Ah, the good ol’ days of yore.

When I began my entertainment career as a pathetically naive nineteen year old, the music industry was arguably one of the most dominant forces in culture. For decades, they’d brought us artists who defined how we dressed. How we danced. They gave us everything from catch phrases to political views. They challenged authority. They defined eras. The rock n roll t-shirt we wore to our first day of high school would determine which group of friends we would join, and which groups we would avoid. Music, and the business that provided it, was omnipresent. So as an art school student who knew all three chords on a guitar (and even a couple of others, just in case I needed to impress someone), the music industry was a beacon of light. A dream. I wanted to be a part of it. And through some dumb luck and a whole lot of hard work, I got there.

Fast forward to the next important era in music history: The Digital Music Revolution. Around that time, I was part of a little record company in New York co-founded by a TV celebrity, an heir to a music industry icon and a good friend. The business was hard. It was expensive. Hits were few and far between. We spent over 50% of our budget on manufacturing CDs and vinyl, as well as distribution fees. Beyond the high cost of distribution, just to get one of our records on a shelf, we had to pay record stores and big box retailers extra. It was a brutal business. But, then, something started happening. I began hearing about this idea of delivering music over the internet. And, I don’t mean to brag, but unlike so many in the industry, I thought it was a god send. To me, it was simple economics: I said to myself, “You mean instead of printing CDs, paying to put them on a truck, only to be extorted by record store chains who would force us to pay to be included in their weekend mailer or else they wouldn’t carry our records… we could just, like, send it over the internet?” I was like… “Wow, we would actually have a chance of making money for a change.”

Now, of course, it didn’t go quite like that. The truth was that, at first, the main “business” of the Digital Music Revolution was piracy. It was bad. But, perhaps the biggest impact - and it was pretty close to immediate - was that it gave consumers a much easier way to discover and consume music. The incredibly innovative compression technology that made internet delivery of music possible, created a nearly overnight change in consumer behavior. As if in one voice, consumers said, “Why go to record store and pay for music, when I can just download it?” This became one of the most important lessons I learned from that era: If you want someone to adopt a new technology, it better makes something they already do better and easier, not worse and harder (listen up all my Web3 friends!). Friction, it turns out, is a killer in business. So suddenly, the music industry was confronted by a cataclysmic event. Consumers moved away from the once all powerful silo the industry controlled, to the Wild West of the internet. And, as it turns out, there was no getting them back. But the few of us who were excited by the new technology, tried to convince the powers-that-be, to look beyond the obvious problem of piracy, and instead embrace the technology as an absolute game changer for the business. We shouted from the mountaintops, “We should work with these technology companies to turn this into a legal, highly lucrative new model!” By that time, Napster (the leader in the space) was boasting tens of millions of users and hundreds of millions of downloads. Imagine, we said, if we could turn that into a model where people actually pay for the music. Sure, it would be challenge to convert people out of listening for free, but I truly believed it was possible. And interestingly, Napster was game for it. In fact, they claimed that was always their plan.

Thus, began the shuttle diplomacy where digital music leaders attempted to build a bridge with the music business. For a while, it seemed like there was a real chance to make it work. Some of the big companies jumped on board. Some even invested in Napster. But then… disaster. I won’t name any names here, but IYKYK. One fateful day, a meeting between two digital music founders and the heads of one of the largest music industry conglomerates went horrifically and epically bad. See, rather than coming into the meeting with a desire to work through the challenges, the two founders (by their own admission), came in “guns blazing.” They were arrogant. They told the big label boss that he was at the helm of a sinking ship. That he had no choice but to give in to their way of doing things because they were smarter and understood the business better than he did. They intentionally, and inadvisably decided to “poke the bear.” Well, you can imagine what happened. A memo was drafted after that meeting that became colloquially known as the “scorched earth policy.” This company, along with many others, joined together to sue Napster and all companies like them into oblivion. And it worked. The once powerful technology company, with a much better mouse trap, that easily could have kept the record business at the top of the cultural ladder, collapsed. But, while the defendants fell, the litigants suffered nearly fatal, collateral damage. The industry, by taking such extreme stances on digital music - even going so far as to sue consumers who used the platforms - had lost their audience. Sales of CDs collapsed. The scorched earth policy against Digital Music companies had become a sort of suicide pact. And, as is always the case, the vacuum that was created was quickly filled. And the once all-powerful music industry was relegated to being nothing more than vendors for streaming companies like Apple and Spotify.

Now, I fear, we are running the risk of repeating that history.

Just like Napster before them, it seems like some in the AI space are taking a very similar approach. They are intentionally, and provocatively… poking the bear.

Now let me state from the top, that I am a big believer in the opportunity that AI offers the entertainment industry. As I said in a recent thread on LinkedIn, what I find most interesting about these tools is what happens when they are put in the hands of truly gifted storytellers who, for whatever reason, simply would never have access to the millions of dollars it would likely take to fulfill their vision in the traditional sense. I believe these tools could make an entirely new kind of Indie cinema - driven by incredible storytellers you’ve never heard of who, thanks to AI, can make films and shows that otherwise would have been impossible. In my view, it could lead to a renaissance of storytelling. Not fueled by a network of gatekeepers who control what gets made and where it gets seen, but a legion of, as yet, undiscovered creators who may very well, as you read this, be making a movie in their bedroom. And that movie, might just change the world.

However, like Digital Music in the early 2000’s, AI creates truly complex issues that must be addressed.

I love the idea that some are currently pursuing called ETHICAL AI. Creators, technicians and craftspeople working together to train their own models, on their own IP. My friends at Toonstar, as well as, Bryn Mooser at Asteria are forging that path. I can’t wait to see what they do. But, that is hard, expensive and takes time.

For most creators, the power and relatively low cost of tools like OpenAI’s ChatGPT4o, Runway 4 and all of the others is impossible to resist. However those incredibly powerful tools, just like Napster and Kazaa of the past, come with a dirty - not so secret - secret. They are trained off of existing IP. Virtually every AI generated video or image you have seen, contains, at least in part, the artwork of other artists. Artists who, in no way, are compensated for it.

But, rather than debating the efficacy of that - I truly believe that a way will be found to fix that issue. I am more concerned about the approach some of the biggest players in the space are using.

During the recent, debilitating strikes in Hollywood, one of the big issues on the table was AI. I said at the time that, in my opinion, many of the arguments made against AI were not entirely wrong, but perhaps a bit uninformed, reactionary and short-sighted. But nevertheless, there was a genuine panic among creators that studios would use these tools to essentially replace talent and artisans with cheaper AI tools. And while some are beginning to come to grips with the inevitability of this new technology, many others are still in a complete meltdown over it. And while studios are loving the idea of being able to make more, incredible looking movies for way less money (because, of course they are), suddenly the issue of these massive companies (OpenAI just closed a round of financing at a $300B valuation), training their systems on IP owned by the studios, with them getting nothing in return, now has them freaking out, as well.

So you have Hollywood and Big Tech squaring off, yet again. But, just like in the early 2000’s, there could be a really smart, mutually beneficial way to bring all sides together and begin a new, prosperous era for entertainment. Unless, of course, the AI companies decide to poke the bear.

So what do you think happened? You guessed it. OpenAI, with the launch of their new ChatGPT4o, promoted a video based on The Lord of the Rings, using the original actor’s voices, created using a blatant and publicly acknowledged rip off of the legendary animator, Hayao Miyazaki’s Studio Ghibli style. A complete and total confirmation that anyone who has been fearing that AI will simply annex any IP owned by someone else and use it for they own benefit, is absolutely right. And worse, it seems they didn’t just do it with a wink and a nod, they did it with an emphatic “what are you gonna do about it?”

Look, I know there are many issues that this raises. And there are no shortage of opinions. I’ve heard all of them: “You can’t copyright a style.” “It’s all under the ‘fair use’ clause.” I get it. And some of it may, in fact, be correct. Time will tell.

My question is, why do it this way? Why in the hell is the strategy to poke the bear? With Napster v. The Music Industry, both sides wound up killing themselves out of arrogance and stupidity.

So, how do I think this may go from here?

Now, what I’m about to share aren’t necessarily predictions. It’s possible some other outcome exists. But as I see it, and for what it’s worth, I’m afraid these are the three potential outcomes to this silly, silly strategy:

First, is a brutal legal fight where studios, creators and talent join together to sue AI companies. How long would that take? Would it completely stop progress on the ability to use these tools? Will individual creators that use tools be dragged into the litigation?

Second, the studios cave and strike a deal with the AI companies to avoid protracted litigation. However, where does this leave the talent, artisans and craftspeople? Are they just kind of hanging in the wind? Does this lead to another devastating strike?

And finally - and frankly what I am most worried about - the current administration reverses decades of copyright law with the stroke of a pen. Suddenly, it’s the Wild West. Nothing is protected. Could it turn out that you make a great movie, and the next day someone releases virtually the same movie and monetizes it for themselves? It would be a mess.

My honest opinion is that it didn’t have to be this way. Rather than behaving like an obnoxious teenager flipping off the world, there could have been a conscious decision to lock arms and find ways for everyone to work together. Sadly, that’s not the world we live in.

Believe me, I can’t wait to be proven wrong about this. I really can’t. But, what do you think? Is the idea of technologists poking the bear, yet again, the right play? Looking forward to hearing what others think!

Entertaining the Future is sponsored by Bingeable. Bingeable is changing the way Indie movies are marketed and sold. Check out their latest movie, Muchachos at bingeable.net/muchachos

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