Hollywood and AI: Matt Belloni on the Cost, the Stigma, and the Future

If you want a clear understanding of how AI is affecting Hollywood … good luck.

Some of the industry loathes the technology, with screenwriters, directors, and actors alike vowing never to use AI in their work—or collaborate with those who do. Others are much more open to the potential for AI to act as everything from creative partner to cost-cutting engine. And a rare few, Ben Affleck included, are already making millions by capitalizing on AI’s nascent potential to (they argue) streamline and improve the filmmaking process.

At WIRED, we’re constantly doing our best to document AI’s transformational effects on the entertainment business, for better and for worse. (If you haven’t read Ruth Fowler’s recent essay for us, on going from a screenwriter to an underemployed LLM trainer, I highly recommend it.) But in an effort to get the most nuanced possible view, I wanted to talk to someone who knows the industry and its players inside and out.

Matt Belloni, a founding partner at Puck, has covered Hollywood for decades. He writes a scoopy newsletter (What I’m Hearing …) and hosts a scoopy podcast (The Town) that frequently focus on AI and Big Tech as both become increasingly dominant forces across entertainment. Belloni also happens to be a former lawyer, making him the ideal person to ask about the ongoing, and highly consequential, debates over AI and copyright, IP, and celebrity likeness.

Belloni was generous enough to give me an hour of his time, and we managed to cover all the bases—from whether Hollywood types side-eyed Ben Affleck after he sold an AI startup to Netflix for $587 million, to just how much control Big Tech companies now wield over the entertainment industry. You can read our conversation above or listen wherever you get your podcasts.

This interview has been edited for length and clarity.

KATIE DRUMMOND: Matt, I have to start with the obvious, which is artificial intelligence. You've been on top of AI in Hollywood for a very long time, and you've said multiple times that, quote, “everyone is doing it,” meaning everyone [in the industry] is using AI. What exactly do you mean by that?

MATTHEW BELLONI: Well, there's two types of AI, as you know. There's generative AI, which is content creation and things like that, and then there's what I refer to as the corporate AI, like streamlining processes and better search results. Obviously, on the second one, everyone is using it.

I'm not going to name a name, but I heard a very interesting story about a very prominent showrunner who went into the writer's room and basically castigated her writing team for not using ChatGPT to help with the process.

To help with the creative process? Or the admin and bookkeeping?

The creative process. Here's a scenario, suggest some jokes. Here's this, this, this. It doesn't mean they use them. You could do the same thing with Google. It's just better, and people are using it. I know, I've talked to screenwriters who use it to suggest scenarios or to give a description of the inside of a building where they want a scenario to play out, or things that to me seem like part of the process.

You may not know this, but the Writers Guild is actually OK with that. As long as there is a credited writer on every script and that this process doesn't impact jobs, they're OK with the use of this technology.

That's one side. Then the other side is generative and how this is making content. There it's a little murkier, because there are a lot of studios that are purporting to create AI-generated movies, shorts, TV pilots. I've seen a lot of them. They're not great. They're better in animation, and I think this is where we're going to see the disruption first, but you can always kinda tell, and that's the problem when you're trying to relate to people. I can't wait to see what Elon's historically accurate version of The Odyssey looks like.

I mean, it's obviously going to be spectacular. I'm sure he's hard at work on it. He's probably been staying up all night, all week.

First of all, historically accurate is hilarious for a work of fiction. But it just means it's going to be all white people. And the funny thing is, if he tries to use or to scrape the actual version of [Christopher Nolan’s] The Odyssey—I don't know if you saw the headlines, a full version of The Odyssey leaked on X last weekend, and before Universal could send a takedown, it was viewed like a million times …

I actually had not seen that.

So who knows whether Grok got its hands on the actual Odyssey to train for Elon’s fake Odyssey, but whatever.

On the generative AI front, I think where we’re seeing the biggest innovation/disruption is in the animation world, where visually scenes can be completed and storyboards done without the use of artists. You can extrapolate things. Doesn't mean it's the finished product, but even Netflix, on their earnings call this past month, said that 300 shows use generative AI.

I saw that. And they're talking about that relatively loudly and freely. I'm wondering where the stigma is right now. Are there members of Hollywood—actors, directors, screenwriters—who are calling out AI publicly while using it privately? How much of this is still happening behind closed doors in secretive circumstances?

Well, obviously I don't know what everybody does behind closed doors, but I know what people I talk to say to me. I do know that there is still a taint on using it.

A perfect example is Amazon. They did a whole media day where they brought in press and they have this whole AI generative studio that is being run by Albert Chang, one of their executives, and they announced a bunch of shows, including some animation shows, and there were real creators on these shows.

Almost immediately, the backlash that one of the creators got online was so crazy—I don't say crazy meaning bad, I mean crazy like loud—that he stepped down. That's a tangible impact of AI shaming, so to speak, and that is real.

You know, maybe that'll change. Netflix got a lot of leeway on this, because what did they do? They bought Ben Affleck's AI company. They paid almost 600 …

$587 million. And I barely knew he had an AI company until he sold it.

I asked the question, “Was this a $600 million press release?” Because Netflix wants to get into AI. They know that Ben is someone who has a ton of credibility and cachet as a movie star, an Oscar winner, a filmmaker, and having him attached to this company buys them a lot of leeway and allows them to do things that maybe others would bristle at, but it's Ben’s company. He's vouching for it.

And if you look at what that product actually does, it takes the footage that you have shot, and it makes it available for generative AI, essentially.

So it prevents you from having to do a costly reshoot if all you need is some coverage of something. It allows you to extend the periphery of a scene or get a circle shot when you didn't get it in camera. It’s much more of a tool for filmmakers—or at least this is how they've presented it—rather than something that is replacing [them], because the big fear in Hollywood is that this technology will replace [people].

What was the talk of the town, so to speak, when Ben made that deal? Did people scratch their heads? Did they look at him differently than they had the day before?

I honestly don't think so. There are a number of filmmakers that are doing this, and doing it the so-called right way. Darren Aronofsky is one of them—and Ben, I think because of his credibility and because he's able to articulate very clearly what he's actually doing and what he's not doing.

Because of that, I think that it went over OK. I think the biggest reaction I heard was like, "Holy cow, $600 million?"

That's a lot of money.

He's gonna make more money on that than he's made on any of his movies put together.

Well, he's had some, I don't know, expensive divorces.

I know. The question is, did he launch it when he was married to JLo? I imagine their prenups probably contemplate their separate property.

I think they had a very expensive house they were trying to offload at one point. I'm a big entertainment gossip reader.

There have been a bunch of deals between tech firms and Hollywood. There was the $75 million investment from Google DeepMind into A24, which pissed a lot of fans off. You had Lionsgate taking a stake in Runway, which is a big name in AI-generated video.

Why is this happening? Is it that the technology is ready? Is it that Hollywood is more receptive to this idea that, potentially, the technology can really have an impact on the industry?

I think there's a couple things. First of all, the technology is better, and it is applicable, and there's this fear in the C-suites of the entertainment companies of being left behind. If you talk to people at the studios, one of the biggest problems they face is the cost of movies. The cost of movies keeps going up, whereas the box office is not necessarily covering that.

If you look at the animation space, Pixar is a perfect example. Pixar originals, they can't make them for less than $200 million. I mean, they can, but it's very difficult to make them. They're made in California with a California workforce. They have their own special process that is very labor-intensive, and they haven't used AI to the extent that they maybe could.

If we are looking at a new landscape where movies just aren't going to gross as much as they did, you have to look at bringing the cost down.

And the guilds aren't bringing the cost of labor down. The unions are not willing to do that. So where does it come from? It comes from non-unionized labor that is, for the most part, the below-the-line people and the technology.

That makes me think of Christopher Nolan and The Odyssey. It had a huge cast, it was made all over the world. It's making crazy money. And Chris Nolan, who I believe still professes to not having a phone, not surprisingly has also been critical of AI while also being open to its uses, right?

He's kind of a fence-sitter. But he has also pointed out that younger generations have rejected a lot of quote-unquote slop, right? They're looking for authenticity. That said, are the Chris Nolans of the world going to continue to be even more the exception to the rule?

He is a one of one at this point, where he came into this situation with all the credibility and clout in the world, having won the Oscar for Oppenheimer and having made a billion dollars off that movie. The Odyssey, if it is made at all by another filmmaker, it's made at a much lower cost, not $250, almost $300 million. You don't get to have all those stars in it. You just don't get to do it.

But what I would argue to the studios is that is exactly why it broke through, is that it smells different. If you look at the trailer, if you look at everything around it, it smells authored, and the audience can tell when something is authored.

In a world where you can create all the visual effects you want, there's something about seeing The Odyssey and knowing, because they are very good at marketing this, that this is the vision of one guy who you trust and who is gonna show you something real. And I say real in the sense that movies are increasingly going to be split into movies that are filmed with real people and real scenarios and then those that are just either generative AI in practice or generative AI from the get-go.

There's going to be a split between things that we find authentic and those that we just kind of passively enjoy.

Just sort of consume, for lack of a better term.

That's where social media is going, and the more social video goes that direction, I think the bigger the market opening is for these kinds of big, special, real movies.

But you have a one of one legendary filmmaker like Chris Nolan over here with The Odyssey. Then you have someone like Kane Parsons, who made Backrooms, which made a ton of money for A24. I think it was the highest grossing film that they've ever made, and he actually came out and said he would probably make generative AI disappear if he could.

I'm curious about the degree to which you think Hollywood executives care about a young filmmaker, with nascent influence and nascent clout, having something to say about that. Do they give a shit?

They give a shit in the sense that studios are ultimately in the business of talent relations. They want to appeal to the kinds of people that Kane Parsons represents. The whole reason Christopher Nolan made The Odyssey and Oppenheimer with Universal Pictures was because he was at Warner Bros. for many years, and he woke up one morning in 2020 and all of their movies had been put on HBO Max.

The CEO at the time said, “Because of the situation of the world right now, all of the 2021 movies are gonna be put day and date on HBO Max.” That was an example of the CEO thinking tech forward, “We’re gonna give the consumer what they want. We're going to build our streaming service, even if it means grossing less at the box office.”

And the number one filmmaker in town took his talents down the street. They would love to have the next Chris Nolan movie, but instead, Universal, which didn’t do that, they got the number one filmmaker, and they have an amazing relationship with him.

So I think to the extent that studios care about talent, and A24 in particular very much cares about talent, because they are not only appealing to those filmmakers as a business, they have a brand.

A24 is a brand among people who care about movies, and this Google deal, they took a hit for that. People didn't like it. Their fans did not like it. If that ultimately comes back to bite them, and they sell fewer A24 hats or scented candles or whatever's in their merch store today …

Please tell me they have scented candles.

Oh, they do. I got my podcast producer one of them.

And?

He said it smelled nice.

All right, good. Good for them.

But that's where the studios care. Now, is it gonna stop them? No. They have a fiduciary responsibility to their shareholders to bring down the cost of movies, and they see it as an evolution. You know, if you ever see the movie Babylon—there were a lot of people in Hollywood that were very apprehensive about sound in movies because it wiped out a whole generation of silent movie stars who had terrible voices and couldn't articulate themselves. Brad Pitt in that movie is a perfect example.

Then there were people that didn’t like television. They thought it would kill the business, and the VCR, and digital, and streaming. All the different technological advancements that have upended Hollywood, the studios see AI as another one of those, and that if they manage it correctly, it can lead to more profitability, and, in their mind, more movies and TV shows.

Do you agree with that thesis?