Disney signs sweeping licensing deal worth $1 billion OpenAI is a sign Hollywood is taking it seriously Adapt entertainment to the era of artificial intelligence (artificial intelligence), marking the beginning of what Ark Investment analysts describe as a “pre-artificial intelligence and post-artificial intelligence” era of entertainment content. The deal allows OpenAI’s Sora video model to be used disney characters and franchises, instantly transforming a century of carefully guarded intellectual property (IP) into the raw material for a new kind of crowdsourced, AI-assisted creativity.
Nicholas GrouseDirector of Consumer Internet and Fintech Research at Ark Investments tells us wealth Tools like Sora effectively reproduce “Youtube A video production “moment” that puts professional-grade creative power into the hands of anyone with a prompt, not a studio budget. In his view, this shift will flood the market with AI-generated clips and series, making it harder for any new creator or franchise to break through than it was in the early days of social video. His remarks echoed those from Melissa OttoHead of Research, S&P Global Visible Alpha recently told wealth Netflix’s big move for Warner Bros. reveals the streaming giant is motivated by a need to deepen its cash reserves as it sees Google’s AI video capabilities explode with the advent of TPU chips.
Gruss said that as low-cost synthetic videos proliferate, he believes audiences will begin to mentally separate entertainment into “pre-AI” and “post-AI” categories, and value productions that were primarily produced by humans before generative tools became ubiquitous. “I think there will basically be a difference between pre-AI content and post-AI content,” he said, adding that viewers will view pre-AI content as closer to “real art that is created by human ingenuity and creativity rather than this AI crap, for lack of a better word.”
Disney’s intellectual property as fuel for artificial intelligence
Within this framework, Groos believes that Disney’s real advantage lies not just in Sora’s access, but in the depth of its pre-AI catalog across animation, live-action film, and television. Iconic franchises such as Star Warsclassic princess movies and traditional animated characters have become the cornerstone of a global experiment in AI-assisted storytelling, allowing fans to effectively test new marketing scenarios at scale.
“I actually think this is probably counter-intuitive, pre-AI stuff, harry potterthis Star Wars“All the content that we grew up with…is actually becoming more and more valuable to the entertainment space,” Gruss said. On the one hand, IP can become user-generated content in deals like Disney and OpenAI, but on the other hand, IP represents a strong content pipeline for future shows, movies and more, he said.
Gruss outlined a feedback loop in which Disney could watch as AI-generated character combinations or story settings resonate online, and then selectively “pull” the most promising concepts into professionally produced, higher-budget projects for Disney+ or theatrical release. He added that from Disney’s perspective, “We had no idea that Cinderella walking on Broadway and interacting with these types of characters, whatever it was, would be of interest to our audience.” The OpenAI deal is exciting because Disney can bring this content to its streaming arm, Disney+, and make it more premium. “We’re going to use the power of our studio to make it something more luxurious than an individual could create.”
Groos agrees that the emerging market for pre-AI film and TV libraries is similar to what’s happening in the music industry, where artists’ legacy catalogs, e.g. bruce springsteen and bob dylan Huge sums of money were raised from buyers betting on long-term streaming and licensing value.
Netflix’s big deal with Warner Bros.
For streaming rivals, the Disney-OpenAI deal is a strategic warning. Gross believes the surge in prices in the Warner Bros. bidding war between Netflix and Paramount illustrates the importance of intellectual property to the next phase of entertainment. “I think the reason (Warner Bros.) is approaching $100 billion-plus for this bid is the content library and the potential for a Disney-OpenAI type deal.” In other words, whoever controls Batman et al. will control the inevitable AI-generated versions of those characters, though “they could own a franchise like this.” harry potter Then create a slope around it. “
Netflix has a strong track record of monetizing libraries, Gruss said, citing examples of how libraries can be leveraged. discontinued american comedy suit Once it hit Netflix, its popularity soared, proving that a vast back catalog can be resurrected and re-monetized when matched with modern releases.
Graus quoted Nintendo Pokemon Go and Pokemon Go are both examples of under-monetized franchises that could see similar upside if their owners struck Sora-style deals that integrated the characters more deeply into mobile and social environments. “This is another company where you say, ‘Oh my gosh, the franchise they have, if they can bring it into this new era that we’re going through, this is a home run opportunity.'”
In this environment, Ark analysts say Disney’s OpenAI deal is less a one-time licensing win than an early template for how traditional media owners can survive and thrive in an AI-saturated market. He believes companies with a rich pre-AI catalog and a willingness to experiment with new tools will be best positioned to emerge from the “AI recession” and transform nostalgic intellectual property into durable, flexible assets for the post-AI era.
Underlying all of this is a broader battle for attention that reaches far beyond the confines of traditional studios and suggests that the realm between tech and entertainment has become even more blurred than when interlopers from Silicon Valley first flooded into streaming. Gross noted that Netflix itself has long viewed its competitors as TikTok and Instagram to Fortnite and Morpheus, this mentality is a natural fit for the coming wave of AI-generated videos and interactive experiences. (2017, Netflix co-founder Reed Hastings famously said, “Sleep.” is one of the company’s biggest competitors as it is busy pioneering the binge-watching game. )
Gross also warned of a post-AI content era: binge-watching won’t feel as good anymore, and there will be some kind of backlash. As critics such as new york timesJames Poniewozik Increasingly, people are noticing that streaming shows don’t seem to be as re-watchable as recent hits from the golden age of cable TV, such as mad Men. Gruss said he sees a future for endangered movie theaters making a comeback. “People are going to want to go out and meet or go to the theater. Like, we don’t just want to eat AI crap 16 hours a day.”
Editor’s note: The author worked at Netflix from June 2024 to July 2025.