Will the Entertainment Business Stay Human?

Summary

Thoughts on the Market: Will the Entertainment Business Stay Human?

Hosted by Ben Swinburne, Morgan Stanley's US Media and Entertainment Analyst
Release Date: July 23, 2025

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Introduction to Generative AI in Entertainment

In the latest episode of Thoughts on the Market, Ben Swinburne delves into the transformative impact of Generative AI (GenAI) on the entertainment industry. Opening the discussion, Swinburne highlights the unprecedented accessibility of art creation facilitated by GenAI:

"It's never been easier to create art for anyone. With a little help from generative AI, you can transform photos of yourself or loved ones in the style of a popular Japanese movie studio or any era of visual art to your liking."
— Ben Swinburne [00:00]

Swinburne emphasizes the versatility of GenAI, from generating multilingual speech to predicting weather, showcasing its broad applicability within media and entertainment.

Revolutionizing Content Creation

The conversation shifts to how GenAI is revolutionizing content creation. An unknown speaker elaborates on the seismic shifts anticipated in content production and consumption:

"Is expected to bring about a seismic shift in how content is made and consumed."
— Unknown Speaker [00:51]

Swinburne provides concrete examples, such as AI-driven de-aging of actors and recreating the likenesses of deceased performers. This technological advancement significantly reduces the need for extensive visual effects (VFX) teams:

"A recent production used AI to de-age actors and recreate the likeness of a deceased performer, cutting what used to take hundreds of VFX artists a year to just a few months with a small team."
— Ben Swinburne [01:00]

Further applications include scriptwriting, editing, visual effects, and dubbing. In the music sector, GenAI aids labels in identifying emerging talent and generating new compositions, even resurrecting the voices of artists who have passed away:

"Genai can even create songs using the voices of long gone artists, potentially extending revenue far beyond an artist's lifetime."
— Ben Swinburne [01:05]

Cost Reduction and Distribution Transformation

The discussion progresses to the economic benefits of GenAI. Swinburne cites significant potential cost reductions in television and film production:

"Reduce television and film production costs by 10 to 30%, with animation and post production among the biggest savings opportunities."
— Ben Swinburne [01:34]

GenAI also transforms content distribution. Enhanced recommendation engines leverage behavioral data to anticipate and serve audience preferences:

"Recommendation engines can become even more predictive, using behavioral data to serve up exactly what listeners want, sometimes before we know what we want."
— Ben Swinburne [01:54]

Additionally, GenAI facilitates multilingual dubbing with synchronized mouth movements, making global distribution more efficient and culturally tailored:

"Genai can already dub content in multiple languages, even syncing mouth movements to match the new dialogue. This makes global distribution faster, cheaper, and more culturally relevant."
— Ben Swinburne [02:03]

Enhanced Monetization Strategies

With better engagement driven by GenAI, platforms can explore innovative monetization strategies. Swinburne outlines several possibilities:

"Platforms will use Genai to introduce new pricing tiers, targeted advertising, and personalized superfan content that taps into niche audiences willing to pay more."
— Ben Swinburne [02:17]

These advancements promise enhanced revenue streams through personalized and targeted content offerings.

Ethical Concerns and Legal Implications

Despite the benefits, the integration of GenAI raises significant ethical and legal concerns. An unknown speaker introduces the topic:

"But all this innovation brings up profound ethical concerns."
— Unknown Speaker [02:25]

Swinburne expands on these issues, addressing consent, copyright, and authorship:

"First, there's the issue of consent and copyright. Can Genai tools legally use an actor's name, likeness or voice? Then there's the question of authorship. If an AI writes a script or composes a song, who owns the rights? The creator or the Genai model?"
— Ben Swinburne [02:29]

Labor unions express concerns over AI potentially replacing human jobs and devaluing creative work:

"In 2023, AI was a major sticking point in negotiations between Hollywood studios and writers and actors guilds, the fear that AI could replace human jobs or devalue creative work."
— Ben Swinburne [02:49]

Moreover, ongoing legal battles question whether AI models trained on copyrighted material without permission infringe intellectual property laws:

"Multiple lawsuits are underway over whether AI models trained on copyrighted material without permission violate intellectual property laws. The outcomes of these cases could reshape the entire industry."
— Ben Swinburne [03:14]

Audience Reception and Human-Centric Content

A pivotal question arises: Will audiences value AI-generated content as much as human-created works? Swinburne presents a nuanced view:

"Some consumers are fascinated by AI created music or visuals, while others crave the emotional depth and authenticity that comes from human storytelling made by humans could become a premium label in itself."
— Ben Swinburne [03:18]

This divergence suggests a bifurcation in the market, where human-centric content might attain premium status amid widespread AI-generated offerings.

Resilience of Live Events

Not all facets of entertainment are equally susceptible to AI disruption. Live sports, concerts, and theater remain largely insulated due to their reliance on real-time emotion and human connection:

"Live sports, concerts and theater remain largely insulated from AI disruption. These experiences thrive on real time emotion, unpredictability and human connection, things AI can't replicate."
— Ben Swinburne [03:54]

As a result, the value of live events and sports rights is projected to increase, benefiting rights holders and live platform operators:

"In an AI saturated world, the value of live events and sports rights will rise, favoring owners of sports rights and live platforms."
— Ben Swinburne [04:02]

Future Outlook and Industry Winners

Looking ahead, Swinburne outlines the evolving landscape of storytelling and media economics:

"We're entering an era where storytelling is no longer limited by budget or geography. Genai is lowering the barriers to entry, expanding the creative class, and reshaping the economics of media."
— Ben Swinburne [04:10]

The winners in this new environment are likely to be companies with scalable platforms, extensive user data, and robust engineering talent capable of integrating GenAI seamlessly:

"The winners in this new landscape will likely be companies that can scale platforms with massive user bases, deep data pools, and the engineering talent to integrate Genai seamlessly."
— Ben Swinburne [04:25]

However, there remains space for agile newcomers who can innovate swiftly and disrupt established players:

"But there's also room for agile newcomers who can innovate faster than the incumbents and disrupt the disruptors."
— Ben Swinburne [04:37]

Swinburne concludes by acknowledging the increasing complexity and challenges as GenAI tools advance:

"As the tools get better, the questions get harder. And that's where the real story begins."
— Ben Swinburne [04:44]

Conclusion

The episode underscores the profound impact GenAI is having on the entertainment industry, balancing transformative opportunities with significant ethical and legal challenges. As the technology evolves, both creators and consumers will navigate a landscape where human artistry and AI-driven innovation coexist, each carving out unique value propositions.

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For those interested in exploring the intersection of technology and entertainment further, stay tuned to Morgan Stanley's Thoughts on the Market for more in-depth analyses and insights.

Transcript

[Ben Swinburne]

Welcome to Thoughts on the Market. I'm Ben Swinburne, Morgan Stanley's US Media and Entertainment Analyst. Today, Genai is poised to shake up the entertainment business. It's Wednesday, July 23rd at 10am in New York. It's never been easier to create art for anyone. With a little help from generative AI, you can transform photos of yourself or loved ones in the style of a popular Japanese movie studio or any era of visual art to your liking. You can create a short movie by simply typing in a few prompts. Even I can speak to you in several different languages. I can ask about the weather.

[Unknown Speaker]

Wie ist das vetter hoit?

[Ben Swinburne]

In the media and entertainment industry, Genai.

[Unknown Speaker]

Is expected to bring about a seismic.

[Ben Swinburne]

Shift in how content is made and consumed.

[Unknown Speaker]

A recent production used AI to de age actors and recreate the likeness of.

[Ben Swinburne]

A deceased performer, cutting what used to.

[Unknown Speaker]

Take hundreds of VFX artists a year.

[Ben Swinburne]

To just a few months with a small team. There are many other examples of how Genai is revolutionizing how stories are told, from script writing and editing to visual effects and dubbing. In music, Genai is helping music labels identify emerging talent and generate new compositions. Genai can even create songs using the voices of long gone artists, potentially extending revenue far beyond an artist's lifetime.

[Unknown Speaker]

Genai driven tools have the potential to.

[Ben Swinburne]

Reduce television and film production costs by 10 to 30%, with animation and post production among the biggest savings opportunities. Genai could also transform how content reaches audiences.

[Unknown Speaker]

Recommendation engines can become even more predictive, using behavioral data to serve up exactly.

[Ben Swinburne]

What listeners want, sometimes before we know what we want. And there's more studios can achieve in post production.

[Unknown Speaker]

Genai can already dub content in multiple.

[Ben Swinburne]

Languages, even syncing mouth movements to match the new dialogue. This makes global distribution faster, cheaper, and more culturally relevant.

[Unknown Speaker]

With better engagement comes better monetization. Platforms will use Genai to introduce new.

[Ben Swinburne]

Pricing tiers, targeted advertising, and personalized superfan content that taps into niche audiences willing to pay more.

[Unknown Speaker]

But all this innovation brings up profound ethical concerns.

[Ben Swinburne]

First, there's the issue of consent and copyright. Can Genai tools legally use an actor's name, likeness or voice? Then there's the question of authorship. If an AI writes a script or.

[Unknown Speaker]

Composes a song, who owns the rights?

[Ben Swinburne]

The creator or the Genai model?

[Unknown Speaker]

Labor unions are understandably worried.

[Ben Swinburne]

In 2023, AI was a major sticking point in negotiations between Hollywood studios and writers and actors guilds, the fear that AI could replace human jobs or devalue creative work. There are also legal battles. Multiple lawsuits are underway over whether AI models trained on copyrighted material without permission violate intellectual property laws.

[Unknown Speaker]

The outcomes of these cases could reshape the entire industry.

[Ben Swinburne]

But here's a big question no one can Will audiences care if content is AI generated? Some consumers are fascinated by AI created music or visuals, while others crave. The emotional depth and authenticity that comes from human storytelling made by humans could become a premium label in itself. Now, despite Genai's rapid rise, not every corner of entertainment is vulnerable.

[Unknown Speaker]

Live sports, concerts and theater remain largely.

[Ben Swinburne]

Insulated from AI disruption.

[Unknown Speaker]

These experiences thrive on real time emotion.

[Ben Swinburne]

Unpredictability and human connection, things AI can't replicate. In an AI saturated world, the value.

[Unknown Speaker]

Of live events and sports rights will.

[Ben Swinburne]

Rise, favoring owners of sports rights and live platforms. So where do we go from here?

[Unknown Speaker]

By and large, we're entering an era.

[Ben Swinburne]

Where storytelling is no longer limited by budget or geography.

[Unknown Speaker]

Genai is lowering the barriers to entry.

[Ben Swinburne]

Expanding the creative class, and reshaping the economics of media.

[Unknown Speaker]

The winners in this new landscape will.

[Ben Swinburne]

Likely be companies that can scale platforms with massive user bases, deep data pools.

[Unknown Speaker]

And the engineering talent to integrate Genai seamlessly.

[Ben Swinburne]

But there's also room for agile newcomers.

[Unknown Speaker]

Who can innovate faster than the incumbents.

[Ben Swinburne]

And disrupt the disruptors.

[Unknown Speaker]

No doubt, as the tools get better.

[Ben Swinburne]

The questions get harder. And that's where the real story begins. Thanks for listening. If you enjoy the show, please leave us a review wherever you listen and share thoughts on the market with a friend or colleague today.

[Unknown Speaker]

The preceding content is informational only and based on information available when created. It is not an offer or solicitation, nor is it tax or legal advice. It does not consider your financial circumstances and objectives, and may not be suitable for you.