How Hollywood is adopting genAI: slowly but also steadily

Deloitte has made its predictions for 2025 and the bits concerning the adoption of genAI and Hollywood make for some interesting reading.

Giant accounting firm and professional services network Deloitte produces one of the most interesting annual reports looking at the whole media, technology, and entertainment sector. The fun part is usually not only getting a better understanding of what is going on around you, but also in indulging in a bit of crystal ball gazing for the year ahead, and the TMT Predictions 2025 doesn’t disappoint.

As you would expect from a company of close to half a million employees, there’s a lot to dig into. But our attention was drawn to what it’s currently saying about generative AI, how it will be implemented by the major Hollywood studios over the coming period, and the contrast with independent content creators and social media platforms.

Slow and steady

In a word, Hollywood is taking it all cautiously. “In 2025, Deloitte predicts that the biggest TV and film studios—especially those in the United States and European Union—will be cautious in adopting generative AI for content creation, with less than 3% of their production budgets going to these tools,” the authors write.

It reasons that cheap, off-the-shelf large language models and diffusion models are helping studios to experiment with rapid prototyping of scripts, dialog, and story elements, pre-vis and set design. But while genAI can enable greater creativity in pre-production, it cannot yet deliver Hollywood-level productions. With copyright and legal concerns also making studios wary, Deloitte says that the real push forward in to the brave new world will be elsewhere.

“The year ahead will likely see independent creators leading the way in content creation with generative AI. This could help studios defer their own risks while they watch to see how the capabilities evolve. But it could also cede more attention time to user-generated content platforms that are becoming highly competitive with traditional media.

“Gen AI tools seem poised to help more smaller companies and creators to achieve the kinds of productivity and levels of quality once reserved solely for the largest companies.”

One interesting prediction it makes for 2025 is the possibility of deeper partnerships between the studios and AI developers. In this scenario, the developers would provide a pre-trained model and interface that can then be further trained and customized with content owned by a studio. And we already know several of the leading gen AI providers have been courting studios to do just this.

“The model could then deliver generative content that follows the aesthetic of a studio, for example, or includes their signature characters and set pieces,” argues Deloitte. “Additionally, studios might be able to control against potential IP concerns by showing derivations from their own content.”

The tortoise and the hare?

Given the feeling of the leading unions about all this, the studios though are having to tread very carefully. Which is probably why it is with independent content creators that Deloitte sees the next big push coming. “Hollywood studios once enjoyed controlling the scarcity of content and distribution, but now these are both abundant and democratized. In the year ahead, the sense of looming content disruption will likely only grow.”

Which is a statement that manages to mix the sense of both exciting and rather perilous times ahead.

However, there is one area where Deloitte sees genAI growing more rapidly within Hollywood and that is where studios can save costs without worrying about some of the wider issues that are holding back adoption.

“We also predict that operational spending will shift about 7% into emerging generative-AI-enabled tools supporting functions like contract and talent management, permitting and planning, marketing and advertising, and localization and dubbing of content that can expand their reach into diverse global markets.”

This approach will certainly help studios slow the potential disruptions that gen AI can pose to talent and content, while at the same time more quickly adopting gen AI tools that can help reduce costs and accelerate performance across their businesses. 

“However, independent content creators and social media platforms are moving quickly to adopt gen AI into their workflows and content, potentially enabling new forms of media to emerge that could further disadvantage traditional studios competing for scarce attention time,” the report concludes.

tl;dr

• Deloitte predicts that major TV and film studios will adopt generative AI cautiously, allocating less than 3% of their production budgets to these tools, primarily using them for rapid prototyping and pre-production aspects.
• The report suggests that independent content creators will spearhead the use of generative AI in content creation, potentially drawing viewers away from traditional studios and increasing competition with user-generated content platforms.
• Deloitte envisions deeper collaborations between studios and AI developers, allowing studios to customize generative models while addressing IP concerns and maintaining creative control over content that reflects their unique aesthetic.
• Studios are expected to allocate about 7% of operational spending towards generative AI tools that enhance functions such as contract management, marketing, and localization, which could help mitigate disruptions in talent and content while improving efficiency.