Creative Evolution: A Tech Insider’s View of Hollywood’s Next Chapter

Culture & Code Interview with Seth Hallen

John Gauntt [00:00:06] This is Culture and Code, a podcast about creativity and artificial intelligence. I’m John Gauntt. Culture and Code explores innovation across storytelling, technology and audiences to help professional creators collaborate better with AI and each other. Support this podcast by subscribing to our newsletter. Visit our website, cultureandcode.io.

John Gauntt [00:00:32] This show features Seth Hallen, a creative technology executive and investor with over 25 years running companies across production, post-production services and technology. Along with being a founder and investor of a creative AI startup, Seth is past president of the Hollywood Professional Association, which is a nonprofit that advances the art, science and business of the media and entertainment industry. Additionally, Seth is a member of the AI Task Force and Production Executives Peer Group at the Academy of Television Arts and Sciences. Now, in this conversation, Seth and I will expand on ideas he introduced in a series of articles entitled Beyond AI: Unraveling the Economic Disruption Shaping Hollywood’s Future.

There are numerous well researched essays about the economic and technology shocks impacting Hollywood and the rest of the creative economy. But what drew me to Seth’s work was his mission to help the creative community recalibrate its focus, reorganize this mentality, if you will, in order to navigate today’s challenges. Because, after all, Hollywood has experienced multiple cycles of disruptive change for over a century. And so part of our job today is to pinpoint what’s actually different about today’s environment, but also what principles have held true across time. So, Seth Hallen, thank you so much for speaking with the Culture and Code Podcast.

Seth Hallen [00:01:54] Thank you so much, John. I really appreciate the opportunity to have this conversation.

John Gauntt [00:01:59] So let’s start with your background. You know, rather than particular jobs or positions that you’ve held, what was it about the creative industries and Hollywood in particular that grabbed you where you thought, my God, I’ve got to make this my career?

Seth Hallen [00:02:13] I love this question, John. I could, I could talk about this for hours, but just to kind of cut to the chase, it started when I was younger, just really enjoying movies and TV shows. I found myself experiencing things and having these emotions that I wouldn’t otherwise have felt in my normal life, and just found myself really sucked in and drawn into these stories. And these storytellers started paying attention to who was telling these stories, who were the directors, who were the writers, you know, that kind of a young age and kind of geeking out about it in that way. And then fast forward to later. I entered into the business later in my 20s and and I had an early experience as a television producer. That was probably my first legit creative job, not my first entertainment industry job, but that was probably my first touch at creativity. And now I want to be careful. I am not I do not consider myself a creative. I am a creative enabler and a technology enabler as well. And so my early experience gets me actually into how technology participates in human creativity. And that’s really the essence of what I’m passionate about and have been for for a very long time.

John Gauntt [00:03:37] So for people who aren’t familiar, let’s distill Hollywood’s business model and culture that turns a creative idea into an audience experience, whether for the big screen or the small screen. Basically, what are the core moving parts for film and television, and who are the key tribes that have to work together?

Seth Hallen [00:03:56] Sure. So, whenever you everyone knows at the end of a movie, for example, you have dozens, hundreds of names, in the credits scroll. So, the answer is all of those people working at peak performance that that ultimately contribute to a successful story being created. Obviously, the Director is traditionally the the CEO of of the production, has that creative vision knows what they ultimately want the story they ultimately want to tell, and and how they want it to look and so on and so forth. And of course, then trickling down all of the the people around the Director will be essential that know that the Director of Photography, who will be able to translate this vision and the Director’s head into capturing the right shot, the the shot compositions, the lighting and things like that. And and of course the Editor that can make those edits and essentially assemble all of that rough material that was shot out on set. And it sort of goes on and on. But but arguably starts with the Writer and assuming that writer is someone other than the director, that that Writer originally had an idea for a story. And and most times, traditionally, those stories start with words on paper, which is the script. And I think it’s it’s it’s certainly traditionally held that it all starts there need to have a solid script solid story as a foundation to to the rest of it. So so of course the Writer at the very beginning of the storytelling process is certainly the first essential component.

John Gauntt [00:05:51] So, so if we were to put that in sort of one major category of the dramatic narrative, you know, without this is the rest really doesn’t matter. But then there’s got to be the resources and the talent that take that take those words and turn them into experience. So roughly speaking, how is film and television financed? If I live in the under Hollywood’s traditional models, whereas like, I got a great story, I got a director, we know what we want to do dramatically. Now we need to raise the resources and organize the talent. Can you walk us through that very briefly.

Seth Hallen [00:06:24] Sure. And again, it’s a snowflake situation, so every project is different. But in in general, to answer in general terms, allowing for plenty of room for, you know, there’s all sorts of variations of this. In general terms, a Writer is writing a script. That Writer is represented by a talent agent, and that agent would bring these scripts to the correct, proper studio executives. You know, there is no world where people, writers can willy nilly just send scripts into the studios. They won’t look at it well. And it makes sense because of IP. You know, if that script just so happens to be very similar to something else they have in development, they they will they won’t open it. Right. So so but that’s getting a little rabbit hole. The point is the Writer has a an agent and the agent will work with their relationships and the studios to try to get a as some sort of a development deal on that script. Then the process is the studio, you know, is interested, decides to do a development deal, invest some level of money to finish and polish the script. They might start assembling, you know, some of the other key folks, the Director or the the key talent or Producer. And but they they want to like usually traditionally finalize and polish up that that script while they assemble some of the other components. And then at some point hopefully that project is greenlit and and then the rest of the process starts to run.

John Gauntt [00:08:18] In your introductory essay to the series about AI’s impact on Hollywood, you wrote, and I quote, “The economic disruption we’ve seen isn’t just about technology. It’s about the fundamental ways in which film and television content is made, distributed and monetized.” So let’s use those three buckets as our premise. How is film and television content made, distributed, monetized? What is it specifically about AI that you see impacting how Hollywood creates, distributes and monetizes content?

Seth Hallen [00:08:50] The foundational sort of premise of that statement that you read out was to point to really what the fundamental change is about. And I will answer your question around AI but I think this is an important point because during the strikes AI did become a headline and in it and it became such a headline because by the way, AI was a headline everywhere. Or if you remember in the first half of 2023 and still is and and it became a headline and it it got conflated with the real sort of cause of of the disruption which had nothing to do with AI. The the root cause of the strikes and the current disruption cycle that we’re going through. How do not have AI is not the root cause. It is it is if anything, it’s the Internet because of enabling streaming models and and all of the consumption habits and patterns and all of the monetization and all of the revenues associated with streaming, which which is a fundamental difference in the way Hollywood has traditionally been structured for 100 years. And that was that you you invested a certain amount of money in, let’s say, a movie, and you knew how much that was. Yeah, it was a, it was an actual quantifiable amount. And then you knew how much revenue you would be able to generate from that movie. And then you add up those numbers. At the end of the day. Did you make money? Okay, great. We did. Let’s move on to the next movie. The streaming model is not about an ROI or return on investment on each particular project. It’s about generating subscribers. And so, you have to spend a bunch of money making or licensing content, but that’s content spend and then drive up subscriber revenues and hopefully you’ve got a a margin there which is fundamentally different. And let’s not gloss over that because that is so different than the traditional studio structure that it could take a very long time if, if ever, for a traditional studio to to try to adapt to that model. It’s just a completely different business. So, last year, what what led into the strikes was this notion of proper pay because streaming made that kind of relationship and and the dynamics of the economics opaque. You know it you know how does someone, a writer or an actor understand how much value or how much revenue has been associated to a particular piece of work that they participated in? You know, in traditional television syndication, it was pretty easy. So, this particular movie or this show was picked up for syndication and you can follow track ratings or, you know, all these different ways to to kind of quantify that. And it was pretty easy then to attribute a certain pay to that. In the streaming model, it’s it’s much more difficult to to kind of track and most of the streaming platforms, you know, even themselves have some difficulty trying to attribute this particular show to how much revenue or how much did this show bring, how many subscribers did it bring in? How can that’s almost not knowable. You can see trends when this particular show launched on a particular platform, how many subscribers came in the next day or the next week? But it’s still not an exact science. So, it becomes very difficult for there to be this negotiation on on that. And and on top of it, and I think this is the last little important point. Most of the streaming models are not profitable. Most of especially the traditional studios are losing have lost in it, let’s call it invested billions of dollars in streaming so far without profit. And so when you think about the artists who I do care deeply for coming into their contract renewal with the studios comes up, they they are entering into a situation where they feel like they want to renegotiate. They want to get they they feel like they should be paid more for their work in this streaming world. But you have the traditional studios who have lost and invested so much money, they’re not profitable yet, let’s put it that way. You know, that that that already is is a real tough negotiation. It was inevitable. It was going to a strike situation.

John Gauntt [00:13:48] So what were some of the factors that drew you specifically into investigating AI’s impact on the creative industries?

Seth Hallen [00:13:56] Yeah. So, when we talk about the impact of AI again, I want to emphasize first that AI is not a root cause to the current disruption cycle. If anything, AI and other related advanced technologies will be part of a of an ongoing legacy of new technologies that have been introduced to the storytelling world since the printing press. Okay, So so it’s just the next generation of of technology that will enable human storytellers, you know, how will it impact you said it will accelerate the process. So, first of all, to answer that, I want to say as as a fundamental thesis, from my perspective, I will maintain that that there’s a human creative component to this that is not replaceable by machines, at least not now, and not, I believe, in the foreseeable future. The human imagination is, is and being inspired by all of the that that that person’s, you know, experiences and emotions and then the things that are happening now that human might be dreaming and and that that sort of creative process I think is fundamentally human and I think extremely important to focus on. Now with that, there is a process and a practice to developing stories. Writers might be born with this innate ability to imagine new stories and visualize those stories. But the practice of building a script with the right structure, being able to and then extrapolating that process out across the entire production sort of pipeline. Those are skills that are built and developed. And, you know, when you think about it, the the the person might be gifted with this vision in their head, this story in their head, that they enjoy thinking about themselves and watching in their own mind. But to get that out on a physical media, an on a form of physical media that other human beings can and get immersed in is very difficult. And a lot of that is full of of of skills that that are learned and developed through through many years. And I and I see that continuing to be the case. Now where AI can come in. Is. Let’s take the writing. I don’t think you put a prompt into AI, and it’s going to create a script anywhere near as good as human can. It’s going to look like creating, but it’s actually recreating already created data. The style, the sensibilities, the timing. Those nuances are what make the difference from an okay story to an amazing story. And that’s uniquely human. But where AI can help is every writer, for example, is inspired by by anything else that writer has read or stories they’ve experienced. And and there is an iterative sort of conceptual concept and sort of process that that all creativity starts with, especially when it’s art for commercial purposes or if it’s art for commercial purposes or creation for commercial purposes. You’re creating a product and there’s a there’s a process to that. And where AI can come in is, for example, helping with that concept phase and things like, you know, even once the script is written, you usually a writer would send that to their mentor or a writing partner and give me first read notes. And a lot of those notes are actually technical notes, not necessarily creative, you know, continuity, character arcs, certain things like that. And AI can do that very well. So in that sense, you take a script, you run it through an AI tool instead of sending it to your mentor first, you send it to the mentor. It’s going to take a few days or a week for them to get back to you. Well, AI could do that first pass in a few seconds and then on to a script breakdowns and listing all the the locations and wardrobe and everything else. But from a story copilot perspective, it’s very effective.

John Gauntt [00:18:41] So let’s let’s pivot and talk about talent in this new environment, because obviously Hollywood, like many other industries, is a talent driven business. So how are you seeing Hollywood’s dramatic technical and business ecosystems responding to the latest disruption? You know, like who who do you think is is acting like they’re ahead of the curve with the curve will, you know, scrambling to catch up?

Seth Hallen [00:19:05] Yeah. So again, in in Hollywood, the economic the economics that are part of the new streaming model, which doesn’t just include Netflix and Apple and Amazon, but also includes the free content platforms like YouTube and TikTok and the rest of them for that. That is the disruption AI has not disrupted actually physically the entertainment industry yet, as far as I can tell. And maybe there’s listeners that are going to scream and yell at me and feel free to reach out. I am not aware of one single job that has been lost because of AI. There are tens of thousands of jobs that have been lost by because of the economic impacts of streaming, but nothing related to AI yet. But you know, we can we can point to some jobs that have specific tasks that will be replaced by AI, but that’s no different from every other technological turning point. You know, when we went into digital filmmaking, Pixar, for example, up until then, there was a lot of hand drawing of of elements in 2D animation for many years. And certainly if you were committed to being a a hand illustrator for animated films, you might have to think about evolving your skill set, you know, when that came out. But and I could point to probably 100 different, you know, examples of, of how certain tasks have been replaced by technology.  Film splicers, you know, editors that used to cut film is another one. And we could go on and on. But, but but at the end of the day, there were even more stories. There were more consumers, there was more time to watch content. There were a need for more stories to be told and more people to work on those productions and more jobs. I mean it every technological turning point a lot along the way further expanded the content creation and monetization industry. And I don’t think this is any different. I think we have no reason to believe that this is any different. And until we see that it’s different, we have to assume that that it is is going to follow the same calculus. There are going to be new types of jobs, new roles that are going to be needed. And and there are going to be some tasks that are going to get replaced. But those humans can certainly choose to upskill if they if they want, you know, if they want to. And again, I’m not saying anything that that’s been different from the last 100 years.

John Gauntt [00:22:05] Well. If we use Pixar as an example, which, you know, not only did they redefine animation with Toy Story, which was not only an incredible experience, it was a hell of a story to begin with. You know, that was one of the know the best marriages of storytelling and technology. But you could also say Pixar brought in a new mentality, one that was born of more of a software and networking organization, how you would organize those kinds of projects. So if we were look at Hollywood and media, the entertainment companies in particular, what would be some attribute that you would look for in a company above and beyond? They use the tools where you would say they’re operating in more of an AI native way or a native way for the new realities were, you know, how would they be organized? What what would they be doing that’s different from other companies today?

Seth Hallen [00:23:01] It’s a great question. And the answer is looking for technologies that empowers, unlocks and unleashes the next level of human creative potential. And that is what Pixar did. Since we use that example, Pixar going back to concepting is what Pixar one of the things Pixar enabled was this notion of being able to accelerate the concept process. So, for example, if if somebody had this idea about Woody, the Toy Story lead character in the traditional world, there would have been an illustrator that would draw by hand a whole bunch of different sketches. And and then whoever was the lead visionary of the project, the director or what have you, would then give notes and say, Try this, that and the other. And the illustrator would go back and and after however long that took days or week or whatever. In the Pixar platform, it was essentially a platform to be able to more quickly iterate on different designs and get them animated more quickly. You could essentially render out the movement the way that character walks or looks or talks much more quickly. And we would laugh at the speed today because of course that could still take a lot of time to render just even a little quick back then in the 90s. But but essentially I see Pixar as a platform that unleashed and unlocked storytellers in new and meaningful ways. The end product was these sort of more realistic looking, really interesting 3D you know environments that had this kind of we knew it was animation, but it had this realism to it that drew you in. And so again, what an example of empowering, unleashing, accelerating, unlocking the human creative process. So today I think AI absolutely will continue that legacy, that same legacy. And I personally look for technologies that do that, especially as it relates not only the creative process, because there’s other processes like building communities and monetizing content and and driving other types of decision making and making the picture quality look good and, and, and some of those things. But but I look for tech typically that will unleash an unlock human storytelling potential.

John Gauntt [00:25:30] Up to now we’ve been speaking mainly on the supply side of media and entertainment, how the studios work, how the town, how everyone works. But if we look on the audience side, well, they’re content creators too now. So especially in the way that you’re seeing the next version of Hollywood starting to evolve, how do you see the changes in the relationship between creator and audience being being transformed when you have a medium like AI that can actually help the audience be able to make pretty high res and high fidelity type of digital content, you know, To what extent do you think we will be distinguishing between professionally produced content that is worthy in its own right to be paid for? And the user generated content, which can be just as necessary to the ultimate success. You know, fan fiction that helps drive a media brand up. Now, how do you see that a relationship evolving?

Seth Hallen [00:26:29] So I think to answer your question, I don’t I like to think of it this way. Instead of thinking about it as audiences creating content, I think it’s just unlocking a new new communities of visual storytellers that have just as much a right to to get their visions from their head onto a platform that can be shared with others as anyone else. And I think that process will continue to get democratized. I think that that those those folks that want to use this these AI tools to tell stories are storytellers versus somebody that’s doing, you know, pranks, you know, and on, you know, on people and putting them on Tik Tok, which I’m a fan of myself, but but I don’t you know, we can debate whether or not those are stories or not. But but I think there’s a difference between sort of user generated content and on how to videos or, you know, some of this funny entertaining stuff versus, you know, people that that are earnest about creating stories, too. And so to answer your question, I do think that there’s going to be new there are going to be new communities of storytellers that are unlocked and unleashed through the democratization of these AI tools. But again, that is a continuation of a legacy of something that we’ve been seeing through the last, you know, 15, 20 years through desktop applications that put a lot of powerful editorial and VFX and and sound and music creation in the hands of more people. And I mean, again, that has been good for the industry that that has enabled more content creators, creating more content and more monetization opportunities. So so I think the answer is this AI will will continue to follow that legacy and continue to unlock and unleash new storytellers that I’m excited about. And then part of that is how that gets monetized. And I do think there are going to be changes and opportunities really for for content creators to monetize their content new and meaningful ways. Question to ask is, is there anything in between a YouTube video and that’s a YouTube channel and Netflix for example. And of course there’s lots of smaller channels on the Apple TV store. You can download, you know, different things like Shudder, which is our movie channel. But but I guess is there something else that’s able to be able to empower truly independent storytellers that can help them distribute and monetize their content? It’s interesting question that I don’t have an answer for, but I’m asking it.

John Gauntt [00:29:20] So just to just wrap up, what are some things that you’re seeing in the way that Hollywood has operated as a as a focused storytelling community that you think has resonance to the rest of the economy?

Seth Hallen [00:29:33] Yeah. I’m going to be a little controversial and say I don’t think Hollywood is a good example of how to embrace the next generation of technology, especially at the moment. I think Hollywood is behind big time. I think other industries I’m observing are much more ahead. I think Hollywood is stuck and afraid and and and and not talking and doing enough in this area personally. But my advice to the world is lean into this, learn about learn how to use some of these tools, whatever your trade is. Although I don’t think it’s an absolute statement. But, you know, this notion of you’re not going to be replaced by AI and you’re going to be replaced by someone else who uses AI. I think that that is is a safe way for us to think about it now, and especially if you’re afraid or you just don’t know and you don’t have the right level of knowledge about this, start to think about it that way and start to lean in. There’s so many free tools though, so depending on just do a quick Google search on, you know, tools for my industry that that have that are AI powered and download some of them or sometimes use it there on a website and you have free access immediately and start to use them. There are courses, free courses on Coursera that have dozens, maybe hundreds of courses for every field of, of of every industry that can help you quickly get up to speed on on these tools. So I think we all need to be open minded to new ideas, new technology. And new human beings that that have have these fresh perspectives bringing into our various fields.

John Gauntt [00:31:28] Last question. What’s the best way for people to find your work and then to find you?

Seth Hallen [00:31:33] I’m on LinkedIn every day. So you could you can find me there. And also, for those in the media and entertainment industry, you can certainly get more information on HPA, which is HPAonline.com.

John Gauntt [00:31:50] So Seth Hallen, media and entertainment executive and investor, thank you so much for speaking with the Culture and Code podcast.

Seth Hallen [00:31:57] John thanks so much for having me and hope to connect with you again soon.

John Gauntt [00:32:03] You’ve been listening to the Culture & Code podcast, Creativity and Artificial Intelligence. You can find us on all major podcasting platforms and our website cultureandcode.io. That’s one word cultureandcode.io To support this podcast, subscribe to our email newsletter for a weekly round up of analysis news plus AI training and growth opportunities for creative professionals. It’s all there at cultureandcode.IO Culture and Code is a creative studio and professional education provider that’s part of The Augmented City LLC. I’m John Gauntt, inviting you to the next episode of the Culture and Code Podcast. Thanks for listening.