Walt Disney Co. CEO Bob Iger said Thursday that the company’s blockbuster deal with OpenAI was about reacting to the reality of technological disruption, and that the agreement provides a framework for AI companies to value and respect human creativity.
Iger appeared alongside OpenAI CEO Sam Altman on CNBC Thursday morning, where he also suggested that regulators should scrutinize Netflix’s proposed acquisition of Warner Bros.
“We’ve always viewed technological advances as an opportunity, not a threat. First of all, you can’t do anything about it. No human generation has ever stood in the way of technological advance, and we don’t intend to try,” Iger said, noting that Disney was the first company to put its content on Apple’s iTunes store. “So we’ve always felt that if it’s going to happen, including disruption of our current business models, then we should get on board and figure out how we advantage our company and our shareholders, you know, by moving forward with a sense of optimism and being aggressive about it.
“If it’s going to happen regardless, then we’d rather participate in the rather dramatic growth, rather than just watching it happen and essentially being disrupted by it,” he continued. “So we think this is actually a way for us to be part of these developments, as opposed to be harmed by them.”
As for what consumers can expect with the Sora deal, Iger said that the deal encompasses some 200 characters, as well as props (like lightsabers) and worlds from Disney IP. Notably it will not include the voices of characters. Sora users will also be able to insert themselves into scenes. The deal is partially exclusive, meaning that Disney characters will be exclusive to Sora for a window (Iger suggested it is around a year).
“The demand for Disney characters in particular, from our users, is sort of off the charts,” Altman said, when asked if OpenAI is looking to cut deals with other entertainment companies. “So I won’t rule out anything in the future, but we think this alone is going to be a wonderful start for what our customers want to do when it comes to putting themselves in that one lightsaber fight from Star Wars, or making a Buzz Lightyear custom birthday video for their kid. I think this is going to be quite a big deal for our users.”
“This is a great opportunity for the company to enable consumers to engage with our characters on what is probably the most modern of technology and media platforms today, and it not only gives users an opportunity to do so, but it also is significant because in this deal, OpenAI is both respecting and valuing our creativity, both our characters, but also those that have created those characters,” Iger added. “So it gives us an opportunity to play a part in what is really breathtaking growth in AI and new forms of media and entertainment.
“We are not including name and likeness, nor are we including character voices. So in reality, this does not in any way represent a threat to the creators at all,” Iger continued. “In fact, the opposite. I think it honors them and respects them, in part because there’s a license fee associated with it. The other thing it does is it enables us to be comfortable that open AI is putting guardrails essentially around how these are used.”
“There will, of course, be guardrails,” Altman emphasized. “It’s very important that we enable Disney to set and evolve those guardrails over time.”
As for the battle for Warner Bros. between Netflix and Paramount, Iger said that “we haven’t determined whether we’ll take a position or not,” but when discussing what regulators should look at as they scrutinize the deals his point of view was hard to miss.
“If I were a regulator looking at this combination, I’d look at a few things. First of all, I would look at what the impact is on the consumer,” Iger said. “Will one company end up with pricing leverage that might be considered a negative or damaging to the consumer, and with a significant amount of streaming subscriptions across the world? Does that ultimately give Netflix pricing leverage over the consumer, that it might not necessarily be healthy?
“Additionally, I’d look at what the impact might be on what I’ll call the creative community, but also on the ecosystem of television and films, particularly motion pictures that these movie theaters, which obviously run our films worldwide operate with relatively thin margins, and they require, not only volume, but they require interaction with these films and these movie companies that give them the ability to monetize successfully,” he continued. “That’s a very, very important global business. We’ve been certainly participating in it in a very big way, we’ve had 33 $1 billion films in the last 20 years. So we’re mindful of protecting the health of that business. It’s very important to the what I’ll call the media, media ecosystem globally.”
