Sony Pictures to start using AI to "cut costs", CEO says

Lorenzo Bagnato

5 June 2024 - 13:46

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Sony Pictures is the first Hollywood major to announce use of AI in future productions.

Sony Pictures to start using AI to "cut costs", CEO says

Sony Pictures Entertainment will start using artificial intelligence (AI) to cut costs and improve productivity, CEO Tony Vinciguerra said during his annual investors call. During the call, Vinciguerra also talked about Sony’s approach to streaming and new strategic possibilities for the entertainment giant.

Before talking about AI, Vinciguerra pointed out that the worldwide box office has shrunk significantly compared to the pre-pandemic era. A graph showed during the presentation forecast a return to pre-pandemic attendance levels only in 2027. “Industry-wide box office overall has improved from the pandemic but still has not fully rebounded to pre-pandemic levels,” Vinciguerra said.

For that reason, Sony wants to find ways to utilize generative AI primarily to create content at a lower cost.

Obviously, Vinciguerra added, this matter is extremely sensitive for industry workers, who remain the backbone of the entire entertainment sector. “We had an 8-month strike over AI last year,” Vinciguerra said, adding that current negotiations with the International Alliance of Theatrical Stage Employees (IATSE) also touch upon the matter.

Last year’s writers and actors strikes caused a massive halt in production whose economic effects are now evident. According to Sony’s own graph, the worldwide box office in 2024 will be lower than in 2023, marking the worst performance since the pandemic.

For this reason, Sony does not intend to use AI against industry workers, but instead, as a tool to make production more efficient. “The agreements that came out of last year’s strikes and the agreements that come out of the IATSE and Teamsters [negotiations] will define roughly what we can do with AI,” he said.

The streaming wars and the Paramount bid

Also during the call, Vinciguerra said Sony will keep its strategy of staying out of the streaming wars. Sony is the only Hollywood major to not have opened its own streaming service. Instead, Sony still relies on the traditional theatrical window, then licensing content to third-party streaming platforms.

We’re not gonna get into other businesses. We’re not gonna get into a general entertainment streaming service. We’re not gonna be operating other businesses that are outside of the strategy that we have defined — no matter what you read in the press,” Vinciguerra concluded.

Sony Pictures chief executive avoided the matter of a $26 billion M/A bid for Paramount. After months of negotiations with Paramount Global’s majority stakeholder Shari Redstone, the deal is likely to never see the day of light.

Redstone and Paramount will likely go another way, namely a merger offer by David Ellison’s Skydance Media. Hollywood will likely cherish the news, seeing as it will keep a major player in the market and not reduce the quantity of overall content.

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