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 publish‑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 shopper web and fintech at Ark Make investments, informed Fortune instruments like Sora successfully recreate the “YouTube second” for video manufacturing, handing skilled‑grade creation capabilities to anybody with a immediate as an alternative of a studio price range. In his view, that shift will flood the market with AI‑generated clips and collection, making it far tougher 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 lately informed Fortune Netflix’s massive transfer for Warner Bros.’ reveals the streaming large is motivated by a must deepen its conflict chest because it sees Google’s AI-video capabilities exploding with the onset of TPU chips.
As low‑value artificial video proliferates, Grous mentioned he believes audiences will start to mentally divide leisure into “pre‑AI” and “publish‑AI” classes, attaching a premium to work made largely by people earlier than generative instruments grew to become ubiquitous. “I believe you’re going to have mainly a break up between pre-AI content material and post-AI content material,” including that viewers will think about pre-AI content material nearer to “true artwork, that was made with simply human ingenuity and creativity, not this AI slop, for lack of a greater phrase.”
Disney’s IP as AI gasoline
Inside that framework, Grous argued Disney’s actual benefit isn’t just Sora entry, however the depth of its pre‑AI catalog throughout animation, stay‑motion movies, and tv. Iconic franchises like Star Wars, basic princess movies and legacy animated characters develop into constructing blocks for a worldwide experiment in AI‑assisted storytelling, with followers successfully check‑advertising new eventualities at scale.
“I really assume, and this could be counterintuitive, that the pre-AI content material that existed, the Harry Potter, the Star Wars, all the content material that we’ve grown up with … that really turns into incrementally extra useful to the leisure panorama,” Grous mentioned. On the one hand, he mentioned, there are offers like Disney and OpenAI’s the place IP can develop into user-generated content material, however on the opposite, IP represents a sturdy content material pipeline for future reveals, motion pictures, and the like.
Grous sketched a suggestions loop during which Disney can watch what AI‑generated character combos or story setups resonate on-line, then selectively “pull up” essentially the most promising ideas into professionally produced, larger‑price range tasks for Disney+ or theatrical launch. From Disney’s perspective, he added, “we didn’t know Cinderella strolling down Broadway and interacting with a majority of these characters, no matter it might be, was one thing that our viewers can be all for.” The OpenAI deal is thrilling as a result of Disney can convey that content material onto its streaming arm Disney+ and make it extra premium. “We’re going to make use of our studio chops to construct this into one thing that’s a bit extra luxurious than what simply a person 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 big sums from patrons betting on lengthy‑time period streaming and licensing worth.
The massive Netflix-Warner deal
For streaming rivals, the Disney-OpenAI pact is a strategic warning shot. Grous argued the hovering value tags within the bidding conflict for Warner Bros. between Netflix and Paramount reveals the significance of IP for the following section of leisure. “I believe the rationale this bidding [for Warner Bros.] is approaching $100 billion-plus is the content material library and the potential to do a Disney-OpenAI kind of deal.” In different phrases, whoever controls Batman and the like will management the inevitable AI-generated variations of these characters, though “they might take a franchise like Harry Potter after which simply create slop round it.”
Netflix has an amazing monitor document on monetizing libraries, Grous mentioned, itemizing the instance of how the defunct USA dramedy Fits surged in reputation as soon as it landed on Netflix, proving in depth 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 might see comparable upside if their homeowners strike Sora‑model offers to convey characters extra deeply into cellular and social environments. “That’s one other firm the place you go, ‘Oh my god, the franchises they’ve, in the event that they’re in a position to convey it into this new age that we’re all experiencing, it is a home-run alternative.’”
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 would possibly 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 finest 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 it is a broader battle for consideration that spans far past conventional studios and reveals 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 mentioned “sleep” was one of many firm’s greatest rivals, because it was busy pioneering the binge-watch.)
Grous additionally sounded a warning for the age of post-AI content material: The binge-watch gained’t really feel pretty much as good anymore, and there will probably be some type of backlash. As critics similar to The New York Instances‘ James Poniewozik more and more observe, streaming reveals don’t appear to be as re-watchable as even latest hits from the golden age of cable TV, similar to Mad Males. Grous mentioned he sees a future the place the endangered movie show makes a comeback. “Persons are going to wish to go exterior and meet or go to the theater. Like, we’re not simply going to wish to be fed AI slop for 16 hours a day.”
Editor’s observe: the writer labored for Netflix from June 2024 by means of July 2025.
