The IP holder owns it. And I'm going to pay the IP holder for the privilege to be able to play in the sandbox of that story world. So I think it's a big new category. Yeah, it's licensed, high-end fan fiction. If you want Edward the Vampire to be in love with you in the Twilight universe, maybe you can create that fan fiction love affair and just lose yourself in that yeah okay but but you do require a company like disney to allow you to create that what would they have to turn over to you to create that model yeah i don't think it's just about turning over you know think about a how a video game adaptation is made.

10:15It's not so much an arm's length relationship of, here's everything we shot, figure something out. You would actually bake into the model, the story world, characters. You would think about what are the locked elements within this model. Right now, when you prompt a video model, it's pretty random. It's all over the place. Even if it's Star Wars, you can put your stormtroopers into ancient Rome, really anachronistic stuff like that. this would be really thought through, carefully thought through with the creative leadership of that particular IP, and it would be its own story world. So presumably, these user-generated Star Wars stories would be shareable on YouTube and elsewhere on the internet, and potentially, they would end up competing with the real Star Wars stories.

11:05And the internet would be flooded with this user-generated, IP-based content. I don't think Disney would love that. So some of the studios they're talking to do want a walled garden approach where as part of the terms of service, not only do you agree as a fan that you don't own anything you generate within the story world and that you're paying and that some of that's going to go back. You're buying credits to be able to generate, but also that you can't share outside of the walled garden. So only on Disney +, Only in the Star Wars section of Disney Plus can you do this. That or even less, right?

11:41I mean, just to start with, to get the studios comfortable, they choose what gets shared at all, right? So they see it and they can decide something's shareable. I think very quickly, they'll see that consumers are sophisticated enough to delineate between footage from... This is an example. Footage from Fortnite, where you've got a bunch of Disney characters running around doing something crazy. So consumers have gotten used to delineating between those things. And I think we're already past the point where people are concerned that video games cannibalize movies. It's brand extension. It helps you grow your brand.

12:22But I think those are the early questions that people will have to figure out. I think maybe the broader question, the way that I think about it is, instead of AI just being a production tool, maybe it's a shift similar to the shift from cinema to television, more control for consumers. Cinema to video, more control to consumers, VHS. Cinema to streaming, more control for consumers. Cinema to gaming, more control for consumers. And cinema to AI, more control for consumers in that now on your streaming platform, you get to have the fun of playing with this content. So it's not inert. You're actually getting to play with it.

13:00Yeah, but in all of those innovations, there have been guardrails where the IP owner has a pretty significant influence over how it is used. In the articles I've read about this, you have been talking about guardrails and not just, you know, Yoda all of a sudden is naked or something like that. But like things in these games, Yoda doesn't do things that Yoda wouldn't do in the movies. but what you're talking about and if there's control Yoda could have a lightsaber that he would never have in the regular Star Wars world or maybe baby Yoda has five brothers and sisters we've never heard of things like that I'd go beyond the word guardrails which I think can often makes you think of okay well the basics of like let's not have things that are sexually offensive or violent sorry I put the term naked Yoda in everybody's head no I like exactly that's where my mind is now like you know I'm never getting past that I think of it more as like respect for the IP so that you can't do a lot of things that you might want to do but that violate the IP.

14:08And I actually think having that quite strong line will be respected by the consumer. If they want to go and make janky stuff that has a relationship to the core IP, then they're not maybe as real fans. And the true fans will be like, oh, wow, they really put a lot of thought into this. and it's so cool that the whole model respects the eyepiece. But it does limit. There are people who would love for Yoda to be able to wield a weapon that doesn't exist in the Star Wars universe and things like that. Even on Sora, my friend Kevin was showing me all these videos that he made. He's a big golfer of him playing at the Masters and him making a shot and getting a hug from a dolphin and things like that that would never happen.

14:54that that's the fun of Sora and you kind of have to be the fun police. I think you do if you want to respect IP. On Showrunner, you can make your own shows. I think that drawing a hard line of like, no, we actually do care about story, which is very different to Sora, which is about memes and like something very quick hit, 10 seconds. We care about actual stories, whether that's episodes or movies or sophisticated scenes that respect the characters and the relationships. Like, let's say you wanted to make episodes of Friends with AI. You'd really need to understand where Joey's room is next to Chandler's room.

15:34Then they have the living room corridor, Monica and Rachel's. You have to really get that well. But you've trained on all that work if you do this correctly. If you've done a deal with them. So you wouldn't train if you haven't done a deal with them? No. No, I think you want to work with the IP holders. So if Craig has always wanted to be friends with Joey, and he is using your product, and you have a deal with Warner Brothers for Friends, Craig could create an episode of Friends where Joey has a new friend, and they go out drinking and playing sports, and all of a sudden, Craig is accepted into the Friends group.

16:10Yeah, so he wanted to feel like the show Friends. So that the formula of the show Friends is being respected, and it feels like an actual episode. and that's a big thrill. There's a little thrill that comes from subversion of having Joey doing something completely mad. That's a little thrill. It's a cheap thrill. There's a much bigger thrill to, holy shit, I'm actually in the show. This is really an episode. Joey's actually friends with me. Exactly. That comes from a lot of respect and care and understanding of storytelling. We're a part Pixar team and ML team. You have to actually care about storytelling, which I think doesn't exist.

16:51And you believe your model does care about and replicate the storytelling skill because the Hollywood Reporter gave your technology to three professional showrunners and they reported back and they weren't that impressed. They said that it was fine to kind of replicate the look and feel. But one writer of the neighborhood said, none of them wound up being, to me, especially funny or clever. Yeah, I mean, when you take into account that what the product is doing is so massively offensive, I think people come with their own preconceptions. Because if you really step back, and this is where I got to have lunch with a hero of mine, Paul Schrader, who had said, this is a deep blue and Kasparov moment for creativity.

17:40And I think what we're saying is extremely offensive and provocative, which is, this isn't just a tool. this is a competitor. This is something that is going to... You're going to say, I want to be in the episode, make it good. And you're going to give a sentence or two. And eventually, it's going to make 22 good minutes. You think so? And how far are we from that? I think we already are making three, four minutes that are good. And then maybe you have a writer who does a polish on top of that. And you cut down your costs of creating a sitcom from a showrunner and five EPs and a 10-person writer's room to one or two people.

18:18Yeah, I think of it a little differently, not the polish. You can do that. I think that's true. And I think Disney or others will see really good episodes and say, hey, we want to actually put some more budget behind this and make this even better because you've got such a great core. That's one thing. But another is writers and directors working to build out the story world. Being a bit like the Ed Harris character in The Truman Show, or Philip Seymour Hoffman in Synecdoche, New York, actually building a world that then the AI is like working with. So that's where I think the creativity is coming from.

18:51I think just saying, hey, you're going to polish AI now is obviously far too depressing. Saying this is a massive new canvas, you're going to build Springfield in great detail, and then Springfield can generate episodes of The Simpsons. It is radical, but it's also a whole new canvas for artists. Yeah, but Springfield wasn't Springfield until multiple seasons of writers coming up with storylines that made Springfield what it is, dotted with interesting characters and locations and storylines. Is that possible in this model? Yeah, I think we would be pulling some of that up earlier, as you would with a video game, where you're building out a story world more upfront for others to play in.

19:37In this case, you would actually put a lot of effort into that Star Wars story world, Simpson Springfield story world. Or in an original show, you'd say, I have a whole world in my head that I want to tie a model to. And you mentioned Paul Schrader, the writer, taxi driver, Raging Bull. He actually posted something on this topic. He said, if I were starting my career now, that's where my head would be at. It's no longer possible for a young filmmaker to ignore the potential of AI. And yet you say it's a competitor. You don't believe this is just a tool? Because everybody in the people who are advocating for AI say, oh, it's not replacing.

20:13It's only a tool. It's something that's going to help. It's like Google eliminated research. This is just going to be something we all use to help us express ourselves. You're not saying that. You're saying this is a replacement. A competitor is different to a replacement, but I think they say, don't worry, it's just a pencil. Don't worry, it's just a paintbrush. I don't know any pencils that start writing by themselves. So I think people are highly intelligent. They can see through this completely. And I think honesty is better. The honest truth is that it is creative by itself today and that that is artistically very interesting, something Andy Warhol would have found completely fascinating.

20:56And it's a new artistic medium, and it's the first artistic medium that is aware and intelligent. And people hear it's just a tool, it's just a pencil. they see through it. And it actually is more frightening because you think, what are you hiding from me? Like, if you're really saying that, you know it's not true. So you must be hiding something. So it's better to be honest, I think.

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22:01using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. To learn more, check out Accenture.com slash Spotify. How are you getting around the guilds here? Because I'm sure our good friend, Duncan Crabtree Ireland at SAG and the heads of the Writers Guild, they're probably having a heart attack right now. Yeah, so I think it does work best with animation now because you've got, you know... They have their own guild.

22:39I know, I know. You say that like you're swatting it away, but they're pretty powerful too, and they represent writers, and, you know, the recent strike, they got the ability, the writers did, that if you are using AI, you must credit a person writer and pay that person writer for scripts. Totally. So in our world, the show creator is that writer. the person who's come up with the world, they're getting a rev share every time somebody writes. They're getting the majority of the money when somebody makes a new scene with their show, makes a new character, makes a new episode. So to our mind, the money should flow to the creative person at the core of it.

23:18I think it does throw up really mad issues when you start to think about using an actor's face that are just so uncomfortable that we're not thinking about it right now. So we are focused on animation. I think that's something that is too disturbing. There's separate sets of rights there with right of publicity and all kinds of other things. It's just disturbing. It's weird. I think Sora 2 is interesting in that you could use other humans in your other people in your videos. But it's just too early to think about that, I think. So if The Simpsons was canceled by Fox and Disney, you are saying that you could do a deal with Disney where you would be able to create episodes of The Simpsons that could match what is currently produced.

24:03You believe that right now? Yeah, think about it as AI syndication. No, but that's distributing existing product. This is creating something new. I'm saying that is the AI version of syndication. But in the past, you'd have so much that you could distribute it 24-7. The new version of syndication is that once you have enough episodes, you can generate, unlimited is such a provocative term, but you can generate many more episodes and people can play in your show. And then it's evergreen. It's generating revenue for you on an ongoing basis. The IP is staying fresh, and it's not as much of a hits-driven business.

24:37And also, you're not waiting years between seasons. So yes, in The Simpsons case, that would be something where it could continue to generate money outside of the seasons and even if it was cancelled. How do you deal with the voices? Yeah, well, that's what I was getting at with pure animation for original... You sighed like, oh, these actors. No, no. I don't think you could deal with it without giving them the money. Yeah, they make a lot of money, those voice people. Exactly. So you create something where they're making the same amount of money as they would for episodes. And people are paying money, credits to generate.

25:18I think you have an extra issue beyond money, which is some or many of those actors may just veto it and say, I'm just not doing it. I don't want to do that. they're so rich, why would they? Why would they? They might feel it's very unpleasant and not good. But from a business perspective, I think they should, they would receive the same amounts as they would for the other recording sessions, but they still might veto it, which is totally, you know, that's up to them. Right. And let's say you are James Earl Jones, and you know you're old and about to die, and you do a big deal where you license your voice for future Star Wars materials and your family will benefit from that forever.

25:59Yeah, it has to be up to each actor. And I think that is one of the challenges with let's do Rig and Mort, let's strike a deal. Who are you striking a deal with? You have to include the voice talent. So that's many people. So it would take a while to get one of those deals done. Much longer for live action, but for animation, you'd have to bring everyone along with you. But I think there's definitely a financial upside to the talent as well as to the IP holder. Except for the writers. They're screwed. Well, no, I don't think so. I mean, in this world, a Mac groaning is getting money every single time.

26:39Sure. I'm talking about the writing staff of The Simpsons that would be fired if the show were canceled, and then you would replace them going forward. I think that's why I sort of say it's a competitor, not a tool. And I think that's, you know, it's just so mealy-mouthed the way that people say something they know isn't true. It's a competitor. So what evidence do you have that people want this? Do people want an AI version of Friends? Do they want an AI version of The Simpsons? Or will they not be able to tell? I think we saw, you know, just with those few days when Sora 2 allowed you to make Rick and Morty or South Park or the rest.