Disney’s expansive $1 billion licensing settlement with OpenAI is an indication Hollywood is critical about adapting leisure to the age of synthetic intelligence (AI), marking the beginning of what one Ark Make investments analyst describes as a “pre‑ and post‑AI” period for leisure content material. The deal, which permits OpenAI’s Sora video mannequin to make use of Disney characters and franchises, immediately turns a century of rigorously guarded mental property (IP) into uncooked materials for a brand new type of crowd‑sourced, AI‑assisted creativity.
Nicholas Grous, director of analysis for client web and fintech at Ark Make investments, informed Fortune instruments like Sora successfully recreate the “YouTube moment” for video manufacturing, handing skilled‑grade creation capabilities to anybody with a immediate as a substitute of a studio funds. In his view, that shift will flood the market with AI‑generated clips and collection, making it far more durable for any single new creator or franchise to interrupt out than it was within the early social‑video period. His remarks echoed the evaluation from Melissa Otto, head of analysis at S&P International Seen Alpha, who just lately informed Fortune Netflix’s huge transfer for Warner Bros.’ reveals the streaming large is motivated by a have to deepen its battle chest because it sees Google’s AI-video capabilities exploding with the onset of TPU chips.
As low‑price artificial video proliferates, Grous stated he believes audiences will start to mentally divide leisure into “pre‑AI” and “post‑AI” classes, attaching a premium to work made largely by people earlier than generative instruments turned ubiquitous. “I think you’re going to have basically a split between pre-AI content and post-AI content,” including that viewers will contemplate pre-AI content material nearer to “true art, that was made with just human ingenuity and creativity, not this AI slop, for lack of a better word.”
Disney’s IP as AI gas
Inside that framework, Grous argued Disney’s actual benefit is not only Sora entry, however the depth of its pre‑AI catalog throughout animation, dwell‑motion movies, and tv. Iconic franchises like Star Wars, basic princess movies and legacy animated characters grow to be constructing blocks for a world experiment in AI‑assisted storytelling, with followers successfully check‑advertising and marketing new situations at scale.
“I actually think, and this might be counterintuitive, that the pre-AI content that existed, the Harry Potter, the Star Wars, all of the content that we’ve grown up with … that actually becomes incrementally more valuable to the entertainment landscape,” Grous stated. On the one hand, he stated, there are offers like Disney and OpenAI’s the place IP can grow to be user-generated content material, however on the opposite, IP represents a sturdy content material pipeline for future exhibits, motion pictures, and the like.
Grous sketched a suggestions loop wherein Disney can watch what AI‑generated character mixtures or story setups resonate on-line, then selectively “pull up” probably the most promising ideas into professionally produced, larger‑funds initiatives for Disney+ or theatrical launch. From Disney’s perspective, he added, “we didn’t know Cinderella walking down Broadway and interacting with these types of characters, whatever it may be, was something that our audience would be interested in.” The OpenAI deal is thrilling as a result of Disney can carry that content material onto its streaming arm Disney+ and make it extra premium. “We’re going to use our studio chops to build this into something that’s a bit more luxury than what just an individual can create.”
Grous agreed the rising marketplace for pre‑AI movie and TV libraries is just like what’s occurred within the music enterprise, the place legacy catalogs from artists like Bruce Springsteen and Bob Dylan have fetched enormous sums from patrons betting on lengthy‑time period streaming and licensing worth.
The large Netflix-Warner deal
For streaming rivals, the Disney-OpenAI pact is a strategic warning shot. Grous argued the hovering worth tags within the bidding battle for Warner Bros. between Netflix and Paramount exhibits the significance of IP for the following section of leisure. “I think the reason this bidding [for Warner Bros.] is approaching $100 billion-plus is the content library and the potential to do a Disney-OpenAI type of deal.” In different phrases, whoever controls Batman and the like will management the inevitable AI-generated variations of these characters, though “they could take a franchise like Harry Potter and then just create slop around it.”
Netflix has an excellent observe document on monetizing libraries, Grous stated, itemizing the instance of how the defunct USA dramedy Fits surged in reputation as soon as it landed on Netflix, proving intensive again catalogs may be revived and re‑monetized when matched with trendy distribution.
Grous cited Nintendo and Pokémon as examples of below‑monetized franchises that would see comparable upside if their homeowners strike Sora‑type offers to carry characters extra deeply into cellular and social environments. “That’s another company where you go, ‘Oh my god, the franchises they have, if they’re able to bring it into this new age that we’re all experiencing, this is a home-run opportunity.’”
In that atmosphere, the Ark analyst suggests Disney’s OpenAI deal is much less of a one‑off licensing win than an early template for the way legacy media homeowners may survive and thrive in an AI‑saturated market. The businesses with wealthy pre‑AI catalogs and a willingness to experiment with new instruments, he argued, will probably be greatest positioned to face out amid the “AI slop” and switch nostalgia‑laden IP into enduring, versatile belongings for the publish‑AI age.
Underlying all of this can be a broader battle for consideration that spans far past conventional studios and exhibits how sectors between tech and leisure are getting even blurrier than when the gatecrashers from Silicon Valley first piled into streaming. Grous notes Netflix itself has lengthy framed its competitors as every part from TikTok and Instagram to Fortnite and “sleep,” a mindset that matches naturally with the approaching wave of AI‑generated video and interactive experiences. (In 2017, Netflix co-founder Reed Hastings famously stated “sleep” was one of many firm’s greatest opponents, because it was busy pioneering the binge-watch.)
Grous additionally sounded a warning for the age of post-AI content material: The binge-watch received’t really feel pretty much as good anymore, and there will probably be some type of backlash. As critics resembling The New York Instances‘ James Poniewozik increasingly note, streaming shows don’t appear to be as re-watchable as even current hits from the golden age of cable TV, resembling Mad Males. Grous stated he sees a future the place the endangered movie show makes a comeback. “People are going to want to go outside and meet or go to the theater. Like, we’re not just going to want to be fed AI slop for 16 hours a day.”
Editor’s word: the writer labored for Netflix from June 2024 by July 2025.
