Jeffrey Katzenberg has a message for Hollywood about artificial intelligence: you can fight the technology, or you can fight over the terms. He thinks only one of those battles is winnable.

That is the real point of his September 23 essay, “The World is Changing: AI For Creativity.” The former Disney studio chief and DreamWorks co-founder is not arguing that AI is ready to replace human creativity. He is arguing that AI will become embedded in entertainment production whether Hollywood likes it or not. So creators should spend less time trying to stop the train and more time negotiating who gets a seat, who gets paid and who gets flattened on the tracks.

Katzenberg does not sugarcoat the uncomfortable part. Technological change eliminates jobs. Some do not come back. His prescription is consent, credit and compensation for creators as the industry changes.

Coming from almost anyone else, this might sound like another billionaire explaining disruption to the people being disrupted. Katzenberg has a better résumé for the assignment. He ran Disney’s studio during its animation renaissance, co-founded DreamWorks and lived through the transition from hand-drawn animation toward computer-generated production.

There is also a fairly large asterisk: Katzenberg is now planning an AI-focused animation venture himself. This is not a meditation from the Hollywood balcony. He has chips on the table.

Why Now? Because the “Slop” Is Getting Better

Until recently, Katzenberg says, much of what he saw from generative AI looked like “slop.” Over the past several months, the slop apparently got good enough to change his assessment of how quickly the technology would matter.

Hollywood has been moving too. Studios are exploring AI as a way to make entertainment faster and cheaper. The guilds, meanwhile, increasingly focus on governing AI rather than pretending it can be wished away. SAG-AFTRA emphasizes consent, compensation and control around digital replicas and synthetic performers. The WGA has secured AI protections and notice when writers’ work is licensed for commercial generative-AI training.

So Katzenberg did not fire the starter pistol. He looked up, noticed everyone was already running and grabbed a microphone.

The Case For Inevitability

Hollywood has an enormous financial incentive to use tools that can reduce the cost of storyboarding, previsualization, visual effects, animation, dubbing, localization, editing and other production work. If one company can make comparable entertainment materially cheaper and faster, its competitors will have a difficult time announcing that they prefer the expensive version on principle.

Entertainment history is not especially kind to technological abstinence. Recorded sound did not retreat because theater musicians objected. Home video survived piracy fears. CGI survived anxiety over traditional animation jobs. Streaming survived media companies’ deep and abiding love for the cable bundle.

The fight usually migrates from whether a technology will be used to how it will be used. On that point, Katzenberg has history on his side.

Cracks In Katzenberg’s Logic

His argument gets shakier when productivity turns into prosperity. The optimistic chain goes like this: AI makes productions cheaper, cheaper productions mean more productions, more productions create more opportunities, and eventually everyone frolics through a meadow of newly created entertainment jobs.

Maybe.

But there is a missing step large enough to park a studio backlot in.

Suppose a $150 million animated movie can eventually be made for $40 million. A studio could make four movies. It could also make one movie and keep most of the $110 million difference. Both choices make economic sense. Only one creates a lot more work.

That is what makes Katzenberg’s previous 2023 prediction that AI could cut the time and cost of world-class animation by as much as 90 percent so provocative. The percentage is speculative. The direction is not. If 100 people can eventually do what once required 500, employment does not magically expand because the spreadsheet has prettier margins.

It is also important to note that Katzenberg’s own history lesson contains the best argument against excessive optimism. Recorded sound created professions in recording, sound design and music production. That was cold comfort to the theater violinist whose job disappeared in 1928.

A technology can be good for an industry, good for consumers and brutal for a particular group of workers at the same time. New jobs may emerge, but they need not go to the same people, exist in the same numbers or pay comparable wages.

Katzenberg deserves credit for acknowledging displacement instead of promising that every storyboard artist will simply become an AI supervisor by Tuesday. But acknowledging the casualties is not the same thing as solving for them.

The Case for Cheaper Hollywood

There is a real upside. Hollywood’s escalating production costs have made risk terrifying. When a movie costs $200 million to make and another fortune to market, failure becomes a corporate event. Suddenly another sequel to something people already recognize starts looking wonderfully adventurous.

Lower the cost of making high-quality entertainment and the calculation changes. A filmmaker who needs $10 million instead of $50 million can take chances that would never survive today’s greenlight meeting. A small animation team may eventually create images that once required the resources of a major studio.

For consumers, that could mean more ambitious small productions, better effects at lower budgets, faster localization and more experimentation. Perhaps even the occasional original movie that was not previously a toy, sequel, reboot, cinematic universe or theme-park attraction.

Welcome to the Infinite Content Problem

Of course, if professional-looking entertainment becomes astonishingly cheap to manufacture, we may also get buried under it.

Consumers already have more entertainment than any human could consume in several lifetimes. AI can turn abundance into something approaching infinity. At that point, content becomes cheap. Attention becomes expensive.

That could make the biggest distribution platforms even more powerful. Netflix, YouTube, Amazon and Disney control discovery, recommendations and audience relationships. If ten thousand polished new shows arrive every afternoon, making one cheaply is only half the battle. Getting anyone to notice it may require a miracle, a franchise or a very cooperative algorithm.

AI may democratize production without democratizing distribution. That is one of the most important wrinkles missing from Katzenberg’s essay.

The Real Fight: Who Gets the AI Dividend?

Strip away the futurism and Katzenberg’s core argument is economic. AI will reduce the labor required for at least some entertainment production. Human taste, intention, empathy and imagination will still matter. The question is who captures the value created when fewer resources can produce the same result.

Studios can keep the savings. Technology companies can charge for the tools. Investors can take the returns. Consumers can get more or better content. Creators can bargain for compensation, participation and protections. In reality, the dividend will probably be divided among several of them.

But nobody receives a fair share merely because fairness has excellent reviews. Katzenberg’s strongest point is that creators need to negotiate while the rules are still being written. Waiting until AI workflows become standard operating procedure is a terrific way to discover that somebody else already spent the savings.

Will Katzenberg Change Minds?

Probably not at the poles. People who believe generative AI rests on uncompensated appropriation of creators’ work are unlikely to reconsider because Katzenberg mentions the phonograph. Technology companies convinced that training on copyrighted material is lawful are equally unlikely to start writing checks because Hollywood asked nicely.

The more important audience is the large middle: executives, producers, directors, writers, actors and craftspeople who are neither anti-technology nor eager to surrender their leverage.

For them, Katzenberg offers a framework that resembles where Hollywood’s labor negotiations are already heading: use the technology, but establish enforceable rules around training, likeness, consent, credit and compensation. He is not single-handedly changing the AI debate. He is putting a famous Hollywood voice behind a direction already taking shape.

The Technotainment Takeaway

Katzenberg is probably right about the part Hollywood least wants to hear: AI is not waiting outside the studio gates for permission to enter. The tools will improve, costs will fall and some jobs will change or disappear.

But “inevitable” is not the same thing as “inevitably good.” Cheaper production could unleash smaller creators, riskier ideas and better entertainment. It could also mean fewer jobs, fatter margins and an ocean of synthetic content competing for the same 24 hours in everyone’s day.

If AI lets 100 people do the work that once required 500, the value of those missing 400 jobs does not evaporate. It goes somewhere. Katzenberg’s message to creators is to get to the negotiating table before someone else decides where.

And then, two days after telling Hollywood that AI is inevitable, he announced plans for an AI-powered animation venture of his own.

In Hollywood, nothing says “the future is unavoidable” quite like making sure you own a piece of it.