AI on the Lot and The Crazy Box Office Weekend

It's been this headliney thing of like, okay, it's the YouTube generation of, like, directors is here. We went from, like, the Sundance generation in the '90s and 2000s- Yeah... and the launch of those directors, and then now it's this, like- Love it... YouTube generation.

I think there is, like, some distinction there, though, when we think about this, 'cause YouTube's also so massive and the creator economy's so massive. And what do we mean by that, and what could take away from that? Welcome back to Denoised. Addy, how you doing?

[laughs] Good to see you, sir. Long time. [laughs] Yeah. I, I barely saw you at AI on the Lot.

I was not here last, last week. Exactly. [laughs] But, um, yeah, everyone's like, "How was AI on the Lot?" And I was like, I was in the back rooms of Culver Theater for two days straight, [laughs] so I, I only saw the after party stuff.

[laughs] How was your experience? I was, I was, I was doing the fun part for you, just schmoozing with everyone. Yes. [laughs] Yeah.

How'd it go for you? It was... Man, um, shout out to Todd and the AI on the Lot team, Corinne. Uh, this year was so much bigger than last year.

As you know, you were there, barely. Um, we- [laughs] The, the, uh, the team took over three or four different studio lots, including Studio 15, which is the big Amazon giant volume. Uh, a lot of the keynotes were there. And it's not just about the size.

Of course, there was thousands of people. The entire thing was sold out, but it still felt really intimate and like you still knew everybody. The, the technical sessions were still relatively small, where you can ask questions. People were well-fed and sort of there was stuff to do afterwards, before.

And, um, yeah, it's like the, it's like the opposite of NAB or CES, where it's like this giant corporate thing. This feels like it's home-brewed, but at the same time it is getting bigger and, uh, yeah, we'll see how, what, what happens, but I really enjoyed it. Yeah, I mean, the one comment, especially people that had been in previous years, was like, it just keeps getting bigger and bigger, and this was, like, the biggest. I think 2,000 people at its peak- Yeah...

were there, which is, which is crazy. But yeah, no, I mean, Todd's pulled off a great event. Mike, Ames, Kelly, the whole team, uh- Ames... shout out to Todd.

Shout out to Ames. Yeah. Yeah. If, if- Ames...

I see Ames in a headset, you run the, in the other direction. [laughs] I'd have to call her with some stuff, and I'm like, I just feel so low [laughs] with what other stuff she's dealing with. I feel bad calling her. I know, I know.

Uh, but no, they were great. And- Yeah... but yeah, to your point, it was like everyone involved in AI in some s- respect is there. And- Yeah, and even, like, I met a lot of people, um...

So I get a text from a friend from Netflix, and he's like, "Hey, uh, are you at AI on the Lot? I'm here." And I was like, "Yeah, sure." So we meet up by the, by the coffee and the coconuts.

You know where I'm talking about. And, uh, he's like, "Look, I know nothing about AI, and that's why I'm here." And that is my point. It's like if you don't know anything about AI, it's not too late to just come in cold.

Um, I think that's a great event for you to just come in cold, look at the panels, meet people, get a gauge on things. So I thought, I thought that was really interesting that we're still having a lot of entrances into this industry. Well, I think that's the big... I think that's kind of a common theme and sort of the big turning point this year compared to previous years, where it, there's more things actually in production using AI.

Yep. It's more open, and it's also kinda clear that it's here. It's coming. It's not going away.

Mm-hmm. It's not like, uh, it's proved itself in some capacities only to keep getting better. Yeah. And so anyone that was on the fence about it is now like, okay, I gotta, like, figure out what the deal is about this.

Yeah. And so if you're pointing a friend- And, and to just kinda-... it's like, I gotta figure this out. Yes.

Uh, to make your point about it's not going away, like, it's not a bad thing like, like that one quarterback who keeps coming back to high school even though he's, uh, graduated. Like, it's not going away in that sense. [laughs] Um, I think it's not going away in the sense that people are really being warmed up to how usable it is and how it, it actually shortcuts a lot of things that you didn't think were valuable, and now you're finding that it is actually quite valuable. So I think in that sense it's not going away because it's just really eye-opening how valuable certain aspects of AI are.

All right, we're gonna talk about some of the bigger announcements that happened at AI on the Lot that came out of it. Mm-hmm. First one, opening one, Amazon MGM. It was at Amazon MGM.

They were the host. So, uh, they kicked it off with their big announcement, which was a new Gen AI creators fund, which, uh, undisclosed amount, but basically they're kind of f- funding, piloting three different animation projects, and then also talked about the announcement of their internal pipeline tool that they've been developing that is supposed to kind of put Gen AI in a usable pipeline for creation or development of projects, uh, starting with animation but then also developing or working on a live action short or pilot.

Yeah, tell us about the three projects. Yeah, so the three projects... And I'm not too much in the animation field, so I did not know any of these people, but I know, uh, Jorge. It, it's, is it Jorge or Jorge?

I believe it's Jorge. Jorge? Is it Jorge? Okay.

Yeah. Um, but, uh, Jorge i- uh, uh, w- is a famous animator and has a big following. And so the announcements were Jorge Gutierrez, uh, was doing a short called Punky Duck. Yeah.

Uh, the second one was by, uh, yeah, Albe Hecht at Pocket Watch, creating a short called Love, Diana Mu- Love, Diana Music Hunters, and then the third one was, uh, by Buzzfeed Studios called Cup- Cupcake and Friends. Right. Now, the one that took most of the attention and a lot of heat was Jorge Gutierrez. He got a bunch of online backlash and hatred for partnering and using AI in animation, and then he ultimately dropped out of the program.

Dang. That's crazy. I don't know if this is rumorville or not, but I heard he was receiving death threats. I think he posted...

I mean, not only him, but his family. I think he might have been getting doxxed. Yes. Like his kids.

So, like, I mean, that's just creepy and just, like, you know, just unacceptable. And I mean, for people to get so upset about that, and also just the complete lack still of understanding of, like, what this means. Mm-hmm. And there's just still so many misconceptions of, like, w- what, he's gonna sit at a computer and type out, "Make me an animated film," and then get something?

And it's like, no, it's the, it's, it's using it as the in-between or using it in conjunction with him, his team, his talents, developing the characters, and just making something that would be too expensive to do otherwise most likely or not get funded, uh, and to do itAt the same quality level that he did before, but using tools to speed up that process, and I'm assuming, you know, just do it with a smaller team that can get funded. Anyways, that's the nuance. We know this online mob- [laughs]...

uh, you know, does not like nuance, and just the fact that they just, like, have death threats and all this crazy stuff, it's just- Yeah, I mean, look- Insane... it's an animated movie, guys. It's, it's gonna be about fart and, like, silly things. [laughs] Like, there's no need for that level of, uh, pri- like, escalation.

The other thing I'll say is, um, there, look, he's not the first AI director to be publicly be attached to a big, big budget project. Of course, we talked about Darren Aronofsky, and there, there's a couple of other big Hollywood directors that are tied to AI films. I think what his, uh, now I could be wrong here, but I think what I heard was he was very anti-AI and a staunch opponent of AI previously, and then he- Mm... essentially switched his stance, and I think that is what caused a lot of the backlash.

But nevertheless, like, that doesn't justify any [laughs] of the death threats and, like, uh, threats against his family. That's far too excessive, but I, I, I think there is some, uh, nuance to that, uh, as well. No, and I mean, also, if you're like, okay, he was a, a- an anti-AI person before, and then he does change his view, then wouldn't that bring more curiosity of, okay, what did he see or why did he decide to change? Yeah.

You're allowed to change your mind. [laughs] Like, right? Yeah. I...

[laughs] You're allowed to have a preconceived notion, but then- Yeah... find out more information, then change your opinion. Exactly. Yeah, I th- I thought that was, um, that was quite alarming.

Going back to the Amazon slate, though, it, it feels like they're kind of [laughs] I don't know, they're copying Netflix a little bit. The second project screams K-pop demon hunters, uh, a little bit. Yeah, as I read that, I was like- [laughs]... wait, is this a K-pop demon hunter thing?

But I guess, um, it does make sense that even though the initiative is for both live action and animation, they're starting with animation because, as we all know, animation is gonna be a lot easier, relatively speaking, to get to a final quality than live action is. Yeah, we know it's pretty much there. The tools are pretty much there. Yeah.

Uh, well, at least for, I would say, you know, like a, a step below a Pixar, Disney, DreamWorks level feature. Like, if it's a feature film that's made by, you know, $10 million by a studio in China or a studio in India, I think that's a tier two quality, and that is probably achievable by AI today. But, like the tier one where, you know, it's like Toy Story 5 or whatever- Mm-hmm... like that is still, I think, uh, a couple years out.

And so their internal tool, AI production platform, it's called Project Nara, Nara, and, uh, being made available exclusively to creators. The company describes Project Nara as a collaborative workspace designed for teams that integrates AI production agents with production tools creators already use- Mm-hmm... such as Maya, Blender, Nuke, Unreal, Adobe suite of products. Uh, it is built around a model agnostic architecture.

Nice. Which makes sense 'cause- This reminds me of, uh, Nimble Studio, which was AWS's version of a studio in the cloud. Mm. All right, maybe it's evolution of that.

Maybe, may- yeah, maybe it's some bits and pieces of that with new AI tool set built on top of it. But I can bet money on this that whatever Amazon is thinking is heavily, heavily based on AWS capability, and it's its giant cloud play for them. Oh, yeah. They're a part- They're, they're officially a partner in this too, which I, I mean, obviously makes sense.

Right. Obviously. Yeah. [laughs] Like, you're in the studio [laughs] with one of the biggest cloud platform and tool set.

Yeah. So why would you not leverage that? Wh- which is, uh, actually, Joey, it's also, uh, interesting because a lot of studios, because of ethics concerns and privacy concerns, and as you know, IP is super secretive stuff, they kinda wanna run AI inside of their four closed walls, you know? Mm-hmm.

And, um, like, even though this tool may be built for Amazon, I don't know if this is conducive for the way other studios think and operate. So if they're looking to expand beyond Amazon and just kind of, like, offer this tool set to other studios, it may not be set up correctly for that, just to guess. Yeah, I mean, if they wanna eventually, uh, test Project Nara and then offer it as a service thing on AWS sorta like Bedrock, maybe, but this is such a small market, and that's such a bespoke pipeline- Mm-hmm...

system that, you know, I don't know if it would make sense that that would be a self-serve deployable product. Yeah. But then maybe there'll be elements there that, that, that do. Who knows?

Sure. And I, I, like, I know a lot of other studios are working on getting like Maya and Blender and Unreal and all, all of our favorite tools up on the cloud, but do you really have to? I mean, come on. Like, they work [laughs] on the desktop just fine.

[laughs] I mean, if you, if you're a cloud provider [laughs]- Yes... who sells virtual machines- Yeah. Right... then yes, you would say, [laughs] "Yeah.

Sure, why not?" Yeah. Of course you want it. But yeah, uh, cloud costs can get pretty pricey, so.

Yeah. I mean, we're at a- It gets pricey... like, yes, GPUs are expensive, but on the flip side, workstations, professional workstations are super affordable now. Like, anybody can power a decent Unreal or Maya rig at home, uh, better than they could ever before.

And the other thing too is that this feels a little bit like when Amazon Prime first kicked off where they're just like, we'll just do pilots and then kinda see what works. All of these funds, the gen AI creator funds, the grants are for creators to make proof of concept pilots and shorts. The studio then decides which of those to green-light into full projects. So they're just doing one-off episodes right now.

And then in addition to the animated series, Amazon MGM Studios is working with another creator developing a live action short. Uh, they declined to identify who. Live action short. But we also have seen the, uh, we've seen that pipeline already that they've talked about with, um, Moses, uh, you know, and John Irwin's project that- Mm-hmm.

House of David... is already... No, House of David was the one, but then Moses was the other series with Ben Kingsley that they just promoted that was the hybrid, uh, shot on the volume, gen AI background, but also shot people and used, like, uh, motion transfer for performance capture. So, uh, we've already-Seeing them do this publicly- Yeah...

um, I'm assuming it's gonna be a similar, similar-ish workflow. Yeah, I'd be curious to see the live action short. And it's interesting- Yeah... about the short and, and not a feature length or episodic length.

Um [laughs] they're just, like, investing less into it than they are with animated stuff. I think it's, yeah, like small bets now, see what works, validate the pipeline. Yeah. And then when you're like, "Okay, it works," then it's like, "Okay, go."

Go. "Do it. Go make the full thing." Yeah.

Other big announcement was from Dreamina, which had a big presence there. Uh, Dreamina is ByteDance's, like, public facing platform. Where to UC dance and C dream and, and all that. It's all ByteDance- It's like the Google Flow equivalent of ByteDance.

Exactly. Yeah. Yeah. Exactly.

So they announced Octo, which was sort of another agentic workflow tool that kind of... I think we've been seeing this trend more and more with more tools, where it's a chatbot that sort of lives in the platform, canvas based, and then you start describing what you want, and it starts either figuring out if it needs to make images, videos, if it needs to make character sheets first and then make the video. Right. So yeah, they launched their own version that, uh, runs on the platform and also is tied into, uh, CDance.

Yeah, this is to help with the ideation phase before you actually start to make anything. It's like, how do you hash out a story? How do you fully develop characters? How do you figure out- Well, it's a way to make stuff too, if you're fully making an AI project.

It's, it's... You're make- You c- you know, it's making images, making videos- Yeah... and figuring out the stuff you need to make that. It's powerful because CDance, as you know, already has like, um, multi-shot capability within it from one single generation.

Mm-hmm. And if you tie that with an agentic front end, you can potentially have, like, a very fast velocity output to have entire sequences done in one go. So yeah, that launched. Um, I spoke with...

We talked about this when they announced it, the Luma agents, and we were like, "What is it?" [laughs] Right. Right. "What does this do?"

Exactly. So, uh, I spoke to them a bit and the thing that was interesting about agents was, and it wasn't clear at first, was, um, it is model agnostic. So it is a separate platform, and it is, uh, it seems similar bish- ish to Octo, but same idea where you have a chatbot, you can talk to it, tell it what you need, but then it is supposed to figure out, like, what the best model is for what you're trying to do. Mm-hmm.

And it'll, like, call up and use that model. So I thought it was, like, just entirely working on Luma's platform or U- Luma's different models. You think it's like some elaborate just cloud skill or Claude skill or something? I think at the core a lot of these things are.

Yeah. I mean, it's just a chatbot- Or like a Gemini gen... with a lot of, like, prebaked stuff of, like, how to write based on the model, how to structure the prompt, or how to choose the prompt. Like, I think it's a lot of, like, instructions under the hood that's just calling up different things.

Yeah. Um- It's like a giant context window... but I just, I wasn't aware that... Yeah, I just wasn't aware that Luma's agents also worked with other models.

I thought it was kind of keeping you on their platform. Well, that's smart. Um- That's smart of them to do, right? They, they see the agentic product as something that could sell outside their own ecosystem, right?

If it's good enough. So, uh, you know, it's a smart move. Yeah. Yeah.

So I mean, we've been seeing this. This is kind of coming to every tool, like some sort of agentic- Yes... sidekick thing. So we've got Dream and Octo, we've got Luma agents, we've got Flow agents.

But it's also, like, kind of built in. Like, if you look at Google Omni, like, it has some of this agentic reasoning behavior built in. So, you know, you say something really vague like, "Make me a commercial about a water, water bottle from France," and it'll, it'll make you like a 10 shot, 30 second commercial. And it's going through it, devising what each of the shots are, what the initial frame of those shots should be, and then generating each shot as a video and then editing it all together, then generating sound and...

Like, some of them- Mm... are baked into it and this is sort of separated out. I'm not sure which is better. I, I don't know.

Yeah. I mean, I still think if you're just going directly to the model and giving it a prompt versus this sort of orchestration, which I think if you kind of have been in this for a while and know what you're doing, like you can piece the things together, but if you don't know... But also if you're just trying to do, like, things quicker, it will... Like, I gave that example with Flow where it's like, okay, create like 10 shots of a dude in a field but from different angles.

And so it made... It knew that it needed the consistency, so then it made reference images of the person, reference images of the field first, and then put those two together to make the shots. And so it deconstructed the process that it needed, where if I need, if I just type that into Gemini, it would just give me 10 different images. Mm-hmm.

If that. It might just give me one image of a guy in a field, but it would give me 10 completely different images of a different person, different field. And so these agents help guide that with like all of the elements that you need to do the thing that you're trying to do. Yeah.

The, the proof will be in the pudding. That's more difficult. Like, how useful it actually is, I think will come down to how capable they are. [laughs] It doesn't understand.

Yeah. I have messed with a little bit of Luma agents and some things worked kind of cool, and other things I was like, "Ugh, it's not exactly- Right. It's just like any other, like- [laughs]... what we were trying to do...

you put an LLM up against a real world problem. I think it is really good at being a knowledge base, right? Like, if you want to look up, I don't know, the GDP of Brazil from 2014 versus what it is today, adjust for inflation, da, da, da, da. Like, it's good at doing that thing, but when you ask it to come up with the emotional tone for act two, that's uncharted territory.

Yeah. Yeah. And I think these things are good at, uh, you know, like if you're trying to create a lot of options quickly, batch options. Yeah.

Very good at that. Yes. Can understand that. Um, yeah, but if you're like, "Give me this character arc [laughs] of- Yeah...

of-" I, I think it, it is, it is actually useful- "... in a different location"... so, you know, obviously not a writer, not a developer, but if, if you have a core idea and you want variations of it-Like 10 different variations on, like, the 10 shots, and just see how it, each one of them flow. This is a way to get quantity up, like volume of stuff up real quickly.

But to actually ideate and, like, turn a spark into a fully fleshed out script, I don't know if that will ever be AI, to be honest. It, or should it be AI, right? Or you're just gonna get... I mean, if you do use AI, you're just getting the average of everything, and it's like- Sure...

whatever. Yeah. If it does, if you're trying to churn it out, you're doing the millionth vertical short, then maybe it doesn't matter as much. But yeah, if you're trying to do something, Obsession or Backrooms, [laughs] I would- I have, I have a friend who just started as a creative director at a microdrama startup, and, uh, I think he'll take offense to that 'cause he puts a lot of thought and energy into each microdrama he makes.

[laughs] Like, it's not automated by any means. No, no, and I mean, those things take a lot of gaming design- Yes... also to just structure the stories and keep you, hook you, and then, like, le- give you enough, and then, like, v- get you on the hook enough to then churn out money to find out what happens. Yes.

So- Yeah... yeah, I'm not, yeah, I'm not trying to [laughs] dis- Yeah... the verticals. But if they try, if they start scaling up, 'cause, 'cause there were a, it was a lot of talk of just fully AI generated verticals.

And so if they're like, "Okay, we wanna scale that up to making a bunch of different verticals and different genres," probably gonna have generated scripts in that realm too. Yeah. I, I, the more I look into this territory, this is a really interesting stuff, like Dreamina and Luma Agent and, you know, like even Google Omni- Mm-hmm... to some extent.

The more I look into the pre-generation part of the pipeline, the more I'm convinced that we're not gonna lose our jobs. Like, [laughs] you absolutely need people. [laughs] Yeah, at the core of all of these, you still need people that know- Yeah... like, have taste and know what they're doing- Yes...

to control the stuff. Yep. Anything else with AI on the watch? Yeah, just a quick shout-out to, um, a couple of our fans who I met in person.

It was such a pleasant experience, and of course, I told them the c- most cliche thing. I was like, "Thank you, but like and subscribe." [laughs] Okay. And I, I even dropped, I was like, "Joey would like that too, so do it."

[laughs] Uh, but it was- I have never told someone that in the real world. It was, it was odd. So that's on you. [laughs] Yeah.

And then, uh, met up with Matt Workman, shout out to Matt. Um, finally met him in person. Uh, man, met so many people that I, I have not seen in like five years, sometimes 10 years, and now they're boomeranging back into AI. So, uh, when I left the studio world, uh, about, you know, almost 10 years ago, uh, a lot of them were in, uh, like diverting into what, what I would call, like, consumer technology, like, you know, Instagram and Meta and, uh, TikTok and, like, those companies.

And now they're fully boomeranging back into AI startups within big studios. Uh, so for example, the Amazon one. Mm-hmm. And there's others, right?

So, like, there's all these incubations happening at the same time, and a lot of those people were at AI On The Lot. Uh, yeah, people just coming back. Yeah. Were they out of the industry entirely, or were they just sort of, like, on the fence or?

I think, uh, yeah. In a pause period 'cause there just wasn't a lot happening, but now there's, like, stuff happening again. S- well, this, this predates streaming, right, 10 years ago. But, like, the w- the, the shift away from box office revenue into, um, non, like, streaming revenue or cable revenue and all this other stuff, like, this started to erode away our business a long time ago.

And, um, I think a lot of people back then saw this as a sign to kinda just take their M&E knowledge and take it to other industries. So, like, there's people at Apple who are doing 3D renderings of the AirPods, right? They're from, they're modelers and riggers from animation studios. Now that there's so much energy and investment back into M&E, they're kinda, a couple of them are, like, coming back.

Mm-hmm. So I thought that was really interesting. Yeah. Good.

I mean, I think that was a trend or, you know what, uh, like, talking to people, a kind of m- most of the common trend, probably 80% of the people, it was like no one wants to spend less money. It was more like, we wanna spend the same money, but we wanna get more out of it. Yeah. Yep.

So it was like, yeah, we wanna spend $100 million, but we wanna get 10 films out of that instead of one film, uh, as an example. But, like, that was the general trend. And, like, okay, maybe the crews will be smaller, but there'll be more stuff happening, so there's more, there's still, like, equal-ish amount, amounts of work. That's the optimistic view, and hopefully, and that's...

But I mean, in general, that's what even, like, just kinda studio people were like, "We just want more stuff with the same money, not less stuff, less money." I think, uh, yes, I agree with you. I, I'll take it a step further. I, I don't think it's about saving money, 'cause the studios just want a hit, and they know that spending $100 million is not gonna get them a hit.

So the way to kind of- Oh, it's a big gamble... it's a big gamble. Right. It's a big gamble.

Yeah. And, yeah, it- And that kind of segues into our next segment, but- Yeah, what we'll talk about next... it's, you know, it's like, okay, if $100 million is not gonna guarantee me a return on my investment, then can I do 10 $10 million things, and then one of those- Mm-hmm... will hit to $200 million, and it pays for everything- Mm-hmm...

and it makes me revenue, right? So they're, they're, like, uh, at a blackjack table, and they're doubling down, tripling down, you know? [laughs] That's what it feels like. [laughs] Oh, you like, oh.

Yeah, and the other ones too, uh, yeah, it's a good gambling analogy. You know, that week you were in Vegas, Joey. Yeah, and then the other ones, they also have- [laughs] Yeah. [laughs] Give me the two weeks.

The two weeks. Two weeks in Vegas. [laughs] Two weeks too long. Yeah, and the other ones, uh, lower bar to be, you know, at least just break even, and then if they take off, cool, great, awesome.

Yeah. Then you get a- And, and the other-... another session of backups... I think the far more valuable thing for a studio is not sort, sort of day-to-day profit and loss.

Like, they can sustain the hits. Obviously, we see this with [laughs] Disney and Warner Brothers. Like, they take $100 million loss, no problem. The reason they can do that is because they have the IP library, which is- Mm-hmm...

recurring revenue for them in the form of toys or licensing, what have you, right? Um, so if their chances of hitting gold with new IP, with 10 $10 million shows increases by 10X, they want that.And if AI gives them that, they'll invest in AI. Yeah, completely.

And, yeah, and I think that's, that was the common vibe. There were a couple other vibes that were [laughs] all, all commercials are gonna be generated, and we're not gonna have any production for commercials ever again- I heard that. I heard that... in two years That was, that was the buzz around the, the lot.

Yeah. Um, well, I think a lot of commercials- [laughs]... will be automated, for sure, and then there will be this, um, this snooze fest that'll happen with the public where we're, we're, we're just gonna be inundated with automated content that we're just gonna kinda snooze on that stuff. And what we're gonna seek out are the special handmade stuff.

Like, think of the Super Bowl commercials. Mm-hmm. Like, how much- Mm-hmm... like, I don't even watch football, but I tune in for the Super Bowl commercials, right?

'Cause those are works of art sometimes. Yeah, I think if you want to stand out, then it'll be, like, some bespoke- So our, our, our appetite for handmade content and sort of curated artsy stuff will only go up as we get more and more inundated- Mm-hmm... with automated content. Yeah, it'll stand out from all the noise, 'cause there's just gonna be a lot more noise- 100%...

coming out. Okay, we keep hinting- [laughs]... alluding to this, so let's talk, let's talk, this is usually not our foray, but let's talk about box office this weekend. 'Cause I think there are things to extract from this that also tie into AI and hybrid production and just the future of content and- Absolutely...

media creation. Crazy box office weekend. Crazy. Started last Wednesday when, uh, Obsession on Wednesday, I think it was, beat out that day in the box office, uh, Mandalorian.

Mm. And then it just kept going, and by the end of this weekend, box office totals, uh, Backrooms, which came out, was a $10 million budget. It made $81 million domestic in the US. Obsession, third week out, has increased every single week.

It did $26 million this weekend, and then Mandalorian and Grogu came in number 3, $25 million. Yeah, and the Obsession budget is- 2-... ridiculous. It was $750,000.

Obsession was $750,000. That's crazy. That's just nuts. Yeah.

Yeah. Factor in, look, I'm sure everyone did, I think everyone was paid minimum rates- Right... and, like, favors and stuff, so, like, I always wanna, like, uh, when you hear those super low numbers, I, I always, you don't wanna take them as, like, a model of, like, "We could make everything- Yeah... for 750."

That was, you know, calling in favors and one-offs, but still, very low and is gonna make, at the end of the day, probably $200, $300 million at the box office. It's like the Blair Witch moment from 20 years ago again. Yeah. Yeah, and it's funny- Yeah...

that the horror genre is winning right now, and we all know why. It's because of the current climate. You know, you can't, um... Like, horror has the highest rate of return on a small investment, more so than, uh, comedy movies, which te- Mm...

you know, which have historically declined to the point now where we hardly see a comedy opening anymore. Um, horror has a built-in fan base, and, uh, it just, it just kinda returns on investment in a very predictable way. Um, so if you, unless you're making a $100 million movie, your second-best option is to make- But these are still, like, outlier hits, like big outlier hits, even for the horror genre. I think, yes.

Yeah, you're, you're absolutely right. But in, in general, like, looking back, uh, over the past five years since the pandemic, uh, some of the biggest horror movies, like, you know, there's Talk to Me from those two Australian brothers. Um, I mean, you can even roll Stranger Things into a horror genre, right? Like, these, this genre is just successful since the last five or six years.

It is. I think the takes out of this, I mean, the, the kinda general takes has been like, okay, these two low-ish budget indie horror film or indie-ish horror films have, like, beat out a Star Wars movie. [laughs] The world is really upside down, isn't it? [laughs] As we, like, you know, you talked about Blair Witch.

We have Paranormal Activity. Yeah. Like, it's not unusual. There have been, like, horror- Sure...

hit breakout films. I think it's crazier that, you know, a Star Wars film just on its own has not done so hot, and that's more a sign of, like, people ti- are tired of the franchise, you know, just kinda rehash of stuff that we've had before and are craving something more original- 100%... and unique. Yeah, I mean, putting, uh, Ma- you know, Pedro Pascal and, like, these big names and then Jon Favreau at the helm, like, 10 years ago, that would've been an automatic recipe for tons of money to be made at the box.

Now it's like, "Uh, we'll see about that." I mean, Star Wars used to be, you know, I mean, it was rare- Yeah... and, you know, uh, limited to get it, and I think we're just oversaturated. We just got way too much stuff that it's not, doesn't feel as special anymore.

Yeah, and it's not just Disney, right? Like, I just saw- Same with Marvel... the poster release- Yeah... for Supergirl from DC Studios.

Yeah. And, uh, my first thought was, like, "Do I really wanna go see that?" Like, we just got Superman- Mm-hmm... the new one, what, like, a year or two ago?

It was last summer. Yeah. Yeah, I mean, 'cause they've kind of had this whole DC reboot- Right... to kinda build out this DC universe that, you know, tied into Peacemaker, which the second season also was, like, okay-ish.

Yeah. Not that hot. I, I mean- But, um-... I think Disney should put the Star Wars franchise into, like, the hands of somebody who's, uh, like, a complete, like, a complete opposite of what you think of as a big franchise director, and just let them reboot it from episode one, and then release one every- Yeah, you need to give it to an-...

two years, three years. Like, have- You need to give it to, like, an Alfonso Cuarón or something like- [laughs] Yeah. I'm thinking even younger than that. Like, um, you know, there, there's, there's so many creative filmmakers now that are- Backrooms, Obsession, so it's- These guys, yeah, these guys- [laughs] It's gonna- But maybe they're not maybe mature enough to helm, like, a $100 million movie, you know, with that sort of budget.

But, uh, there, there are a lot of guys in the middle. I'm blanking on some director names. But, uh, yeah, I, I think take it, like, from Dave Filoni [laughs] and Jon Favreau, like, let those guys have a happy retirement and then just, just go to town on somebody new and fresh.Yeah.

I don't know. I mean, we'll see what happens with Star Wars. I think, you know, maybe just give it a break. Well, they have that other movie, that, that Ryan Gosling movie coming out next year.

Um, hopefully that'll be fun. Oh, and, uh- Um, yeah, I mean- The, the Disney execs should be watching the, uh, Star Wars Stories and Star Wars Untold and all the AI YouTube channels, 'cause the reason they're so successful is because they get the lore right from the, from, like, the 60-book series of the Star Wars universe. I was gonna say, I know there are tons of books- Yeah... that people love, too, that we're almost like, "Why don't you just adapt these books?

Like, everyone already loves them." They kinda had... Uh, there were some theories or, or ideas where just like just scrap VII to IX and just say it's another ultimate thing and, like, redo the VII to IX based on the books. Yeah.

And it is not just about maybe taking one book and turning that one book into a movie, but take, like, the, the... Yeah- That timeline... take that timeline, just take bits and pieces that actually correspond back to the lore, and that is what's gonna keep the fans happy. I think all, all of the Disney output over the last few years has all been very predictable except with the exception of Andor.

I, I think Andor is just, like, a standout in the way it doesn't feel anything like the rest of them. Yeah, which reportedly Dave Filoni did not enjoy Andor. [laughs] And, and there was- Maybe-... no virtual production- Uh...

on it. Like, it was all physically shot. Yeah. Yeah, that was what people...

Yeah, that was a comment, too, where it's just like, "Man, I'm more upset about Star Wars 'cause I saw what, how good it could be with Andor-" Yeah... and then it's like- Right... not that. The Star Wars thing, you know, I think that's, like, sure a Disney existential crisis-ish, but, like, it's like, okay, they'll be fine.

Like, maybe just put it on ice for a few years and, like, figure something out and come out again and reboot it. The thing that's been most more interesting is the success- Yeah... of smaller films and the two directors, which I also wanna talk about 'cause it, it, it's been this headline-y thing of like, okay, it's the YouTube generation of, like, directors is here. We went from, like, the Sundance generation in the '90s and 2000s and the- Yeah...

launch of those directors, and then now it's this, like- Love it... YouTube generation. I like it. I think there is, like, some distinction there, though, when we think about this, 'cause YouTube's also so massive and the creator economy's so massive, and what do we mean by that and what could take away from that?

'Cause there were two... There was the sort of, uh, like, online chatter of like, okay, well, now you build out your thing on YouTube, you know, validate the audience, and then, you know, you can make the film or you can get funding to make the thing. And then I think there's this other bucket which is more where the, uh, where these two directors came from, which is making stuff, posting it on YouTube, cutting your teeth there, and then getting signed and doing a deal, which feels a little bit more lightning in a bottle.

But just for, for background, like, so Kane Parsons, who did Backrooms, he did the blender animated Backrooms film that, like, kinda went viral and be- and in 2022, and then kinda had this whole, like, world built out. And then I would say this is lightning in a bottle, 'cause he was, like, 16, and then he got signed to make this movie. He's, like, shooting it. I think he was signed when he was 18.

He makes the movie when he's 19. Crazy. He's 20 now when it comes out. This is just a crazy- Yeah...

like, this feels like one, like, very genius- Boy Genius one-off... yeah... kinda thing. Yeah.

But he made the film. It got attention on YouTube, but there was no The Backrooms channel. There was no The Backroom audience. There was no, like, "I'm gonna keep making content while we're making the film, and I'm gonna take my audience, and that audience is gonna, like, translate to, like, watching the movie."

People are watching this movie 'cause it looks like a cool movie, and they're watching it. It's different than the, like, MrBeast YouTube world where it's like, "I'm MrBeast. I made a channel. I built up an audience, and then I signed a deal with Amazon that is bringing the MrBeast brand- Right...

and making- Right... Amazon content," uh, which feel... That's more in the bucket of, like, build out your channel, validate the content, and then try to get bigger deals with traditional media. Same, even less so with, uh, Curry Bar- uh, Curry Barker who did Obsession.

He did, like, a bunch of sketch videos and kinda just made stuff on YouTube, but there was no, like, Curry Barker YouTube channel. Uh, and now this- Yeah... you know, different than the, the Markiplier where he, like, did the content and then got the funding, made his movie, but then brought his audience to, like, watch the movie- Yeah... and kind of made it a hit...

I don't think this is a, like a- I feel like there's-... one-to-one with how the music industry operates 'cause, like, the music industry is exactly what the MrBeast thing you just said is, which is that- Mm-hmm... um, you know, you build- Right... a, a following online, whether it's a SoundCloud or wherever, you know, and then you just basic- basically sign the record deal, and now you have a built-in audience, and it's very sort of linear.

It's like- Mm-hmm... a square peg in a square hole. The movie executives want to see creative output right away, and, um, this is where, like, pitch vis has been extremely difficult, right? Just to get your project in a state where it's pitchable to the execs who's gonna fund it, and I think YouTube has helped these guys accomplish that.

Regardless of how big their fan base is, just the fact that, uh, an exec can watch a video and then gauge how, how quality it is. I mean, yeah, if you're also starting out, it's like, well, now w- with this overlap of AI, it's like if you can create a sci-fi series, you create the world, you world build, you start m- actually making it as shorts or as a YouTube series, and then it builds an audience and validates, it's like, okay, well, then maybe you can get the funding or pitch it or develop that into an actual- Yeah...

series or movie, and you have this world already built and audience somewhat validated. Right. Yeah. It's these two...

But with the two director guys, it's like I feel like they're more... It feels more like YouTube as the replacement of Sundance- Nice... of a, uh, yeah, Steven Soderbergh, uh- Yeah, those guys-... Tarantino...

came up on the film festival circuit... Rodriguez. Right. Yeah, they had a hit fil- they had a film- Yeah...

they got into Sundance- Robert Rodriguez... it became a Sundance hit- El Mariachi... and that, like, launched their- So on. Yeah, that launched their career.

Yeah. Yeah. And this feels like YouTube has replaced that aspect of film festivals. That, that is so true, and the best part about YouTube is a film festival is only for the 500 or so people that attended.

YouTube's for everybody, so anybody can see it. It's a democracy, right? Yeah. Now, to [laughs] slightly contradict my point, Obsession was purchased at Toronto Film Fest for 14 mil.

So it played at Toronto Film Fest, got acquired by, uh, did A24 acquire it there, I think? And then, then, you know, got its marketing and, and, and really... I'm sorry, not A24. Um- YeahBlumhouse, uh, and then got its, you know- Well, this is crazy...

distribution marketing release and stuff Like, this doesn't make any sense. It's the same thing what Honora, uh, went through. It's like you gotta basically make the movie and then take a gamble on trying to sell it. [laughs] That's crazy to me.

Yeah. Yeah. That's the indie film biz, yeah. It's like [laughs] I mean, like, just for- Welcome to the indie film biz...

for, uh, you know, a young director even coming up with $750,000 in funding is such a big risk, right? Like, that's obviously not his own- Mm-hmm... I don't think that's his own money. No, it got- Yeah...

it had funding from a smaller- Right... production company. But even for them that's a big risk on a, on a- Yeah... he was like 25, 26.

Oh, and the reason I think a lot of films get, uh, bought and sold in, uh, film festivals is because it, there is a attached, um, distribution and, um, sales element to... Like Cannes is famous for having a Marche du Cannes, which is their distribution side- Mm-hmm... of the film festival, so that's where you're buying and selling your projects. Yeah.

I know, I... Yeah, I mean, there's a handful of festivals where it's like, yes, there's still... You get your film in there, it gets in front of buyers, and hopefully there's a, you know... Your, your best case is there's a bidding war and someone buys it, and that's- Yeah...

how your film gets acquired and how your financial backers make their money back. But yeah, it's like if you don't get into, you know, there's probably 10 fests where that's still viable, and then every other fest is, uh, you know, more just like fun and let's do a studio- Yeah... a, a festival circuit. You can get your film acquired there, but none of these directors launched there like they did, like we s- like you would see in the past with- Yes...

a- Yeah, like-... the directors we just mentioned- Yeah... kinda getting their big break by- To get like an official selection at Sundance was such a big deal back in the '90s or early 2000s. You know, it's like, "Oh, wait.

Who is that person? Oh," like. And now we hear about the director after the box office, right? Uh, like the whole thing's shifted to go make the thing.

Yeah. Or, or I mean, the fact that these got theatrical releases is, like, impressive as well. I'm just impressed that Gen Z is got feature film on lock, right? Like, I, I'm just so happy that- They are going to the movies- [laughs] That's great...

more than Millennials. Look, also this other fact that came out, this just came out today, AMC Entertainment saw the highest attendance for May- Amazing... since 2019. Yeah.

I mean, three movies at the same time. You know, regardless of how well, uh, Mandalorian/Grogu did, it still drew people to the theaters, right? Yeah, it did. [laughs] It did.

It did. But, uh, I mean, I don't know if you... Like, I was looking at theater maps and stuff, 'cause I did see Obsession this weekend, and it was harder to get a ticket for that, and then I would check out The Mandalorian seatings and it was like, eh, you know, splotchy, pretty- Yeah... like if I wanted to get a good seat I could.

Obsession I had to see at a 10:30 AM 'cause there were like no seats anywhere else for like any of the other screenings. You saw Obsession? What'd you think? I saw Obsession.

It was good. Def- it's worth the hype. It's fun. Yeah, it's good.

I, uh, I wanna see it so bad. Uh, the, the trailer freaked me out. I was like- Yeah... [laughs] oh God.

[laughs] It's g- it's good. Yeah. Yeah. It's freaky.

[laughs] Yeah. Damn it. So I think, I think... Hey, with the bigger picture, this feels like it validates, A, the theatrical experience, B, smaller movies still got a good shot.

I wonder if these guys used any AI at all in their sort of early concepting. You know, obviously not final pixel or anything- Oh... for Previs. Yeah, just to kinda...

Even just using Nana Banana for some shot, uh, like storyboarding and things like that. I, I would be curious. I mean- My guess is they probably have... probably have now.

I think Previs for these films was two years ago. I mean, things were- Two and a half years ago... pretty usable two years ago. Nana Banana didn't exist, did it?

You could get basic- Well, I mean, what's his name is pretty good at Blender. I mean, I'm sure he- Yeah... built a lot in Blender. Yeah.

Yeah. Like, um- Tim Parsons... all of the success, needless to say, at this budget level is without AI. Now, a couple years from now, what, what would this landscape look like with this sort of young creative energy- Mm-hmm...

um, initiative to f- fund it yourself and then build it yourself, plus having the capability that AI gives you. Like, if you combine those three things, I think that's a trifecta for Hollywood to have energy. Yeah. Indie budget fantasy.

Indie budget, like, genres like Obsession, you know, I mean, you could tell it's low budget-ish 'cause it's in a handful of locations. [laughs] It's really well made, but you're... Most of film's in a c- handful of locations. Yeah.

And it's a, you know, product of being low budget. You know, Backrooms is, I haven't seen it yet, but, uh- Mm-hmm... 10 million, you know? But...

And they built, I know they built a lot of those sets, but still not high crazy fantasy VFX as you know- You don't need a-... traditionally be... you don't need a- Yeah. Yeah.

Yeah. I mean, you, you do- When you make that low budget Star Wars. I think we have appetite for both as, uh, viewers of movies. Like, yeah, we enjoy big VFX heavy movies, right?

And at the same time we also enjoy thought-provoking, very unique takes on familiar ideas. Why is it that i- it's only, like, A24, Neon, Blumhouse, and some of these, like, alt studios that are funding these cool things, and then the big studios are sort of just doing the same thing they've been doing? The big studios used to have their independent arms that, uh, did they either shut down or they just don't do as much? Like, there was Focus Features.

Right. Focus is still around. That was- I think that's part of NBCU- I'm-... if I'm not mistaken...

blanking. Yeah. All right. And then Sony Pictures Classics- I'm trying to think of recent.

I mean-... has, is, is still around, right? Miramax, when it existed, was Disney? Disney.

Yeah. Yeah, yeah. It, uh, they used to have these things and do them and have these kinda smaller arms. I know Warner Brothers did launch one, a new independent arm that's supposed to focus on this.

Mm-hmm. But yeah, I think these were, these smaller studios that were part of arms of the bigger studios, they used to exist to do this kinda stuff and they just don't as much anymore. Yeah. And also just- I...

Maybe this will be a comeback for it. Maybe they'll be like, "Oh, crap. Hey, we gotta start [laughs] we could actually make some good money if we just, you know, start funding some 5, $10 million projects and make more bets." We also need a comeback for the different genres.

Like, uh, like I was telling you, it's just become so horror heavy over the last few years, 'cause that financially those, those have been working. But then, uh, comedies need to come back. Um, zombie movies need to come... I don't know.

I'm just saying, like, there's, there's so many other genres. Yeah. I had fun watching, uh, Naked Gun last year, and it was like- Yeah... it felt fresh 'cause it was just like, "Oh, cool, we just don't really get these types of comedies anymore."

Exactly. Exactly. And, uh, Scary Movie 6 is coming out- Yes... like in a week or two, and I'm excited about that.

Yep. Where it's like [laughs] you know, befo- I don't think I ever saw any of the original ones in theaters. Come on. But now it feels so fre- it feels new and fresh.

I'm just like, g- I wanna [laughs] I definitely wanna go to a, like a theater with an audience to, like, see that. [laughs] You know, one thing in the, uh, the early 2000s that we took for granted was we just thought movies would get better and better, so we didn't really appreciate it as much. Looking back at it, some of the movies from the 2000s, early 2000s are now absolute gold, and I think Scary Movie 1 is one of them. [laughs] Right.

[laughs] But we just thought it was a throwaway movie in the same way that Scream, and like, uh, I Know What You Did Last Summer, and all those things were. Yeah. And now they're, they're bringing them back because they're valuable IP and they were executed a certain way. Uh, yeah, we just took things for granted, man.

I want Scary Movie 6 to succeed, because they said if it succeeds they will most likely green light White Chicks 2. [laughs] Which I [laughs] which I really want. [laughs] Okay. On that note- Uh...

let's wrap it up. [laughs] I was like, can you just- My joy... AI the white faces and stuff? I guess you could, yeah.

[laughs] Links to everything we talked about at donoizepodcast.com. Thank you for your continued love. It was really nice to meet some of you at AI On The Lot.

For those of you- Yeah... who we didn't get to meet, we're here f- in the comment section, so chime in. Thanks, everyone.