Navigating a New Unknown for Film and Media Under AI Disruption

The 2023 AI video of Will Smith eating spaghetti made the technology's limitations memorable. Faces and movements were unstable, and the scene barely held together. Since then, creators have gained more control over how a scene is made. They can guide a character's appearance, direct movement and camera work, and revise selected parts of a shot. These improvements reduce the work of turning generated clips into usable scenes, making more ambitious productions affordable to attempt.

We expect this to substantially widen entry into long-format production. Established studios can adopt the same tools, however, so cheaper production opens the market without necessarily giving newcomers an advantage once they arrive. A company could spend less on each release and still earn less from it as competitors produce more for the same viewers. This suggests an opportunity for investors in studios and creator platforms that can select distinctive stories and turn initial interest into continued viewing, with the resources and rights to keep earning as those stories develop.

AI Video Takes Direction

A longer production needs shots that connect. In a conversation, the wide shot and successive close-ups must show the same people and setting. Character and scene references help preserve those details, reducing footage that must be repaired or discarded. Seedance 2.5 accepts image, video and audio references and can generate several connected shots within a single 30-second output. Generating shots together can reduce the matching work otherwise needed to assemble separately generated clips into a sequence.

Within that scene, camera and performance controls help creators direct what happens. Camera controls guide movements such as push-ins and orbits, while keyframes specify important visual moments and performance references guide poses and expressions. Seedance can use a rough, untextured 3D scene to guide positions and camera paths, with timestamp instructions specifying when an action or cut should occur. These inputs let creators specify a reveal or reaction more precisely, which can reduce repeated attempts to approximate the intended shot.

Creators also need to revise a shot without losing what already works. Regenerating it to change one expression can also alter the character or setting, creating more repairs. Runway's Aleph 2.0 supports frame-guided edits across relevant shots, designed to preserve elements the editor has not asked to change. Seedance also supports targeted edits and changes in camera perspective while aiming to preserve characters and action. When that preservation holds, creators can improve a scene or try another angle without repeatedly rebuilding approved footage.

Picture and sound improvements reduce some of the finishing work that remains. Veo offers output up to 4K and generates dialogue, effects and ambient sound with the picture. This can reduce upscaling and separate sound production, though Google identifies spoken-audio consistency as an area of active development. Production budgets still have to include rejected generations, revisions and human review alongside the cost of accepted footage. The commercial gain comes when these controls reduce that total work, shortening schedules as well as lowering costs.

Breaking the Barrier to Long-Format Stories

These controls make it easier to develop the passages between a story's main payoffs. A short video can deliver its value through one joke, reveal or striking image. A longer work must also make its introduction and buildup worth watching through pacing, performance, shot design and editing. A brilliant idea does not supply that execution on its own; without it, viewers may leave before reaching the story's payoff. Cheaper attempts and revisions give creators more room to develop those passages, bringing a longer project within reach of people who previously lacked the crew, technical skills or budget to sustain it on screen.

Established studios can use the same improvements within existing productions. In a 2025 Netflix earnings interview, co-CEO Ted Sarandos said an AI-assisted building-collapse sequence in The Eternaut was completed ten times faster than traditional effects workflows would have allowed. The sequence was made with Netflix's Eyeline team and, according to Sarandos, would otherwise have exceeded the show's budget. New entrants therefore face established competitors that can lower production costs while retaining financing, talent and distribution relationships the entrants still need to secure. Access to AI production alone gives viewers little reason to choose a newcomer's work over theirs.

The Race to Turn a Hit Into an Evergreen

As both groups produce more, each release competes with a wider supply of stories. Viewers' time and willingness to pay do not automatically increase with that supply. If competent technical execution becomes widely available, as we expect, ordinary visual polish will do less to distinguish one release from another. Games offer a useful parallel: better water or lighting can improve presentation without making the gameplay more engaging. In film, a brilliant idea gives viewers a reason to choose a story, while its characters and plot give them reasons to keep watching. Selecting and developing that experience becomes more valuable as attractive presentation becomes easier to obtain.

A successful release also shows competitors that an audience wants a particular experience, encouraging variations on a proven idea. The same controls that help the original creator can accelerate that response. Kling explicitly promotes reusing a reference video's pacing and composition with different characters or products. Fewer discarded shots and repeated repairs can shorten the path from recognizing an opportunity to releasing an alternative, giving the original studio less time before close substitutes arrive.

Those substitutes can satisfy viewers looking for a similar experience. Unrelated entertainment, also cheaper to produce, competes for the time they might otherwise spend returning to the original. Both pressures can reduce the repeated encounters through which a distinctive work becomes familiar. A hit may still attract a large initial audience while having less time to build attachment to its particular characters and world.

The original studio gains cheaper follow-ups too, and a worthwhile continuation can give interested viewers somewhere to go next. Sustaining that current interest is different from establishing evergreen IP that viewers revisit for years. Lasting attachment requires distinctiveness reinforced by repeated exposure, at scale and over time. We expect faster arrivals of appealing alternatives to make that harder to establish, even when original creators can release more quickly themselves.

Finding the Hit and Keeping Its Audience

As story selection becomes more important, investors backing a new studio need evidence of that judgment before funding a full release. Cheaper production lets more premises be developed into pilots, including stories for audiences previously too small to justify the production budget. Audience response lets investors assess how a team selects and develops ideas, and whether it uses that response to improve its next commitments. That record matters more than the number of projects a studio can generate.

A promising debut creates a second financing decision. Continuations already in development give the company a chance to satisfy viewers who want more before competing releases draw them elsewhere, but funding a whole franchise in advance risks paying for stories viewers will not choose. The investment therefore needs to allow for development beyond the debut, with larger production commitments following audience response. Releases that earn more than their cost can then contribute the surplus to further work, without a first hit having to become evergreen IP.

Even when viewers return, the company needs a contractual claim on what follows. A producer paid only a fixed fee, with no continuing rights or income participation, can make a successful story whose later value accrues elsewhere. A creator platform that sources and helps finance stories from outside teams faces the same question. Such a platform can expand its slate without employing every production team, but its agreements determine which releases it participates in and how much income it retains. That share must cover the cost of finding, supporting and reaching audiences for its slate, including unsuccessful projects, before scale improves the investment case.

Established rights holders approach that same financing problem with an advantage new studios are still trying to earn: audiences already return to some of their characters and worlds. They can use cheaper production to extend those properties themselves or attract outside creators willing to finance additions under license. Roblox's licensing platform provides a gaming precedent for setting terms, approving creator-made experiences and collecting revenue shares. A video equivalent could combine permission with approved character and scene references, allowing the owner to expand a property without funding every release itself.

That expansion depends on creators choosing the license over increasingly affordable independent production. Familiar characters and worlds must improve a creator's expected earnings enough to justify the owner's share after production and audience acquisition costs. Terms that leave too little can push promising projects toward independent work, limiting licensing income. For an investor in the rights holder, viable creator economics determine how much expansion outside capital can support. For a platform that only administers those licenses, the investment case rests on its contracted fees or revenue share rather than ownership of the underlying IP.

We think investors may find opportunities in new studios and creator platforms whose story choices attract audiences that return, provided their financing and rights let them keep earning as those stories develop. Established IP owners have a different starting point: they can use cheaper production to build on existing attachment, including through releases financed by outside creators. In either case, lower production costs become valuable to investors when the company can turn continued viewing into income it retains after making and distributing the work. As production becomes easier for competitors too, that ability offers a firmer basis for investment than output volume alone.