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Behind the Numbers: an EMARKETER Podcast
The Disney-OpenAI Deal: Disaster Waiting to Happen, or the Future of Storytelling? | Behind the Numbers
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- [00:01]
A
Commerce media has grown up and so has the complexity eMarketer's Commerce Media Trends 2026 summit. Get clear guidance on in store retail media, off site activation and measurement beyond platform metrics. Join eMarketer analysts live March 20 at 11:30am Eastern and get straight answers on what actually drives results. Hey gang. It's Monday, January 26th. Ross, Max and listeners, welcome to behind the Numbers new Marketer video podcast. I'm Marcus and joining me for today's conversation we have two folks. Our senior digital advertising and media analyst living in Westchester in New York is Ross Benish.
- [00:48]
B
Hey Marcus.
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A
Hey fella. Also joined by principal social media analyst living down in Philly, it's Max Williams.
- [00:54]
C
Yo.
- [00:55]
A
Hey Fell. Today's fact. All right gents, I know you're sports fans so I have a sports one for you. I tried to tailor my facts of the day slash find whatever I can because it normally takes three hours and I'm like I should probably be doing my real job. The Green Bay packers football team season ticket waiting list is one of the largest in professional sports. So if you want a season ticket, you're probably gonna have to wait the longest for this 1. Between 100 to 200,000 names on the list and giving given that about 99% of packers season ticket holders renew, it's estimated that the wait time from when you place your name on the list to getting a general stadium season ticket is between 30 to 50 years. So people place their kids on when they're born apparently in the hopes that they will one day be eligible for a season ticket.
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C
I thought about doing that with my eldest child for Giants season tickets, but they were so trash at the time that I thought I'm not doing this.
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A
And you've gone 12 years 50. It'd probably still.
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B
And with the Giants, couldn't you just get in tomorrow? Does anyone want to watch that?
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C
I mean that's the thing. I might as well just buy them on StubHub for a quarter of the price.
- [02:17]
A
Packers also the only non private ownership. They're a non profit co ownership deal which is pretty cool I thought. I was also looking up how they got their name. So the Green Bay packers, they got their name 1919. The team founder, Curly Lambo, which the the stadium is named after Lambeau Field, worked for the Indian packing company, the meatpacking business in Green Bay. The company gave Lambo 500 bucks for uniforms on the condition that the team be named after the company and as a result the team became known as the Packers. A nod to the city's meatpacking industry. So I thought was fascinating. Anyway, today's real topic, the Disney Open Air deal disaster waiting to happen or the future of storytelling. All right, let's set the table. The deal between OpenAI and Disney certainly turned some heads. Headlines such as deadlines, Disney's OpenAI deal, soulless exploitation or necessary innovation. From Jake Cantor or Shiona McCallum at the BBC writing creative industries incredibly worried about OpenAI Disney deal. They sum up this apprehensive sentiment pretty well. Quite nicely. I think the news what we're talking about. Well, Andrew Limbon of MPRN writes that in December the Walt Disney Company reached a licensing agreement with OpenAI bringing Disney characters and images to Sora, the AI company's short form video generator that lets users create videos of up to 20 seconds through short text prompts. The three year licensee agreement lets folks create and share videos using over 200 animated characters from Disney. Perhaps encanto Marvel, folks like Deadpool and Star Wars. Luke Skywalker, maybe Mickey Mouse and Minnie of course are included as part of the deal. Disney will invest $1 billion into OpenAI and become a major customer, quote unquote, of the company. So I'll start with you. Why did Disney do this deal?
- [04:21]
B
It seems like a way to generate cheap content. So if people are using AI and and making stuff themselves to entertain themselves and they feel like they're willing to pay Disney just to have access to that, you're entertaining people with less of a budget than you would if you have to spend on a bunch of blockbusters to keep them subscribed.
- [04:45]
A
Yeah, yeah, the user generated content piece of this is really interesting. Mr. Blake Montgomery of the British newspaper the Guardian was saying that. They're reportedly saying that some fan made videos will be displayed on Disney streaming service, a move seemingly designed to compete with TikToks and YouTube Shorts Infinite Feeds, which themselves often include clips of popular TV shows and movies. Disney plan to include vertical video feed inside Disney as well in the next year.
- [05:10]
B
You know, it's pretty interesting though because Disney historically has been very litigious on people using their intellectual property, even if it's fan made videos that are made in tribute of Disney. And in the 90s, Disney lobbied to have copyright changed in the favor of large corporations to be able to hold on to a character's likeness for their, you know, exclusively for a longer window than they previously had. And now they're saying like do whatever you want with Darth Vader. You know, it's just interesting.
- [05:43]
C
They've come A long way from suing daycares for painting Disney characters as part of murals inside of their businesses. Yeah, I mean, I think that Ross's point about why Disney did it is pretty on point. It's a, it's hard to turn down a billion dollars, and B, you know, Disney kind of understands that they're fighting a battle in the attention economy, and I think it's hard to argue that they're winning in that battle. Right. I mean, so their box office revenue is, you know, barely in 2025, was barely half of what they generated eight years ago. The Disney audience is growing, but it's, you know, growing at a kind of mature clip now. And I feel like, you know, building something that allows them to sort of stay at the heart of this kind of emergent form of content consumption and entertainment makes a lot of sense. I think it's not a perfect parallel, but I think a lot about this, in contrast with the way that Viacom, which was this incredibly culturally important media conglomerate at the end of the day, 20th century, beginning of 21st, they went to war with YouTube in a war that lasted for years and years and years where they just basically would not allow Viacom clips of Viacom content to appear on YouTube. And I feel like if they had just been a little bit more permissive around that, they might have kind of helped Kindle a whole new form of cultural dialogue or discourse with their media and IP at the heart of it, and they completely miss that opportunity. And so I feel like on some level, Disney is hoping that something similar happens here, even though I have some doubts about whether that's actually going to happen.
- [07:30]
A
Yeah, yeah. One of the arguments here was that it gives Disney kind of a seat at the table. They're kind of hedging a little bit with this move. There are two former Disney animators. There's some really interesting things to say. One of them who worked on Beauty and the Beast says, well, they said the grades, the experience for filmmakers, but we're saying Disney doesn't have a choice but to side with OpenAI. This is them trying to hold the reins and play damage control. If you can't beat them, join them. The other one was saying, I think it's soulless. I don't think any. There's any artistic integrity behind it. Art, whether it's technically beautiful or a child's drawing, is created with intent, with heart, and with meaning. And they went on to tell this story about the value of storytelling and patient storytelling as well. This Snow Bear, one of them created this Oscar shortlisted listed animated short which took two years of hand drawing and depicted the journey of a lonely polar bear across a thawing wilderness. And they were saying the 10 minute film essentially captures their experience of losing their wife to cancer, seeing her almost literally melt away. And so a lot of these stories are people kind of telling their stories through these characters. Both of them were concerned about this instant gratification piece as well, how AI could impact future generations of animators saying, with Sora, we won't have the time or the patience to sit down and create works of art that help us deal with our feelings or communicate with others or create something big and beautiful like a movie, because we'll be used to just getting it instantly so it could change how we look at content.
- [08:59]
C
Well, I feel like maybe we'll get into this later in the show, but I, I feel like the current design of Sora drastically limits that worst case scenario or the possibility of that worst case scenario. Should we. I, I don't want to. Please, you know, go behind the curtain, please. So I just feel like, you know, fundamentally the, the sort of power of, of storytelling and the value and power of the, you know, stories that everybody loves is that everybody gets to experience them and sort of, you know, hold something collectively and, you know, being able to generate, you know, up to 20 second long clip of something unfamiliar featuring familiar people, it has a real, real limited capability to do that. Right. And so, you know, you think a lot about how powerful certain types of stories are and, and also even just like small moments are with, with, you know, familiar characters. But it has to be something that everybody experiences in a uniform way together, right? So it's funny, preparing for this podcast made me think a lot about movies and plays, which I'm sure is the exact opposite of what, you know, OpenAI would want. But it got me thinking a lot about this play, which is actually about to be developed into a movie called Mr. Burns, a post electric play, which is about like these people that are kind of cast together unexpectedly around a campfire after, like, civilization has collapsed. So, like they're in the woods outside some unnamed city and they're really having trouble kind of, you know, keeping the conversation going because they don't know each other and everyone is all stressed out. And to sort of break the awkward silence, someone goes, have any of you guys seen that episode of the Simpsons where Marge. And then all of a sudden everybody lights up and they like, you know, R.E.M. what the Simpsons was. And it like brings them all together in this Profound way. And this technology will make precisely zero steps in the direction of creating something that's shared or, you know, held collectively. And so yeah, that's, I think something that for people that are nervous about this, I think that's something that's worth, worth keeping in mind.
- [11:25]
A
Yeah.
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B
Did you please bring up, did you use Mr. Burns as an example? Because the Simpsons is a Disney intellectual property now.
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C
That, that it does work on that level.
- [11:34]
A
Yes, it's an appealing concept for Kazumas, assuming things go well. Because being able to put yourself or your kid at the heart of a Disney Marvel, Star wars, whatever movie is an attractive proposition. And Blake Montgomery of the, of the, of the Guardian was saying, Disney wants you to AI generate yourself into your favorite Marvel movie. But Ross, there's all sorts of things that could, could go wrong here, right? I mean, yes, they're going to be 20 seconds and yes, OpenAI Disney, they're saying that they're not going to let users generate illegal, harmful or age inappropriate content. Easier said than done. And they are only 20 seconds. Although Mr. Iger, Bob Iger, CEO of Disney was saying to CNBC that it doesn't mean people are going to be able to make their own feature length ratatouille fanfic videos or anything like that. You could easily see these videos getting longer and longer, eventually becoming maybe half an hour, an hour, whatever. But then also to what Max is saying, it's taking that won't be in those collective experiences anymore. Because why would I want to watch a Marvel film with some random person I've never met before? I guess that's what actors are.
- [12:38]
B
But we've been moving away from like water cooler entertainment for a while. Yeah, I mean you still, you still have the NFL and some other sports, but generally it's kind of hard to find someone who's watching the shows you watch right now, let alone like you guys are using AI tools to create your own versions of that show. So yeah, I think we're just going to continue to move further away from, you know, water cooler television.
- [13:06]
C
But I don't know that there we're going to progress completely in the direction of this ultra like, you know, one to one personalized level of interactivity either because I just, I just feel like the utility of it or the value of it is so, so limiting. I mean I think a lot about like, because you're, you're absolutely right, Ross. Like, you know, there are shows now that, you know, people like HBO look at the White Lotus as this kind of like unbelievably important show to them. And that I think that the series finale of the most recent episode drew like three and a half million people. And, you know, 20 years ago, if a show averaged 10 million viewers a week, it would get canceled immediately because it was just seen as too small. Um, but when you, whenever, anybody, any kind of novel thing kind of takes root in culture, people, I, I feel like, tend to really pounce on it because there is this kind of nagging hunger for something that we can all kind of coalesce around. And so I think that this technology fundamentally moves us further away from that. And that is reflected also too in, in if you look at the sort of like engagement and download numbers for things like Sora, like they're, they're trending in the wrong direction. And I think that kind of trajectory was probably one of the reasons why OpenAI sought to do this deal with Disney in the first place. That and avoiding being hit with a 10,000 pound cease and desist note from Disney's lawyers. Because it's also worth pointing out that Disney probably also did this to set a market. So they did this deal with OpenAI and within weeks of that, you know, launched a gigantic lawsuit at Google for infringing on its copyrights and intellectual property. So that's another piece of this as well.
- [14:58]
A
Yeah, to, to piggyback on that. I mean, Ross, To Max's point, OpenAI definitely did this so they would not get sued by Disney, at least for a while. Why else would OpenAI make this deal?
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B
Well, I mean, Disney is one of the premier entertainment companies and they have a richer history than about anyone in the business right now. So if you want to do one of these deals and set a precedent, Disney's a hell of a partner to start out with.
- [15:32]
A
Yeah, yeah, they're going to get. Alison Morrow of CNN mentioning they're going to get to feed the AI video generator with some 200 Disney characters the users can manipulate in any way, shape or form. And they're going to get the much needed cash as well. About a billion dollars. It's not a lot because they owe $1.4 trillion to various people over the.
- [15:51]
C
Next couple of years.
- [15:51]
A
But a billion dollars is nothing. And so they will get some much needed cash.
- [15:56]
B
It almost seems like video game, like in a way that like, you just tell your kids, like, take the Nintendo and like, leave me alone for a few hours. Like, you know, here, here's Disney plus you could go do whatever you want with Mickey Mouse. Have fun like creating your. And Being quiet in the other room. I can see it being useful for that.
- [16:17]
A
Talking about creating nonsense. Isn't that part of the concern here? I mean, Sharon McCallum, to return to her piece from the BBC for a second, she was saying, quote, soros hyper realistic videos have proven to be popular in the U.S. but there have been significant criticisms from those claiming it has also led to some people creating offensive deep fakes or public videos of public figures who have passed away. Close quote. What do we make of this risk? Because I feel like a lot of people when they first have this deal were like, hang on, they're going to be able to do. People are gonna be able to do what with Disney characters?
- [16:49]
B
I mean, you ever log on Twitter lately? It's, it's terrible. It's just like Grok, you know, put all these people in bikinis and they might even be minors, you know what I mean? Like, there's no guardrails and very crazy images generated. So, yeah, it's gonna be tough reining that in.
- [17:06]
C
Also, for anybody, you know, worried about objectionable depictions of, you know, well known children's characters, I'd like to make them aware of a little website called DeviantArt, which has been, you know, around for probably 20 years and is just, you know, teeming with this stuff. The thing that I keep kind of coming back to and wondering is like, you know, what is the prospect that anything created through this partnership is going to pop or matter to anyone besides like, you know, the child of the person who, you know, makes a Sora clip of, you know, their seven year old high fiving Iron man or whatever it is. And I, I feel like on some level the fact that this has been sort of like essentially sanctioned by these two companies might even have the opposite effect and, and just kind of make these things sort of boring. Like, it's sort of fun if someone, if someone sends you a link to a, you know, Tumblr post or a, you know, a nano banana thing that's taking something and kind of subverting it in a way, right? Like, I think a lot about when we were batting this piece around in prep. Do you guys ever, ever hear of a movie called the Kid? So this was like a movie that this artist named Dax Norman made a long time ago, which basically takes the footage of the movie Purple Rain, the Prince movie, and, and recuts it so that it looks, instead of being a story about like Prince and Morris Day squaring off to be like the coolest band in Minneapolis, it's a movie about Prince murdering Apollonia and then spending the rest of the movie trying to get away with it. And, like, it's really. It's a funny, cool idea. But, like, I feel like a lot of the power of the kid is the fact that it was basically this kind of like, you know, movie on the run for a long time because Prince's estate was like, this is completely unacceptable. We're going to sue.
- [18:57]
B
The Prince was always super litigious. Like, it's only after he died that his music is in commercials and stuff like that. He wasn't even on Spotify when he was alive.
- [19:04]
C
No, exactly. And so, you know, for years and years, it was this kind of like, you know, Dax Norman is going to appear at this one dingy, like, art space in Bushwick for one night, show the movie once, and then, like, you know, escape under cover of darkness to avoid getting, you know, murdered by Prince's lawyers. And, you know, if instead we move into this era where anybody can do whatever they want with this stuff all the time, I feel like in some ways it might kind of diminish interest in doing that stuff. But we'll all. But we're all brand new and at the very beginning of this, so maybe I'll be completely wrong about this, but I think that it'll be interesting also to see sort of where this stuff gets traded and moved passed around. I'm sure Disney would, like. Would prefer that all of this just kind of goes into some lazy river that lives inside the Disney plus app that people just dumbly scroll through all the time. But maybe it breaks out and becomes really popular on YouTube or TikTok or something. Or maybe everyone just gets bored with the idea that you can take Mickey Mouse. Well, maybe not Mickey Mouse. He's public domain now. But take, you know, Buzz and Woody and. And have them, you know, do Krav Maga on each other or whatever.
- [20:23]
B
Jerusy. Escape from Tomorrow or Escape. It's called Escape from. Yeah, Escape from Tomorrow.
- [20:30]
C
No, I don't think I know that.
- [20:31]
B
That's another movie that was, like, on the run up. People filming illegally at Disneyland, and they turn their Disneyland experience into a horror movie.
- [20:39]
C
Nice. See, this is what I love about this is like, this conversation about ultra personalized entertainment has instead turned into, like, a way to discover new, weird, subversive works of art. I like this very much.
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A
We talked about generating this content for the kids to be able to do this, that and the other. It's interesting. This kind of for kids or not for kids Question. Because nonprofit Children's advocacy group Fair Play issued a statement saying the Disney OpenAI agreement betrays kids, quote unquote. OpenAI claims children are prohibited from using Sora, yet they are luring young kids to their platform using some of their favorite characters. I guess this is for parents, perhaps, to create videos for their kids. So we've talked a little bit about the disaster waiting to happen piece, but the other question is, or is this the future of personalized storytelling? Disney and OpenAI's agreement hinting at this future in which viewers don't just choose what to watch, but kind of generate it on demand, as we've been talking. And Denny Ellis Beshan of Scientific American was noting this. Disney's chief, Bob Iger saying in a recent earnings conference call that he intends for subscribers to create content within Disney itself. So you can imagine going into Disney and maybe using powered by, OpenAI or whatever, saying the type of film you want, the type of characters, and then letting it create you a video. Do we think that might be replicated by other platforms? Is this potentially the future of personalized storytelling?
- [22:13]
B
What if that stuff still be very low quality compared to, like, every single TV show and movie Disney's gonna put out? Like, it's cool. I could, you know, do something with Buzz Lightyear, Darth Vader, or the Marvel characters, but, like, that's just gonna be really rudimentary to, like, the, you know, $900 million blockbuster I could sit back and watch and be amazed by. I think there's a place for both, but, like, I just don't see how it replaced that. Totally.
- [22:41]
C
You know, it's funny, as we sit here, you know, wondering about the sort of, like, business or models or content models that I feel like this potentially impacts or changes, as we've been having this conversation, I feel like my. The conclusion I've now drawn is that this is just going to put Cameo out of business. Like, you know, instead of getting, you know, paying Lou Ferrigno 50 bucks to say Happy birthday to your grandma, you can have, you know, the all of the Avengers say Happy birthday to your grandma, and it will cost $0. And maybe that's the main thing that this imperils. I think, though, you know, at the risk of being too pithy, the answer to your question is no. I mean, like, again, to get back to what I was saying, like, the reason that storytelling has remained a durable thing that we as a, you know, species continue to do is because it's a way to sort of, like, bond people to one another and one to one's story. Remixing is kind of structurally at odds with that. And so I just don't see it replacing anything. I mean, you know, if you want to talk about a way to sort of like, continue to entertain your grandparents when they're in the nursing homes of tomorrow, like, I could see a version of that taking root. But the idea that like young people who are kind of looking for meaning and looking for tribes and looking for, you know, communities to inject themselves into or become parts of, like, they're not going to want to just sit around fiddling with, you know, this, the stuff that they liked doing when they were 8 and like sharing it with one another. I just. That to me doesn't that. That seems non credible on its face. Yeah, you guys can.
- [24:20]
B
I could see a lot of like guys on Reddit trying to break it and get it to do things it's not supposed to and then like just having threads of the things that they've gotten it to do.
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C
Yes. And I will watch those threads. That sounds like fun, but I will, but I will, you know, chuckle at them. Close Reddit and then go back to watching a professionally made. Yeah, yeah, snooty, highbrow, you know, thing made in Korea on Mubi instead. Because I'm old and, and snotty.
- [24:49]
A
Well, we've seen with content, people want to be served the content. You know, like we had the chance to pick anything on Netflix, we talked about this. But people sit there scrolling, scrolling, scrolling because they're not sure what to watch. And that's why fast services, apart from being free, are becoming quite popular because people can just turn them on and they're there. They replicate TV similar with Spotify, Apple Music. I could pick any song in the world, but kind of paralyzed by choice. And so I end up just putting on some kind of playlist or song radio or something like that. And so I don't know yet. Are people going to want to sit there and fiddle about with trying to design and direct and produce their own movie every time they want to watch one just for 20 seconds worth of content? Probably not. You mentioned that Cameo might go out of business because of this. One of the big questions here is how what's going to happen with a lot of the people in the entertainment business because. And also how the characters are going to sound remains unclear because Disney said that this does not include any talent, image, likeness, or voices of human performers. And so they're not going to sound the way so Woody won't sound like Tom Hanks. Because they've not asked Tom Hanks to use his voice. So they can use the characters, but not the people. There's a union representing workers in the creative industries saying there's real concern among its members, including writers, actors, visual effects artists and other creatives, over AI replacing jobs. In the BBC article. Max, I'm so sorry, what are you.
- [26:08]
C
Picturing all of your. No, I'm just imagining like people, you know, like budding voice actors giving, you know, voices. Like completely absurd voices. Like imagine, you know, someone who does a really good, you know, Donald Trump or Eric Cartman or something like, you know, sticking that voice behind, you know, a well known character like that to me just seems like an endless source of amusement.
- [26:37]
A
Yeah.
- [26:38]
C
So I am sorry I completely derailed you there.
- [26:41]
A
No, you're fine. They're going to have to do something because they have the rights to the voices.
- [26:44]
C
So.
- [26:44]
A
Yeah, how the characters are going to sound still rather unclear. Gents, before we wrap this up, any other big questions that come to mind about this deal going forward?
- [26:54]
C
I'd be curious to see whether another studio or large IP holder blinks and does this right? I mean, like WBD obviously sits on a pretty rich library of stuff that could lend itself, well to this. I'm sort of skeptical myself, but everybody is right at the very beginning of this. And the terms of this arrangement between Disney and OpenAI, as I understand them, are favorable enough to the rights holders that it, it doesn't seem like that high risk. But I, I could also totally understand all of them just kind of hanging back and, you know, instead trying to, you know, sue the pants off of OpenAI and all the other AI companies instead.
- [27:41]
A
Yeah, yeah, yeah. It's interesting whether players think and do something similar. The deal, three year licensing deal is one year of exclusivity for OpenAI and then Disney can shop its IP around to other AI companies. These we'll see. But thank you so much, gents, for the conversations we've got time for today. Thank you to my guests. Thank you to Ross.
- [28:02]
B
Thanks Marcus.
- [28:02]
A
And to Max.
- [28:04]
C
Always a pleasure. Marcus, thank you.
- [28:05]
A
Yes, indeed. And to the whole production crew. We got Danny and Lance bringing us out today. Where's John? He's not been on one of these in ages. Lazy. And to everyone for listening. Thank you so much to you guys as well. Thanks for listening to behind the Limousine Marketing Video podcast. Make sure you subscribe and follow and leave a rating review if you have time. We're back tomorrow as I guest host the Banking and payment show. Talking all about banking and payments trends for 2020.