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Speaker 1: Bloomberg Audio Studios.
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Speaker 2: Podcasts.
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Speaker 3: Radio. News.
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Speaker 4: Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.
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Speaker 2: Welcome to a special edition of Bloomberg Tech, live from Bloomberg Screen Time in Los Angeles. Coming up this hour, we'll bring you conversations with some of the biggest names in the entertainment industry. And of course, AI is front and center. We'll be speaking with entrepreneurs and leaders across a changing tech and media landscape. I want to get to the big entertainment story today, which is Paramount's $ 110 billion Warner Bros.
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Speaker 5: Deal.
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Speaker 2: It is cleared to move forward. A federal judge has approved a settlement with a dozen states, and the companies now expect the merger to close October 6th.
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Speaker 6: Timely.
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Speaker 2: Bloomberg's Lucas Shaw leads our media and entertainment coverage, leads the Screen Time team, and we're here at Screen Time, but that was a big headline. Let's start with, this is cleared.
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Speaker 3: It's going to close.
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Speaker 7: Yeah, we knew it was going to close as soon as the state AGs and the Writers Guild of America settled their lawsuit saying, you know, we feel like you have agreed to certain conditions that make us satisfied. And David Ellison, the chairman and CEO of Paramount Skydance, who will be the chairman and CEO of the combined company, is wasting no time making changes with staffing and leadership, and I expect we'll just see news pretty much every day over the next couple weeks.
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Speaker 2: There are also sort of details coming out now about what that new company looks like. What does it look like on paper?
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Speaker 6: Well, we know a couple things.
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Speaker 7: One is that Cindy Holland, who's been the head of streaming for Paramount Skydance and who had previously been a top executive at Netflix.
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Speaker 3: has left.
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Speaker 7: And everybody believes that that means that Casey Bloys, who will be speaking at this conference later today, will be in charge of streaming. That is something that we have reported and something that I think others have reported as well.
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Speaker 3: The big news also.
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Speaker 7: Yesterday was that they announced Enon Kreitz, who has been the CEO of Mattel, is joining as the co-CEO of the combined company. A little weird because David Ellison is the CEO, but you can think of Enon as the person who's going to come in and really run things day to day cut a lot of cost restructure like all the nasty stuff that david ellison doesn't want to be kind of stuck with is enon's job.
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Speaker 2: Okay so last night we kicked things off here in in hollywood with a conversation with netflix co-ceo ted sarandos and obviously it's in the past now but the opportunity that netflix had seen with warner brothers discovery you talked about that quite a lot let's just listen to a little bit.
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Speaker 8: Of it.
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Speaker 9: The plan was solid um i think we we and we won the deal at some point, so we priced it right. At our scale, that was the top price point where I thought we could return value to our shareholders with that asset. Any more than that, I thought we'd be taking it into negative territory.
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Speaker 2: I think macro point, now that it is Paramount Skydance and Warner Brothers Discovery, the landscape's shifting a bit. And Ted Sarandos and you talked about how Netflix kind of is going to respond, how they're going to get growth in the future.
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Speaker 6: It's tricky for him because... I think prior.
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Speaker 7: To Netflix going after that deal, they were seen as the biggest entertainment company on the block and just all things were going very well, it seemed for them. And their pursuit of Warner Brothers Discovery, rightly or wrongly, triggered a lot of skepticism because people started to wonder, why are they doing this? Ted talked about it last night. It sort of changed the narrative for the company. And he says he's okay with that. It was a deal that was worth going for, but it.
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Speaker 6: Has hurt them.
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Speaker 7: And their response right now is basically, we don't need to do anything dramatic. We were in a good position before that, and that has not satisfied investors.
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Speaker 2: It's a huge agenda today here in Hollywood. Preview some of it. And the big question is, this industry is genuinely debating while we're all gathered.
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Speaker 7: Well, look, the Paramount Warner Brothers deal, even though we know it's going to happen, is still top of mind for everyone because they're wondering what it's going to look like. So we have Casey Bloys, as I mentioned. We also have Jerry Cardinale, who is David Ellison's deal guy, one of the largest shareholders in Paramount Skydance. I'm excited for both of those conversations. We have Dana Walden, who's the number two at the Walt Disney Company. We have not had Disney at this event before, so I'm excited for that. Obviously, a company of great interest. AI is a topic, as you mentioned, at the top of the show that's big. I think you're going to have Mikey Schulman, the.
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Speaker 6: CEO of Suno, on the show.
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Speaker 7: I'll be interviewing him with our colleague Ashley Carmen this afternoon.
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Speaker 4: So that should be fun.
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Speaker 2: Bloomberg's Lucas Shaw, leader of our Screen Time team and this annual event. Thank you very much, dude. I just want to stay with Netflix. Ted Sarandos says the streaming giant needs to move faster. And when Lucas sat down with the Netflix co-CEO to talk about engagement, the push into live programming and the company's strategy for growth, he was pretty strong. Listen to this.
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Speaker 9: We are growing engagement. So we're growing on 200 billion hours of watching. We grew 2%. in our last announcement.
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Speaker 7: But 2% is not what people are hoping for out of you, right? They're used to double-digit growth, at least certainly in revenue, and to some extent even in viewership, they'd expect more.
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Speaker 9: This is my point about the growth in general. Yes, overall, we're not growing as fast as I want us to, and we're working on making that move faster. We are, though, also doing things that create a lot of headwind to that number, meaning when we do live programming on Netflix, which is a relatively new thing, we spend about 5% of our content budget on live events. They generate about 1% of our watching. But they do a very different job.
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Speaker 6: They generate a lot of sign-ups. They're really effective for advertising.
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Speaker 9: Sign-up, retention, advertising, all those things that they do. But it creates engagement headwind in how you invest against it. And remember, when I say we grew 2%, it's an easy number to sneeze at. But it's through all the growth of Live. It's through incredible headwinds from things like the World Cup and World Sports and all those things that are going on, too. So we are growing the business. We want to keep growing it faster. This past quarter, we did double-digit revenue growth in every.
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Speaker 3: Region of the world.
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Speaker 9: So the business is great and growing fine. I mean, if you asked me if we were growing at 20%, I'd be telling you I wish we were growing faster.
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Speaker 8: Right.
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Speaker 7: But when you said you wish you were growing faster and we're working on it, what are the things that you are working on to kind of reaccelerate that growth?
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Speaker 9: Well, some of the things are in the expansion of what we do. So Live was an expansion of what we did that didn't necessarily bring more gross engagement, but it brings very valuable engagement. So it's not... a mystery that all engagement is not equal because you probably are not surprised to know that an hour of Judge Judy in the middle of the day does not generate as much revenue as an hour of NFL football.
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Speaker 7: Or I saw some CPM chart recently that showed what you make per view versus what YouTube makes per view.
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Speaker 3: And yours is higher.
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Speaker 9: Yeah, we monetize better. Our programming monetizes better. Now, we're looking constantly at how do we do things to bring more value to the members, more things to watch, more ways to watch all those things. So that is some of these things that are, and I don't want to over-characterize things like podcasts and those things because they're very small investment and very small addition to what we're doing. The vast majority of what we spend on is professionally made movies and television series and games.
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Speaker 4: Would you ever buy one of the big studios, take two?
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Speaker 3: Microsoft seems to be.
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Speaker 6: Unhappy with that.
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Speaker 9: Well, as you know, we're not, we have not been traditionally big buyers. The Warner Brothers notwithstanding. that we've not really been builders from scratch. So I do think we've looked at, we have built some, worked with some of the smaller studios and programmers and developers, and there's a likeliness of those things come. The big problem with when you do these deals, and the reason why I go back, why the Warner Brothers was attractive, even though I said we were not going to do that, is it's very rare that this kind of asset was so clean. You're just buying just the things we wanted to buy. And so we were able to very easily look at this and say, how will this add value to Netflix and not destroy value in other ways? How do you take this growth engine and have it supercharge our growth engine? And for us, the ability to do that made that deal super unique. We're not looking for the next opportunity to backfill that deal because our plans and how we're going to grow is primarily organic, and we'll look for opportunities that complement the business as we go. That's for games, too.
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Speaker 2: That was Netflix co-CEO Ted Sarandos speaking with Lucas Shaw. That's how we kicked off Bloomberg Screen Time 2026. Coming up on this show, we're going to discuss how AI is changing the way music gets made with Suno CEO Mikey Shulman. That's next. This is Bloomberg Tech. We go live to SpaceX, Space Launch Complex 40, Cape Canaveral, Florida, Crew Dragon 13. You have four astronauts, two Americans, one Canadian, one Russian cosmonaut. in the next 30 seconds heading to the International Space Station. SpaceX in coordination with NASA. As it stands, everything nominal. This mission looks like it's a go. Let's listen in to the countdown from Cape Canaveral, Florida. T-minus 10, 9, 8, 7, 6, 5, 4, 3, 2, 1, ignition.
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Speaker 5: And liftoff.
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Speaker 6: Go Falcon, go Dragon, and go Crew-13.
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Speaker 10: Liftoff of Crew-13 carried by Dragon Brace to the International Space Station.
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Speaker 7: All nine Merlin engines on the first stage at maximum thrust of 1.7 million pounds.
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Speaker 2: We heard a good call.
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Speaker 6: The propulsion is nominal or as expected.
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Speaker 11: The spacecraft will also begin to pitch downrange, meaning it's turning slightly horizontally from what you saw.
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Speaker 6: At liftoff to help build speed.
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Speaker 12: E plus 40 seconds. T-plus 40 seconds into Crew 13's mission on board.
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Speaker 2: Stage one throttle down.
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Speaker 12: Of Dragon and Falcon 9. And we did hear that call out for stage one throttle down. That is in preparation for Max Q coming up here in.
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Speaker 1: A few seconds.
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Speaker 2: Okay, there are four astronauts heading on Falcon 9 inside a Dragon capsule towards the International Space Station, just hitting the moment of Max Q, where the air is most dense as the craft passes through Earth's atmosphere. The maximum moment of aerodynamic pressure.
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Speaker 8: Those.
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Speaker 2: astronauts feeling three to four g's on the way up this has kind of become routine um but it's an important mission for spacex nonetheless with the future of the falcon as the launch system program under question dragon as well i want to bring in bloomberg space correspondent lauren grush um you know you and i talk about this all the time right lauren this is kind of somewhat routine but give us the context and why this this mission to service iss is important Right.
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Speaker 11: Well, as you see, it's the 13th mission that SpaceX has done. So we really are getting into the rhythm of things. But it does come at an interesting time, which you said, which is that the future of the Crew Dragon that the crew is flying in is kind of in question at the moment. There's a lot of speculation that SpaceX is going to retire the Crew Dragon as soon as the ISS program ends. We don't have a clear answer on that. But this could be one of the few remaining Crew Dragon missions that we actually see them do for NASA. They have four more scheduled for crew rotation missions going forward.
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Speaker 2: So we should.
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Speaker 11: Definitely keep an eye on those. But yeah, it's an interesting time for these launches to occur.
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Speaker 2: Okay, we're waiting for Miko main engine cutoff where the first stage engine shuts down. Then we should get stage separations, a pretty nice visual that we get any moment now. Three first-time flyers, Lauren, on this mission, and there you have it, that stage separation I was talking about a second ago. Just give us a bit more of the mission overview and the reality of what it takes for Dragon to get to the ISS.
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Speaker 1: Yeah, absolutely.
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Speaker 11: So these are pretty routine missions, if you can call them routine. You know, space flight is never routine. But in order to keep the.
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Speaker 1: ISS fully staffed.
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Speaker 11: They send crews every six months to the International Space Station. So this crew is heading to the ISS. They'll stay there for roughly a week and greet the crew that's already on board.
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Speaker 2: And then the.
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Speaker 11: Previous crew, Crew 12, another four-person crew, is slated to come home once they do that handover mission. And so it's a pretty periodic schedule that SpaceX has helped NASA maintain, you know, regular schedule. crew, um, appointments to the ISS. So it's, it's, um, you know, like I said, hate to call it standard, but it is a standard mission.
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Speaker 2: For NASA and SpaceX. Okay, Bloomers, Lauren Grush, thank you very much. You can keep watching the full launch on the terminal at Live Go. Let's go from space back down to earth here in Hollywood and back to entertainment. And look at the collision of AI and creativity, specifically in music. Suno has brought AI-generated music to more than 100 million users. and is now partnering with some of the industry's biggest players. Joining us is Suno co-founder and CEO, Mikey Shulman. I think a really good place to start is, for those that just aren't familiar with Suno, what it is and what you can actually do with it.
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Speaker 3: Yeah, great to be here.
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Speaker 13: For the uninitiated, Suno is a way for everybody to enjoy making music, whether you're a Grammy-winning producer tweaking something, getting that last little bit out of it, or a grandmother just making music for fun. And the thing about music is... Everybody is creative, but not only is everybody creative, everybody enjoys being creative.
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Speaker 2: You're talking about humans being creative.
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Speaker 13: Yes, everybody is creative. And so forget the tooling that you use. When you spend 30 minutes making music or making anything, you just feel so much better than the way we're entertained today of just consuming stuff. And we think in the future, everybody will be entertained creatively.
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Speaker 2: That 100 million number is a big number. Kind of surprised me a little bit. Who are those people? What types of people? What are the demographics? What are the profiles of people that are engaging with the technology?
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Speaker 3: It's so interesting. It is so varied.
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Speaker 13: It's like I said, we know tons and tons of industry professionals using this in their day-to-day workflows, falling in love with new ways of making music professionally.
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Speaker 3: But it is the whole world.
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Speaker 13: It's every gender, every race, every country. We work in every language. Music is so universal. So it's not surprising to us that we see this.
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Speaker 3: All over the world.
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Speaker 2: This is... I think the third edition of Bloomberg Screen Time. And over those three years, we've been talking about the use of AI in generating music, but content generally. The music industry, I would say, was initially pretty hostile to the technology, what it would mean for them, for their content, their IP.
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Speaker 6: Where are we at now?
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Speaker 13: I think we found ourselves in a really interesting, complex time. The entire industry of music is moving very quickly, and actually the entire industry of AI is moving extremely quickly. And so things are shifting in a very complex way.
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Speaker 4: That said.
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Speaker 13: It's a really exciting time because as the technologies progress, we are able to do so much more with our industry partners.
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Speaker 3: We're able to push things forward a lot more.
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Speaker 13: I think slowly we see people actually excited to speak a little bit about how they use these tools, about how... It is helping them amplify their creativity about how there's actually a human behind everything. And so I'm really, really excited for the next year.
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Speaker 2: Let's talk about where Suna has got commercially. You have partnerships with Warner, BMG, for example. What is it that you actually do with or for them? What's the output for Suno?
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Speaker 3: It's a great question.
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Speaker 13: I think that we think of these partnerships as really long-term, and it's because where we are today is a particular moment in time, but what the future of music can be is actually still unknown. And the thing we're most excited about these partnerships is building products that could never have been built before without bringing the best technology and the biggest.
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Speaker 3: Music companies together.
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Speaker 2: When you say building products, you mean building tracks? What is it that they pay you for?
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Speaker 3: So imagine you can take.
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Speaker 13: the music of one of your favorite artists and start to play with it and remix it or cover it or mash it up with something else or otherwise change it in a way that has you feeling like you are co-creating with your favorite artist.
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Speaker 3: This is an entirely new product.
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Speaker 13: Digital music today has become very, very passive and to pull people in, get them to engage in new ways, this is how we actually grow The music business.
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Speaker 2: Mikey, let's go to the underlying technology, the core competence that you and the team at Sonar have. Is it in AI? Are you model builders, a model lab, or do you harness? Harness is a very specific term. Do you make use of other people's technology?
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Speaker 13: We build all of our technology in-house. When we started this company, there was nothing. in this space, and so we really had to be the tip of the spear. That said, I really think of us as a music company, as a product company. We are building technology, not just for the sake of building technology, but actually for the sake of delighting our users.
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Speaker 3: And you cover a lot of AI stuff. There's so much focus.
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Speaker 13: On on utility, on the enterprise, and there's not enough focus on what I think is a fundamental part of being a human, which is fulfillment, creativity, fun, entertainment. And I think this is to everybody's detriment to just think about everything through the technological lens and not enough through the human lens.
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Speaker 2: How important is it? So, you know, we're talking about the medium of audio, but how do you sort of make it clear to the world this is a piece of AI-generated audio content?
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Speaker 8: Yeah.
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Speaker 2: And this is not. Do you need to? Is it incumbent on you to say, make that distinction?
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Speaker 3: This is a really interesting issue. Just my opinion.
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Speaker 13: I think when we think about what is AI music, what does that really mean? This is such a broad spectrum of things, whether it's somebody typed a few words into a text box or a professional using it just in bits and pieces at that final step. And in my opinion, we don't want any single party, whether it's an AI platform or a media platform, a set of rights holders.
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Speaker 3: We actually want to make these decisions together.
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Speaker 13: And to add more complexity to this, actually, this is kind of a shifting landscape as the technology itself changes, as the way in which we use AI in music production changes. And so it's actually good that we don't have firm rules of the road just yet.
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Speaker 2: Let's use the case study of a vocal artist. It could be anyone, right? There are those that have concerns, right? But there are also people that see opportunity. They could license their voice. Essentially, they could make it available. They could open source it, I suppose. What do you see in that space? You know, that is basically the idea of making a piece of content attractive because a known entity's name is against it, even if it was AI generated.
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Speaker 3: There is so much opportunity here.
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Speaker 13: So everything you said about can you license somebody's voice or likeness, there's so much opportunity to build.
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Speaker 3: New things around all of this.
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Speaker 13: And so that's the stuff that we're really excited about working with our partners to build. The amazing thing is, again, there is finally the ability to build differentiated products in a world of music that has had a little bit of stagnation actually today.
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Speaker 2: You go to the entrance to Bloomberg Screen Time, it says where entertainment meets capital. So let's talk a little bit about money. How are you building the business? And what are your kind of capital needs? Are you kind of in in growth mode or is is there is now some top line traction that you've been able.
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Speaker 13: To get There's been a fair amount of traction, and you said 100 million users have used it. The last stats that we released were 2 million subscribers.
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Speaker 3: $ 300 million in revenue.
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Speaker 13: We are far beyond that by now, and so there is.
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Speaker 3: Quite a lot of traction.
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Speaker 2: Far beyond those two numbers.
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Speaker 3: Yes, we are.
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Speaker 13: And I think, just thinking about investors, we have amazing investors and partners for building this business, but a lot of people think of music as a small business and one that they don't necessarily want to get into, and I think We've shown the world, actually, that music is a big business. Music is a really big part of people's lives, and there's immense potential for growth.
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Speaker 2: How do you manage usage, right? Because you must have compute costs. and then there's what you charge. How do you balance that?
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Speaker 3: Yeah, we're kind of in the middle here.
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Speaker 13: You know, we're not in the regime of, let's say, streaming, where the marginal cost of serving our stuff is so small. But we're also not in the business of general intelligence, where we just need to throw as much compute as possible at our problems, and they'll all get solved.
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Speaker 3: Music is art. Music doesn't have right answers.
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Speaker 13: Music is not something that you can just scale, and you'll get to where you want to go. And so we kind of sit in this in-between, and I think we're doing okay from that perspective.
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Speaker 2: Suno CEO, Mikey Shulman, it's been great to have you here with us on Bloomberg Tech. Thank you very much indeed. Let's get to some news in the world of AI. OpenAI is accusing Chinese rival Moonshot AI of trying to extract proprietary data from its models. The company says users tied to Moonshot made thousands of attempts to uncover how its models reason through problems. Bloomberg Senior Tech Editor Mike Shepard joins us now. This was a big story yesterday that came just after the show. Explain the accusation.
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Speaker 8: Well, the claims are that Moonshot had been working with or had actors that were associated with the company seeking to extract data en masse from OpenAI in a way that would evade OpenAI's attempts to hide some of the reasoning of its models. Companies like OpenAI and Anthropic have been trying to put up defenses against this practice of distillation where data is is extracted en masse and used to build new chatbots. And normally in the AI industry, this practice is acceptable. But when it's carried out on an industrial scale, that's where these companies get concerned. And we've heard anthropic and open AI level accusations against their Chinese competitors of unfair play in using distillation. And in fact, the Trump administration has even warned of sanctions on the practice against companies that have been carrying it out. And we've also seen Anthropic issue its own set of claims against Alibaba and also Moonshot for similar versions of this ad. So it highlights how both the attempts of the companies to try to put up defenses are being evaded and that the practice is still under is still being continued.
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Speaker 2: Shep, there's another major story out there that we'd be grateful for some reporting on, how the world and America feels about guardrails, some whole data. Tell me about it.
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Speaker 8: Well, yesterday, and this was a day after President Donald Trump held that high-profile lunch with Silicon Valley leaders, Quinnipiac University in Connecticut released findings that showed 91% of Americans favor putting some guardrails on artificial intelligence. and 81% support safety over innovation when it comes to actually pursuing AI development. Now, that really stands in contrast with what we heard from the president on Tuesday, The industry should police itself that in this agreement that they unveiled a few hours after this lunch at the White House, that the industry would take care of running its own tests on its models, but that the government would take and continue to take this hands-off approach. And what was interesting also in these findings, Zeb, was how people view the technology industry itself. 74% of those surveyed said that they don't trust AI leaders. And that also reflects a broader distrust of the technology itself, Ed. We saw in the survey findings that 53% of Americans said that they see AI causing more harm.
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Speaker 3: Than good in their daily lives.
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Speaker 8: Now, AI leaders, including Sam Altman, whom you spoke about this very issue with during your interview with him a few weeks back, they see it as a messaging problem and a branding problem. President Donald Trump has tried to address it, of course, by renaming it superintelligence. And yet we're seeing in these results that the American public has deep misgivings about the technology, its impact, and its safety.
00:24:35
Speaker 2: Bloomberg's Mike Sheppard out of D.C. Thank you very much indeed. Okay, back to Hollywood and coming up, we're going to be joined by George Stompoulos from Promise to talk about the need to redefine what a studio looks like in the AI age. Let's also talk a little bit about what's happening above our heads. Dragon now in orbit, traveling 17,500 miles an hour. Next, the nose cone opens. It exposes the systems that Dragon needs to rendezvous and dock with the ISS. From there, spacecraft performs a series of carefully timed burns, catches up with ISS. That journey is going to take that crew of four, three first-time flyers aboard Falcon 9 Dragon to the International Space Station before Dragon essentially lines itself up and autonomously docks with the International Space Station. It's a long-duration mission in orbit for that four-person crew. But as they say, everything nominal so far. Welcome back to a special edition of Bloomberg Tech. We're live from Bloomberg Screen Time in Los Angeles. AI is moving deeper into Hollywood, not just as a tool, but as the foundation for an entirely new kind of studio. Promise is an AI native studio, betting that the tech can fundamentally reshape how entertainment gets made. And its CEO and co-founder, George Trompoulos, joins us now. What is an AI native studio, George? Let's start with the basics.
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Speaker 6: Great question, Ed.
00:26:08
Speaker 10: So, you know, the advent of generative AI has enabled creators to have 10X superpowers. And we sought out to build a company around these new types of creators. They are leveraging all the best models to produce original films and series at a fraction of the traditional cost and timeline.
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Speaker 2: You know, I think back just even maybe last year, but three years ago, discussing the basic premise of And for lots of people, the dream was the prompt results in a feature film coming out the other side. Is that a reality now? We're talking about something very specific.
00:26:43
Speaker 6: You know, this is an artist-led process.
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Speaker 10: You know, of course, when you open up an AI model, you can prompt something and get a result.
00:26:51
Speaker 6: Models are good for shots.
00:26:53
Speaker 10: Studios are good for producing films and series.
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Speaker 6: And it's a collaborative process.
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Speaker 10: It brings together artistry from character designers to environmental designers to visual effects artists and of course great storytellers. So a lot of the roles you would see in traditional filmmaking process are still there. But what's possible now is for smaller teams to do high impact work.
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Speaker 2: I guess another way of pushing you on it, George, is to ask what is it that you do differently to a traditional Hollywood studio? How is the setup different?
00:27:21
Speaker 6: You know, if you look back at the.
00:27:22
Speaker 10: History of entertainment, there have been these technological shifts that have changed how the business works. We think there's no doubt that the advent of generative AI will be another one of them. So we are really rethinking the business from first principles, from how ideas are shaped, developed and tested all the way through to production, post-production and even how they're brought to audiences.
00:27:42
Speaker 2: But is it like, you know, somebody has a script. That's how this town works, right? Somebody has a script. They come to you and they say, here you go.
00:27:51
Speaker 10: You know, we do collaborate with incredible writers in Hollywood, as well as storytellers who haven't had their moment yet. And one thing that we do that's quite different, Ed, is we make the last thing first.
00:28:06
Speaker 6: Here's what I mean by that.
00:28:07
Speaker 10: Typically, if you're making a film, one of the last things you do is produce the trailer.
00:28:12
Speaker 6: In our world, once we have the story, the.
00:28:14
Speaker 10: Script, the idea developed, we actually go straight to a trailer or a proof of concept. So we can see the story leap off the page. You can get a sense of how it's going to look, feel, and sound.
00:28:23
Speaker 2: Let's take that trailer. Let's say it's three minutes long, 90 seconds. How much of that product is AI generated? How much of it is not? That's the bit that I think people are trying to understand.
00:28:36
Speaker 10: In our case, we leverage generative media for a large portion of the process. It sort of depends on what type of project you're talking about. At Promise, we're focused on animation. We're also focused on what's called hybrid. Hybrid is human performance in synthetic environments. And what that does is it serves to bring down the cost of visual effects and allowing smaller films to have great scope and scale.
00:28:59
Speaker 2: Okay, that's where I wanted to go. So you talked about, you know, when there is a technological shift, it changes an industry. Let's get to the economic change. Is this the case that the production process of a feature film or a television series is lowered through how you set yourselves up through the technology?
00:29:20
Speaker 10: Yeah, this is actually about a reduction in cost and timeline. In the animated side, we're seeing cost reductions in the 50% plus range.
00:29:28
Speaker 6: For certain productions.
00:29:29
Speaker 10: Now that's not to say every animated project needs to follow this methodology, but in our case we see that as an opportunity to bring new stories to life that weren't possible before.
00:29:39
Speaker 2: That's a saving for the industry. How does that manifest as business for you? What makes working with you, George, attractive?
00:29:46
Speaker 10: We think that it creates a new opportunity to shift the paradigm.
00:29:51
Speaker 6: If we were setting.
00:29:53
Speaker 10: Out to produce an animated feature in the past, that would cost hundreds of millions of dollars and take years and years and years. Now, with the reduced cost, we can produce that ourselves. We can own that and we can seek the distribution that we need for such projects. So many stories that weren't told before are now going.
00:30:09
Speaker 6: To be unlocked.
00:30:10
Speaker 2: I'm super interested in the backstory, backing from Andreessen Horowitz, Google's AI Futures Fund, kind of incubated by Disney. You're growing a startup? Is that fair?
00:30:23
Speaker 10: Yeah, this is absolutely a startup. We're a two-year-old company. We've been deep in R & D, building the structure of what we think a studio should look like in the modern era. We've been fortunate to bring on great partners that you've mentioned. We participated in the Disney Accelerator, which is how they engage with new innovative companies. They've been a tremendous partner. Really excited about collaborating with them. And, you know, we're now entering into the production phase. So we're in production this week on a hybrid. horror series which is uh has the scope and scale of a massive budget uh series but is actually done again at a fraction of the cost and timeline with an incredible crew of artists as well as ai artists that help bring the story to life.
00:31:05
Speaker 2: George Trompolo, CEO, founder of Promise. It's been great to have you here on the show.
00:31:09
Speaker 8: Thank you.
00:31:10
Speaker 2: Thank you very much indeed. Coming up, could AI actually help bring production back to Los Angeles? We'll discuss with Caroline Ingborn from Luma AI. I actually came up last night with Netflix's Ted Sarandos as well. As networks tighten their budgets, Conan O'Brien told Bloomberg's Ashley Carman that while this is a real problem for comedians, both good and bad can come out of it.
00:31:32
Speaker 3: Just like AI.
00:31:34
Speaker 2: This is Bloomberg Tech.
00:31:36
Speaker 3: Things are changing.
00:31:37
Speaker 14: The way I see it is that it's like the discussions about AI. There will be amazing benefits, and then there will be some horrible unintended consequences, and that is the case with anything that's new.
00:31:52
Speaker 3: Anything.
00:32:04
Speaker 15: When I worry about AI... I worry about my kids in school. I worry about the 30% rise in the number of A's given out at colleges over the last three years.
00:32:15
Speaker 4: I worry about learned helplessness.
00:32:17
Speaker 15: I worry about responsible use. I don't worry about Skynet, and I don't think that it's going to take over this business in any meaningful way. I think it's going to be additive.
00:32:33
Speaker 2: That was actor and producer Ben Affleck, who thinks AI will actually be an added benefit to the filmmaking industry. In the same vein, AI startup Luma AI says the technology could actually help bring production back to Los Angeles by lowering costs and making ambitious projects faster and easier to produce without sacrificing creative control. Luma AI COO Caroline Ingerborn joins us now. You and I were listening to Mr. Affleck together last night. His view on AI's role in the filmmaking process or the creative process. Obviously, Luma believes AI has a role. Just explain what Luma does and how you make a role in Hollywood.
00:33:17
Speaker 5: So Luma started out as a frontier research lab.
00:33:20
Speaker 12: That's right.
00:33:21
Speaker 1: What we are today is a full stack company.
00:33:23
Speaker 5: So what that means is that we do research on multimodal AI models.
00:33:32
Speaker 1: But then where our product.
00:33:34
Speaker 5: Is and how we go to market is focused on AI for creative work.
00:33:40
Speaker 1: And so if you.
00:33:41
Speaker 5: Look at this of how the industry has evolved, it is first like you need these models to be able to do anything, right? But if you only use the models, they are very unruly. And you saw this in the early user behavior. So the second layer of this is building products for creative professionals so that they can access the models, but also retain control. And the third layer is having forward-deployed creatives and engineers so that adoption really actually takes place.
00:34:18
Speaker 2: Yeah, we're familiar with the concept of the forward-deployed engineer generally in the field of AI. In my conversation with George Strompolos just a minute ago, I kind of outlined what the original vision was, but the prompt and the output is a full feature length film. That's not the reality, right?
00:34:36
Speaker 5: No, that is not the reality. And I would say that's not the goal.
00:34:42
Speaker 2: What is the goal?
00:34:42
Speaker 1: The goal is.
00:34:43
Speaker 5: Not to have a prompt input. This is a tool at the end of the day. And what I'm seeing that is so exciting is when.
00:34:54
Speaker 1: Can I take this out?
00:34:55
Speaker 3: Please pull it out.
00:34:55
Speaker 2: Don't worry about it.
00:34:56
Speaker 1: Thank you.
00:34:58
Speaker 5: What I'm seeing that is so exciting is this is a tool as all other tools that we have seen. And Hollywood is like built on technology shifts.
00:35:08
Speaker 1: This is a new technology shift.
00:35:11
Speaker 5: So far, I haven't seen any technology shift having as a goal to.
00:35:14
Speaker 1: It's a collaborative process.
00:35:16
Speaker 2: Well, on that collaboration, so I find the Luma agent interesting because you start as a frontier lab, right? But really what the agent does is direct the project to the best underlying model for that project. And it could come from OpenAI. It could come from another partner.
00:35:31
Speaker 3: Yes.
00:35:32
Speaker 2: Explain why that's important.
00:35:34
Speaker 1: It's very important because.
00:35:36
Speaker 5: In the creative field today, and I would argue in many fields today, there is no model to rule them all.
00:35:43
Speaker 1: There is no model.
00:35:44
Speaker 5: That can make a movie, even though I don't think any video AI company has that as a goal.
00:35:50
Speaker 2: Sweet Lord of the Rings reference, by the way.
00:35:53
Speaker 1: There is no one to rule them all.
00:35:55
Speaker 5: And so what that means is that as the creative professional, as our user, we serve them. And so we want our creative agent is... trained to give you as the creative professional access to the best model for what you are trying to solve for and so sometimes that means like yes you should go to the absolutely latest video model to get the highest quality output but if you're in the ideation phase and you want to generate a lot of content you don't need to pay for that Highest, most prestige. You want to be able to generate a lot and quite fast.
00:36:36
Speaker 2: We're still talking about tokens.
00:36:38
Speaker 1: Yes, we're still talking about tokens.
00:36:40
Speaker 2: Last night, the Netflix co-CEO Ted Sarandos talked about filmmaking in America, content creation in America, and in particular Los Angeles. And he talked about three specific projects, $ 400 million worth of production spend. Luma also has this argument that AI brings... energy, activity back to LA. What is that about? What is your point of view?
00:37:04
Speaker 5: I think there's like two very clear cases here. One is like if you are in LA today and you spend time in the community, It's fantastic. There are so many people that have dived into this new technology, and they're collaborating, they're supporting each other, they're making more content, they're sharing. The internet is filled with people just sharing, like, hey, I found out how to do this, I found out how to control this. It's a very generous, excited, and curious community.
00:37:38
Speaker 2: Generous token spend?
00:37:39
Speaker 8: Yes.
00:37:40
Speaker 5: It's a generous token spend, but ultimately they're also finding a bunch of hacks of how to optimize the token spend and get the most out of your token spend. The other one, which is a very clear example, is our collaboration with John Irvin.
00:37:56
Speaker 1: Yes.
00:37:57
Speaker 8: And.
00:37:58
Speaker 1: So what he has shown.
00:38:00
Speaker 5: With a project called a TV show at Amazon called Moses is that what he was able to do, so he spent years making TV shows abroad because that's how he could get the most out of the investments that he was doing and to tell his story. And that's like the constraint that you see if you're like at the, you know, the biggest director in the world, or if you're a YouTuber starting out, at the end of the day, you want to be able to tell your story. And so capital comes into that storytelling. But what John was able to do with Moses is... In Manhattan Beach, on a stage, hundreds of people working together to make Moses happen. And he was able to do that by hybrid filmmaking.
00:38:48
Speaker 1: So is it AI? Is it not AI?
00:38:51
Speaker 3: No, it's hybrid.
00:38:52
Speaker 5: And so they're real actors. There is a bunch of people using AI to move these actors from the stage in Manhattan Beach into any environment that you want. And this retains the actor's performance.
00:39:08
Speaker 1: It enhances it.
00:39:10
Speaker 5: If you speak to the actors, it's a lot more fun than any green screen has ever been. And the end result is fantastic.
00:39:17
Speaker 2: Luma AI, COO, Caroline Ingeborn, it's been great to catch up. Thank you very much for being with us here on Bloomberg Tech. Okay, coming up, as AI transforms Hollywood, who controls your image, voice, creative work? Familio CEO Dan Neely joins us to discuss protecting creators in the age of... of AI. Take a quick look at shares of Micron. Fourth quarter results after the bell last night. The story is momentum in the memory space with AI. The stock is down. There is like some stock-based comp issues. There are some questions on, is there a cycle for memory as there's traditionally been? And where are we in that cycle as it relates to HBM and AI? But the stock off two percentage points or so on a strong set of numbers. This is Bloomberg Tech. Bye.
00:40:02
Speaker 4: Bye.
00:40:11
Speaker 2: As AI reshapes the entertainment industry, who controls and gets paid for the use of a creator's work and likeness? Vermilio is tackling that question with technology designed to track and license AI-generated content. Joining us is Vermilio co-founder and CEO Dan Neely. And what was so interesting, copyright was the first fight in AI, in this town at least. I'm trying to understand the distinction between copyright and likeness.
00:40:36
Speaker 4: Certainly, yeah. I mean, if you think about copyright, it's a well-understood topic. Likeness is who you are. It's your voice, how you might move. It's your name in and of itself. All those things make up who you are as an individual. And if you are a famous person, that's ultimately who you are. That's how your fans recognize who you are. It's who they relate to. But it's this unique right that has existed for a long time, but AI has really brought it to the forefront.
00:41:00
Speaker 2: Dan, Familia exists for a reason. You're solving for a problem, but how has that problem sort of manifested itself with time? You know, as AI has, more AI-generated content has hit the market and the world.
00:41:13
Speaker 4: When we started this business back in, we started thinking about it back in 2020, there were about 19,000 deepfake creations.
00:41:19
Speaker 14: Pre-ChatGPT.
00:41:19
Speaker 4: Pre-ChatGPT, yeah. So we started thinking about the problem because we'd seen a couple of things happen. But there were about 19,000 deepfake creations back there. Today, there are about a trillion. And so just to give you the kind of context of how much the scale has happened, it's just a gigantic problem. And reality is people are fans of things. And because they're fans of things, they want to create with things, and they also want to engage with things. And so when that fake stuff starts existing, fans go and engage with it. They don't know who created it. They don't know if it's actually from the person they're a fan of. But that likeness right is something that needs to be protected.
00:41:48
Speaker 2: It's so multifaceted and complicated, you know, a deepfake. to all intents and purposes, is often unauthorized use of someone's likeness. And then the question is, to who does the value accrue? How do you solve for that issue?
00:42:06
Speaker 4: Yeah, so it's ultimately two things. First is let's identify all the unauthorized stuff. So our technology identifies across the entire internet.
00:42:12
Speaker 2: It finds it.
00:42:12
Speaker 4: Finds it. Let's make sure we understand what it is. Then our choices are, do we want to take it down or do we want to leave it? So taking it down is there's a bunch of bad stuff that's happening. Leaving it is, oh, my fans might have created something that's actually kind of cool.
00:42:22
Speaker 2: But now it becomes a fight for the lawyers?
00:42:24
Speaker 4: It used to become a fight for the lawyers, but now it's technology, where our technology can just automatically ask for it to be removed. And so we're doing that at scale today. And then it's about monetization. It's about attribution. How much of that is that new output that is a piece of music, is a new video, is just using my name to create an account? How much should I be compensated for that as well?
00:42:43
Speaker 2: Okay, so then there is the motivation or enthusiasm of an individual to license their likeness. You know, what do you see in the world of celebrity, creative, different artists in wanting to do this?
00:42:58
Speaker 4: I think we're in what I would describe as the messy middle.
00:43:01
Speaker 2: The messy middle.
00:43:01
Speaker 4: The messy middle. So it's a gigantic issue. So if we think about permission at scale is AI's issue, right? The entire infrastructure of AI, permission at scale is the problem. Because doing one-on-one deals is really not that complex. But they have to do it at a gigantic scale. They've got to get hundreds of thousands of people to opt into this thing. They can't just think about, hey, it's one-off here, here, there, and somewhere else.
00:43:24
Speaker 2: I get where we're talking about where the value accrues, right? Who pays the artist? You know, is it the AI studio? We've had Luma on. We've had Promise on the show today. Is it the traditional Hollywood studio? Then there's the creator economy, right? Who do they get paid by? What do you see?
00:43:44
Speaker 4: I see two things. I see certainly the platforms are going to start paying because they're going to have content. They already have content on their platforms that uses likeness in an unauthorized manner. So we have to get to a place where that gets company. Think of YouTube, think of Meta's platforms. It exists across every major distribution platform. Spotify, it's in all the places. So let's make sure people are getting compensated in the right way. Then there is, how do we think about you have an authorized model? So let's say all of the people that are building models get likeness to actually be something that they have a right to in the same way they are with copyright. That compensation is going to come from the amount of compute revenue that's been driven for those companies, not just, hey, I've got an interesting piece of content that someone's happened to engage with that I put advertising next to. The compute opportunity is actually the larger opportunity for these businesses and also for individual creators.
00:44:26
Speaker 2: Very quick, how does Vermilio work? make money it takes a royalty or.
00:44:29
Speaker 4: So um we have roughly a hundred thousand customers today they pay us a monthly fee to protect them and then we also take a we have a transaction fee associated with uh when someone.
00:44:38
Speaker 2: Does a licensing and very quickly what happens next yeah.
00:44:42
Speaker 4: What happens next we're in this moment where we have to get to permission at scale it is the issue it is the issue that needs to be unlocked we built this business to solve the permission at scale problem that exists so that we can say okay everyone has a chance to say i'm in or i'm out Once that gets managed, then ultimately that's where we'll end.
00:44:58
Speaker 2: Now, do the people you work with feel positive about AI? Or, you know, you said the messy middle.
00:45:03
Speaker 4: I think that, so for us, our customers are very concerned. Then they get protected. Once they're protected, they're like, oh, now I can start thinking about what else to do. Because the optionality is mine. It's not controlled by platforms. It's controlled by me as an individual.
00:45:14
Speaker 2: Dan Neely of Emilio. Thanks so much for being with us here.
00:45:17
Speaker 4: Thanks so much.
00:45:18
Speaker 2: And on Bloomberg Tech. That does it for this edition of Bloomberg Tech, live from Hollywood, live from Bloomberg Screen Time. But tomorrow, we are actually going to go somewhere pretty unique for our defense tech special, coverage live from Skunk Works, Lockheed Martin's advanced aircraft development facility. in Southern California, you do not want to miss it. It includes a conversation with Lockheed CEO, Jim Ty Clare. So many fascinating conversations here at the intersection of media, entertainment, and capital at Bloomberg Screen Time. Don't forget to check out our podcast. So many of you have been in touch about the way you engage with Bloomberg Tech, how you listen, how you watch, We're really grateful to those that do go to the podcast. You can find it on the Bloomberg Terminals as well as on Spotify, iHeart, and on Apple. The conclusion, kind of interesting there from Dan Neely, the messy middle. Hollywood meets AI, and they're trying to work out how to work together in a way that everyone wins. But there are a lot more conversations to come from here in LA and here in Hollywood. Thanks for being with us. This is Bloomberg Tech.
00:46:29
Speaker 1: Thanks for watching!
Speaker 1: Bloomberg Audio Studios.
00:00:04
Speaker 2: Podcasts.
00:00:05
Speaker 3: Radio. News.
00:00:12
Speaker 4: Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.
00:00:23
Speaker 2: Welcome to a special edition of Bloomberg Tech, live from Bloomberg Screen Time in Los Angeles. Coming up this hour, we'll bring you conversations with some of the biggest names in the entertainment industry. And of course, AI is front and center. We'll be speaking with entrepreneurs and leaders across a changing tech and media landscape. I want to get to the big entertainment story today, which is Paramount's $ 110 billion Warner Bros.
00:00:46
Speaker 5: Deal.
00:00:46
Speaker 2: It is cleared to move forward. A federal judge has approved a settlement with a dozen states, and the companies now expect the merger to close October 6th.
00:00:55
Speaker 6: Timely.
00:00:56
Speaker 2: Bloomberg's Lucas Shaw leads our media and entertainment coverage, leads the Screen Time team, and we're here at Screen Time, but that was a big headline. Let's start with, this is cleared.
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Speaker 3: It's going to close.
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Speaker 7: Yeah, we knew it was going to close as soon as the state AGs and the Writers Guild of America settled their lawsuit saying, you know, we feel like you have agreed to certain conditions that make us satisfied. And David Ellison, the chairman and CEO of Paramount Skydance, who will be the chairman and CEO of the combined company, is wasting no time making changes with staffing and leadership, and I expect we'll just see news pretty much every day over the next couple weeks.
00:01:32
Speaker 2: There are also sort of details coming out now about what that new company looks like. What does it look like on paper?
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Speaker 6: Well, we know a couple things.
00:01:41
Speaker 7: One is that Cindy Holland, who's been the head of streaming for Paramount Skydance and who had previously been a top executive at Netflix.
00:01:47
Speaker 3: has left.
00:01:48
Speaker 7: And everybody believes that that means that Casey Bloys, who will be speaking at this conference later today, will be in charge of streaming. That is something that we have reported and something that I think others have reported as well.
00:01:59
Speaker 3: The big news also.
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Speaker 7: Yesterday was that they announced Enon Kreitz, who has been the CEO of Mattel, is joining as the co-CEO of the combined company. A little weird because David Ellison is the CEO, but you can think of Enon as the person who's going to come in and really run things day to day cut a lot of cost restructure like all the nasty stuff that david ellison doesn't want to be kind of stuck with is enon's job.
00:02:21
Speaker 2: Okay so last night we kicked things off here in in hollywood with a conversation with netflix co-ceo ted sarandos and obviously it's in the past now but the opportunity that netflix had seen with warner brothers discovery you talked about that quite a lot let's just listen to a little bit.
00:02:36
Speaker 8: Of it.
00:02:38
Speaker 9: The plan was solid um i think we we and we won the deal at some point, so we priced it right. At our scale, that was the top price point where I thought we could return value to our shareholders with that asset. Any more than that, I thought we'd be taking it into negative territory.
00:02:59
Speaker 2: I think macro point, now that it is Paramount Skydance and Warner Brothers Discovery, the landscape's shifting a bit. And Ted Sarandos and you talked about how Netflix kind of is going to respond, how they're going to get growth in the future.
00:03:11
Speaker 6: It's tricky for him because... I think prior.
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Speaker 7: To Netflix going after that deal, they were seen as the biggest entertainment company on the block and just all things were going very well, it seemed for them. And their pursuit of Warner Brothers Discovery, rightly or wrongly, triggered a lot of skepticism because people started to wonder, why are they doing this? Ted talked about it last night. It sort of changed the narrative for the company. And he says he's okay with that. It was a deal that was worth going for, but it.
00:03:39
Speaker 6: Has hurt them.
00:03:40
Speaker 7: And their response right now is basically, we don't need to do anything dramatic. We were in a good position before that, and that has not satisfied investors.
00:03:49
Speaker 2: It's a huge agenda today here in Hollywood. Preview some of it. And the big question is, this industry is genuinely debating while we're all gathered.
00:03:58
Speaker 7: Well, look, the Paramount Warner Brothers deal, even though we know it's going to happen, is still top of mind for everyone because they're wondering what it's going to look like. So we have Casey Bloys, as I mentioned. We also have Jerry Cardinale, who is David Ellison's deal guy, one of the largest shareholders in Paramount Skydance. I'm excited for both of those conversations. We have Dana Walden, who's the number two at the Walt Disney Company. We have not had Disney at this event before, so I'm excited for that. Obviously, a company of great interest. AI is a topic, as you mentioned, at the top of the show that's big. I think you're going to have Mikey Schulman, the.
00:04:25
Speaker 6: CEO of Suno, on the show.
00:04:27
Speaker 7: I'll be interviewing him with our colleague Ashley Carmen this afternoon.
00:04:30
Speaker 4: So that should be fun.
00:04:31
Speaker 2: Bloomberg's Lucas Shaw, leader of our Screen Time team and this annual event. Thank you very much, dude. I just want to stay with Netflix. Ted Sarandos says the streaming giant needs to move faster. And when Lucas sat down with the Netflix co-CEO to talk about engagement, the push into live programming and the company's strategy for growth, he was pretty strong. Listen to this.
00:04:52
Speaker 9: We are growing engagement. So we're growing on 200 billion hours of watching. We grew 2%. in our last announcement.
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Speaker 7: But 2% is not what people are hoping for out of you, right? They're used to double-digit growth, at least certainly in revenue, and to some extent even in viewership, they'd expect more.
00:05:10
Speaker 9: This is my point about the growth in general. Yes, overall, we're not growing as fast as I want us to, and we're working on making that move faster. We are, though, also doing things that create a lot of headwind to that number, meaning when we do live programming on Netflix, which is a relatively new thing, we spend about 5% of our content budget on live events. They generate about 1% of our watching. But they do a very different job.
00:05:38
Speaker 6: They generate a lot of sign-ups. They're really effective for advertising.
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Speaker 9: Sign-up, retention, advertising, all those things that they do. But it creates engagement headwind in how you invest against it. And remember, when I say we grew 2%, it's an easy number to sneeze at. But it's through all the growth of Live. It's through incredible headwinds from things like the World Cup and World Sports and all those things that are going on, too. So we are growing the business. We want to keep growing it faster. This past quarter, we did double-digit revenue growth in every.
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Speaker 3: Region of the world.
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Speaker 9: So the business is great and growing fine. I mean, if you asked me if we were growing at 20%, I'd be telling you I wish we were growing faster.
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Speaker 8: Right.
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Speaker 7: But when you said you wish you were growing faster and we're working on it, what are the things that you are working on to kind of reaccelerate that growth?
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Speaker 9: Well, some of the things are in the expansion of what we do. So Live was an expansion of what we did that didn't necessarily bring more gross engagement, but it brings very valuable engagement. So it's not... a mystery that all engagement is not equal because you probably are not surprised to know that an hour of Judge Judy in the middle of the day does not generate as much revenue as an hour of NFL football.
00:06:46
Speaker 7: Or I saw some CPM chart recently that showed what you make per view versus what YouTube makes per view.
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Speaker 3: And yours is higher.
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Speaker 9: Yeah, we monetize better. Our programming monetizes better. Now, we're looking constantly at how do we do things to bring more value to the members, more things to watch, more ways to watch all those things. So that is some of these things that are, and I don't want to over-characterize things like podcasts and those things because they're very small investment and very small addition to what we're doing. The vast majority of what we spend on is professionally made movies and television series and games.
00:07:22
Speaker 4: Would you ever buy one of the big studios, take two?
00:07:25
Speaker 3: Microsoft seems to be.
00:07:26
Speaker 6: Unhappy with that.
00:07:27
Speaker 9: Well, as you know, we're not, we have not been traditionally big buyers. The Warner Brothers notwithstanding. that we've not really been builders from scratch. So I do think we've looked at, we have built some, worked with some of the smaller studios and programmers and developers, and there's a likeliness of those things come. The big problem with when you do these deals, and the reason why I go back, why the Warner Brothers was attractive, even though I said we were not going to do that, is it's very rare that this kind of asset was so clean. You're just buying just the things we wanted to buy. And so we were able to very easily look at this and say, how will this add value to Netflix and not destroy value in other ways? How do you take this growth engine and have it supercharge our growth engine? And for us, the ability to do that made that deal super unique. We're not looking for the next opportunity to backfill that deal because our plans and how we're going to grow is primarily organic, and we'll look for opportunities that complement the business as we go. That's for games, too.
00:08:33
Speaker 2: That was Netflix co-CEO Ted Sarandos speaking with Lucas Shaw. That's how we kicked off Bloomberg Screen Time 2026. Coming up on this show, we're going to discuss how AI is changing the way music gets made with Suno CEO Mikey Shulman. That's next. This is Bloomberg Tech. We go live to SpaceX, Space Launch Complex 40, Cape Canaveral, Florida, Crew Dragon 13. You have four astronauts, two Americans, one Canadian, one Russian cosmonaut. in the next 30 seconds heading to the International Space Station. SpaceX in coordination with NASA. As it stands, everything nominal. This mission looks like it's a go. Let's listen in to the countdown from Cape Canaveral, Florida. T-minus 10, 9, 8, 7, 6, 5, 4, 3, 2, 1, ignition.
00:09:36
Speaker 5: And liftoff.
00:09:37
Speaker 6: Go Falcon, go Dragon, and go Crew-13.
00:09:42
Speaker 10: Liftoff of Crew-13 carried by Dragon Brace to the International Space Station.
00:09:52
Speaker 7: All nine Merlin engines on the first stage at maximum thrust of 1.7 million pounds.
00:10:01
Speaker 2: We heard a good call.
00:10:02
Speaker 6: The propulsion is nominal or as expected.
00:10:04
Speaker 11: The spacecraft will also begin to pitch downrange, meaning it's turning slightly horizontally from what you saw.
00:10:10
Speaker 6: At liftoff to help build speed.
00:10:15
Speaker 12: E plus 40 seconds. T-plus 40 seconds into Crew 13's mission on board.
00:10:22
Speaker 2: Stage one throttle down.
00:10:23
Speaker 12: Of Dragon and Falcon 9. And we did hear that call out for stage one throttle down. That is in preparation for Max Q coming up here in.
00:10:30
Speaker 1: A few seconds.
00:10:31
Speaker 2: Okay, there are four astronauts heading on Falcon 9 inside a Dragon capsule towards the International Space Station, just hitting the moment of Max Q, where the air is most dense as the craft passes through Earth's atmosphere. The maximum moment of aerodynamic pressure.
00:10:46
Speaker 8: Those.
00:10:47
Speaker 2: astronauts feeling three to four g's on the way up this has kind of become routine um but it's an important mission for spacex nonetheless with the future of the falcon as the launch system program under question dragon as well i want to bring in bloomberg space correspondent lauren grush um you know you and i talk about this all the time right lauren this is kind of somewhat routine but give us the context and why this this mission to service iss is important Right.
00:11:13
Speaker 11: Well, as you see, it's the 13th mission that SpaceX has done. So we really are getting into the rhythm of things. But it does come at an interesting time, which you said, which is that the future of the Crew Dragon that the crew is flying in is kind of in question at the moment. There's a lot of speculation that SpaceX is going to retire the Crew Dragon as soon as the ISS program ends. We don't have a clear answer on that. But this could be one of the few remaining Crew Dragon missions that we actually see them do for NASA. They have four more scheduled for crew rotation missions going forward.
00:11:48
Speaker 2: So we should.
00:11:48
Speaker 11: Definitely keep an eye on those. But yeah, it's an interesting time for these launches to occur.
00:11:56
Speaker 2: Okay, we're waiting for Miko main engine cutoff where the first stage engine shuts down. Then we should get stage separations, a pretty nice visual that we get any moment now. Three first-time flyers, Lauren, on this mission, and there you have it, that stage separation I was talking about a second ago. Just give us a bit more of the mission overview and the reality of what it takes for Dragon to get to the ISS.
00:12:20
Speaker 1: Yeah, absolutely.
00:12:21
Speaker 11: So these are pretty routine missions, if you can call them routine. You know, space flight is never routine. But in order to keep the.
00:12:30
Speaker 1: ISS fully staffed.
00:12:32
Speaker 11: They send crews every six months to the International Space Station. So this crew is heading to the ISS. They'll stay there for roughly a week and greet the crew that's already on board.
00:12:44
Speaker 2: And then the.
00:12:44
Speaker 11: Previous crew, Crew 12, another four-person crew, is slated to come home once they do that handover mission. And so it's a pretty periodic schedule that SpaceX has helped NASA maintain, you know, regular schedule. crew, um, appointments to the ISS. So it's, it's, um, you know, like I said, hate to call it standard, but it is a standard mission.
00:13:08
Speaker 2: For NASA and SpaceX. Okay, Bloomers, Lauren Grush, thank you very much. You can keep watching the full launch on the terminal at Live Go. Let's go from space back down to earth here in Hollywood and back to entertainment. And look at the collision of AI and creativity, specifically in music. Suno has brought AI-generated music to more than 100 million users. and is now partnering with some of the industry's biggest players. Joining us is Suno co-founder and CEO, Mikey Shulman. I think a really good place to start is, for those that just aren't familiar with Suno, what it is and what you can actually do with it.
00:13:43
Speaker 3: Yeah, great to be here.
00:13:45
Speaker 13: For the uninitiated, Suno is a way for everybody to enjoy making music, whether you're a Grammy-winning producer tweaking something, getting that last little bit out of it, or a grandmother just making music for fun. And the thing about music is... Everybody is creative, but not only is everybody creative, everybody enjoys being creative.
00:14:04
Speaker 2: You're talking about humans being creative.
00:14:06
Speaker 13: Yes, everybody is creative. And so forget the tooling that you use. When you spend 30 minutes making music or making anything, you just feel so much better than the way we're entertained today of just consuming stuff. And we think in the future, everybody will be entertained creatively.
00:14:21
Speaker 2: That 100 million number is a big number. Kind of surprised me a little bit. Who are those people? What types of people? What are the demographics? What are the profiles of people that are engaging with the technology?
00:14:32
Speaker 3: It's so interesting. It is so varied.
00:14:35
Speaker 13: It's like I said, we know tons and tons of industry professionals using this in their day-to-day workflows, falling in love with new ways of making music professionally.
00:14:43
Speaker 3: But it is the whole world.
00:14:44
Speaker 13: It's every gender, every race, every country. We work in every language. Music is so universal. So it's not surprising to us that we see this.
00:14:52
Speaker 3: All over the world.
00:14:53
Speaker 2: This is... I think the third edition of Bloomberg Screen Time. And over those three years, we've been talking about the use of AI in generating music, but content generally. The music industry, I would say, was initially pretty hostile to the technology, what it would mean for them, for their content, their IP.
00:15:15
Speaker 6: Where are we at now?
00:15:17
Speaker 13: I think we found ourselves in a really interesting, complex time. The entire industry of music is moving very quickly, and actually the entire industry of AI is moving extremely quickly. And so things are shifting in a very complex way.
00:15:31
Speaker 4: That said.
00:15:32
Speaker 13: It's a really exciting time because as the technologies progress, we are able to do so much more with our industry partners.
00:15:37
Speaker 3: We're able to push things forward a lot more.
00:15:40
Speaker 13: I think slowly we see people actually excited to speak a little bit about how they use these tools, about how... It is helping them amplify their creativity about how there's actually a human behind everything. And so I'm really, really excited for the next year.
00:15:55
Speaker 2: Let's talk about where Suna has got commercially. You have partnerships with Warner, BMG, for example. What is it that you actually do with or for them? What's the output for Suno?
00:16:07
Speaker 3: It's a great question.
00:16:08
Speaker 13: I think that we think of these partnerships as really long-term, and it's because where we are today is a particular moment in time, but what the future of music can be is actually still unknown. And the thing we're most excited about these partnerships is building products that could never have been built before without bringing the best technology and the biggest.
00:16:25
Speaker 3: Music companies together.
00:16:26
Speaker 2: When you say building products, you mean building tracks? What is it that they pay you for?
00:16:30
Speaker 3: So imagine you can take.
00:16:33
Speaker 13: the music of one of your favorite artists and start to play with it and remix it or cover it or mash it up with something else or otherwise change it in a way that has you feeling like you are co-creating with your favorite artist.
00:16:44
Speaker 3: This is an entirely new product.
00:16:47
Speaker 13: Digital music today has become very, very passive and to pull people in, get them to engage in new ways, this is how we actually grow The music business.
00:16:54
Speaker 2: Mikey, let's go to the underlying technology, the core competence that you and the team at Sonar have. Is it in AI? Are you model builders, a model lab, or do you harness? Harness is a very specific term. Do you make use of other people's technology?
00:17:10
Speaker 13: We build all of our technology in-house. When we started this company, there was nothing. in this space, and so we really had to be the tip of the spear. That said, I really think of us as a music company, as a product company. We are building technology, not just for the sake of building technology, but actually for the sake of delighting our users.
00:17:28
Speaker 3: And you cover a lot of AI stuff. There's so much focus.
00:17:31
Speaker 13: On on utility, on the enterprise, and there's not enough focus on what I think is a fundamental part of being a human, which is fulfillment, creativity, fun, entertainment. And I think this is to everybody's detriment to just think about everything through the technological lens and not enough through the human lens.
00:17:49
Speaker 2: How important is it? So, you know, we're talking about the medium of audio, but how do you sort of make it clear to the world this is a piece of AI-generated audio content?
00:18:00
Speaker 8: Yeah.
00:18:01
Speaker 2: And this is not. Do you need to? Is it incumbent on you to say, make that distinction?
00:18:06
Speaker 3: This is a really interesting issue. Just my opinion.
00:18:10
Speaker 13: I think when we think about what is AI music, what does that really mean? This is such a broad spectrum of things, whether it's somebody typed a few words into a text box or a professional using it just in bits and pieces at that final step. And in my opinion, we don't want any single party, whether it's an AI platform or a media platform, a set of rights holders.
00:18:29
Speaker 3: We actually want to make these decisions together.
00:18:32
Speaker 13: And to add more complexity to this, actually, this is kind of a shifting landscape as the technology itself changes, as the way in which we use AI in music production changes. And so it's actually good that we don't have firm rules of the road just yet.
00:18:45
Speaker 2: Let's use the case study of a vocal artist. It could be anyone, right? There are those that have concerns, right? But there are also people that see opportunity. They could license their voice. Essentially, they could make it available. They could open source it, I suppose. What do you see in that space? You know, that is basically the idea of making a piece of content attractive because a known entity's name is against it, even if it was AI generated.
00:19:11
Speaker 3: There is so much opportunity here.
00:19:13
Speaker 13: So everything you said about can you license somebody's voice or likeness, there's so much opportunity to build.
00:19:19
Speaker 3: New things around all of this.
00:19:21
Speaker 13: And so that's the stuff that we're really excited about working with our partners to build. The amazing thing is, again, there is finally the ability to build differentiated products in a world of music that has had a little bit of stagnation actually today.
00:19:36
Speaker 2: You go to the entrance to Bloomberg Screen Time, it says where entertainment meets capital. So let's talk a little bit about money. How are you building the business? And what are your kind of capital needs? Are you kind of in in growth mode or is is there is now some top line traction that you've been able.
00:19:53
Speaker 13: To get There's been a fair amount of traction, and you said 100 million users have used it. The last stats that we released were 2 million subscribers.
00:20:03
Speaker 3: $ 300 million in revenue.
00:20:04
Speaker 13: We are far beyond that by now, and so there is.
00:20:06
Speaker 3: Quite a lot of traction.
00:20:07
Speaker 2: Far beyond those two numbers.
00:20:08
Speaker 3: Yes, we are.
00:20:09
Speaker 13: And I think, just thinking about investors, we have amazing investors and partners for building this business, but a lot of people think of music as a small business and one that they don't necessarily want to get into, and I think We've shown the world, actually, that music is a big business. Music is a really big part of people's lives, and there's immense potential for growth.
00:20:28
Speaker 2: How do you manage usage, right? Because you must have compute costs. and then there's what you charge. How do you balance that?
00:20:36
Speaker 3: Yeah, we're kind of in the middle here.
00:20:39
Speaker 13: You know, we're not in the regime of, let's say, streaming, where the marginal cost of serving our stuff is so small. But we're also not in the business of general intelligence, where we just need to throw as much compute as possible at our problems, and they'll all get solved.
00:20:53
Speaker 3: Music is art. Music doesn't have right answers.
00:20:55
Speaker 13: Music is not something that you can just scale, and you'll get to where you want to go. And so we kind of sit in this in-between, and I think we're doing okay from that perspective.
00:21:03
Speaker 2: Suno CEO, Mikey Shulman, it's been great to have you here with us on Bloomberg Tech. Thank you very much indeed. Let's get to some news in the world of AI. OpenAI is accusing Chinese rival Moonshot AI of trying to extract proprietary data from its models. The company says users tied to Moonshot made thousands of attempts to uncover how its models reason through problems. Bloomberg Senior Tech Editor Mike Shepard joins us now. This was a big story yesterday that came just after the show. Explain the accusation.
00:21:32
Speaker 8: Well, the claims are that Moonshot had been working with or had actors that were associated with the company seeking to extract data en masse from OpenAI in a way that would evade OpenAI's attempts to hide some of the reasoning of its models. Companies like OpenAI and Anthropic have been trying to put up defenses against this practice of distillation where data is is extracted en masse and used to build new chatbots. And normally in the AI industry, this practice is acceptable. But when it's carried out on an industrial scale, that's where these companies get concerned. And we've heard anthropic and open AI level accusations against their Chinese competitors of unfair play in using distillation. And in fact, the Trump administration has even warned of sanctions on the practice against companies that have been carrying it out. And we've also seen Anthropic issue its own set of claims against Alibaba and also Moonshot for similar versions of this ad. So it highlights how both the attempts of the companies to try to put up defenses are being evaded and that the practice is still under is still being continued.
00:22:45
Speaker 2: Shep, there's another major story out there that we'd be grateful for some reporting on, how the world and America feels about guardrails, some whole data. Tell me about it.
00:22:57
Speaker 8: Well, yesterday, and this was a day after President Donald Trump held that high-profile lunch with Silicon Valley leaders, Quinnipiac University in Connecticut released findings that showed 91% of Americans favor putting some guardrails on artificial intelligence. and 81% support safety over innovation when it comes to actually pursuing AI development. Now, that really stands in contrast with what we heard from the president on Tuesday, The industry should police itself that in this agreement that they unveiled a few hours after this lunch at the White House, that the industry would take care of running its own tests on its models, but that the government would take and continue to take this hands-off approach. And what was interesting also in these findings, Zeb, was how people view the technology industry itself. 74% of those surveyed said that they don't trust AI leaders. And that also reflects a broader distrust of the technology itself, Ed. We saw in the survey findings that 53% of Americans said that they see AI causing more harm.
00:24:06
Speaker 3: Than good in their daily lives.
00:24:08
Speaker 8: Now, AI leaders, including Sam Altman, whom you spoke about this very issue with during your interview with him a few weeks back, they see it as a messaging problem and a branding problem. President Donald Trump has tried to address it, of course, by renaming it superintelligence. And yet we're seeing in these results that the American public has deep misgivings about the technology, its impact, and its safety.
00:24:35
Speaker 2: Bloomberg's Mike Sheppard out of D.C. Thank you very much indeed. Okay, back to Hollywood and coming up, we're going to be joined by George Stompoulos from Promise to talk about the need to redefine what a studio looks like in the AI age. Let's also talk a little bit about what's happening above our heads. Dragon now in orbit, traveling 17,500 miles an hour. Next, the nose cone opens. It exposes the systems that Dragon needs to rendezvous and dock with the ISS. From there, spacecraft performs a series of carefully timed burns, catches up with ISS. That journey is going to take that crew of four, three first-time flyers aboard Falcon 9 Dragon to the International Space Station before Dragon essentially lines itself up and autonomously docks with the International Space Station. It's a long-duration mission in orbit for that four-person crew. But as they say, everything nominal so far. Welcome back to a special edition of Bloomberg Tech. We're live from Bloomberg Screen Time in Los Angeles. AI is moving deeper into Hollywood, not just as a tool, but as the foundation for an entirely new kind of studio. Promise is an AI native studio, betting that the tech can fundamentally reshape how entertainment gets made. And its CEO and co-founder, George Trompoulos, joins us now. What is an AI native studio, George? Let's start with the basics.
00:26:07
Speaker 6: Great question, Ed.
00:26:08
Speaker 10: So, you know, the advent of generative AI has enabled creators to have 10X superpowers. And we sought out to build a company around these new types of creators. They are leveraging all the best models to produce original films and series at a fraction of the traditional cost and timeline.
00:26:25
Speaker 2: You know, I think back just even maybe last year, but three years ago, discussing the basic premise of And for lots of people, the dream was the prompt results in a feature film coming out the other side. Is that a reality now? We're talking about something very specific.
00:26:43
Speaker 6: You know, this is an artist-led process.
00:26:46
Speaker 10: You know, of course, when you open up an AI model, you can prompt something and get a result.
00:26:51
Speaker 6: Models are good for shots.
00:26:53
Speaker 10: Studios are good for producing films and series.
00:26:55
Speaker 6: And it's a collaborative process.
00:26:57
Speaker 10: It brings together artistry from character designers to environmental designers to visual effects artists and of course great storytellers. So a lot of the roles you would see in traditional filmmaking process are still there. But what's possible now is for smaller teams to do high impact work.
00:27:12
Speaker 2: I guess another way of pushing you on it, George, is to ask what is it that you do differently to a traditional Hollywood studio? How is the setup different?
00:27:21
Speaker 6: You know, if you look back at the.
00:27:22
Speaker 10: History of entertainment, there have been these technological shifts that have changed how the business works. We think there's no doubt that the advent of generative AI will be another one of them. So we are really rethinking the business from first principles, from how ideas are shaped, developed and tested all the way through to production, post-production and even how they're brought to audiences.
00:27:42
Speaker 2: But is it like, you know, somebody has a script. That's how this town works, right? Somebody has a script. They come to you and they say, here you go.
00:27:51
Speaker 10: You know, we do collaborate with incredible writers in Hollywood, as well as storytellers who haven't had their moment yet. And one thing that we do that's quite different, Ed, is we make the last thing first.
00:28:06
Speaker 6: Here's what I mean by that.
00:28:07
Speaker 10: Typically, if you're making a film, one of the last things you do is produce the trailer.
00:28:12
Speaker 6: In our world, once we have the story, the.
00:28:14
Speaker 10: Script, the idea developed, we actually go straight to a trailer or a proof of concept. So we can see the story leap off the page. You can get a sense of how it's going to look, feel, and sound.
00:28:23
Speaker 2: Let's take that trailer. Let's say it's three minutes long, 90 seconds. How much of that product is AI generated? How much of it is not? That's the bit that I think people are trying to understand.
00:28:36
Speaker 10: In our case, we leverage generative media for a large portion of the process. It sort of depends on what type of project you're talking about. At Promise, we're focused on animation. We're also focused on what's called hybrid. Hybrid is human performance in synthetic environments. And what that does is it serves to bring down the cost of visual effects and allowing smaller films to have great scope and scale.
00:28:59
Speaker 2: Okay, that's where I wanted to go. So you talked about, you know, when there is a technological shift, it changes an industry. Let's get to the economic change. Is this the case that the production process of a feature film or a television series is lowered through how you set yourselves up through the technology?
00:29:20
Speaker 10: Yeah, this is actually about a reduction in cost and timeline. In the animated side, we're seeing cost reductions in the 50% plus range.
00:29:28
Speaker 6: For certain productions.
00:29:29
Speaker 10: Now that's not to say every animated project needs to follow this methodology, but in our case we see that as an opportunity to bring new stories to life that weren't possible before.
00:29:39
Speaker 2: That's a saving for the industry. How does that manifest as business for you? What makes working with you, George, attractive?
00:29:46
Speaker 10: We think that it creates a new opportunity to shift the paradigm.
00:29:51
Speaker 6: If we were setting.
00:29:53
Speaker 10: Out to produce an animated feature in the past, that would cost hundreds of millions of dollars and take years and years and years. Now, with the reduced cost, we can produce that ourselves. We can own that and we can seek the distribution that we need for such projects. So many stories that weren't told before are now going.
00:30:09
Speaker 6: To be unlocked.
00:30:10
Speaker 2: I'm super interested in the backstory, backing from Andreessen Horowitz, Google's AI Futures Fund, kind of incubated by Disney. You're growing a startup? Is that fair?
00:30:23
Speaker 10: Yeah, this is absolutely a startup. We're a two-year-old company. We've been deep in R & D, building the structure of what we think a studio should look like in the modern era. We've been fortunate to bring on great partners that you've mentioned. We participated in the Disney Accelerator, which is how they engage with new innovative companies. They've been a tremendous partner. Really excited about collaborating with them. And, you know, we're now entering into the production phase. So we're in production this week on a hybrid. horror series which is uh has the scope and scale of a massive budget uh series but is actually done again at a fraction of the cost and timeline with an incredible crew of artists as well as ai artists that help bring the story to life.
00:31:05
Speaker 2: George Trompolo, CEO, founder of Promise. It's been great to have you here on the show.
00:31:09
Speaker 8: Thank you.
00:31:10
Speaker 2: Thank you very much indeed. Coming up, could AI actually help bring production back to Los Angeles? We'll discuss with Caroline Ingborn from Luma AI. I actually came up last night with Netflix's Ted Sarandos as well. As networks tighten their budgets, Conan O'Brien told Bloomberg's Ashley Carman that while this is a real problem for comedians, both good and bad can come out of it.
00:31:32
Speaker 3: Just like AI.
00:31:34
Speaker 2: This is Bloomberg Tech.
00:31:36
Speaker 3: Things are changing.
00:31:37
Speaker 14: The way I see it is that it's like the discussions about AI. There will be amazing benefits, and then there will be some horrible unintended consequences, and that is the case with anything that's new.
00:31:52
Speaker 3: Anything.
00:32:04
Speaker 15: When I worry about AI... I worry about my kids in school. I worry about the 30% rise in the number of A's given out at colleges over the last three years.
00:32:15
Speaker 4: I worry about learned helplessness.
00:32:17
Speaker 15: I worry about responsible use. I don't worry about Skynet, and I don't think that it's going to take over this business in any meaningful way. I think it's going to be additive.
00:32:33
Speaker 2: That was actor and producer Ben Affleck, who thinks AI will actually be an added benefit to the filmmaking industry. In the same vein, AI startup Luma AI says the technology could actually help bring production back to Los Angeles by lowering costs and making ambitious projects faster and easier to produce without sacrificing creative control. Luma AI COO Caroline Ingerborn joins us now. You and I were listening to Mr. Affleck together last night. His view on AI's role in the filmmaking process or the creative process. Obviously, Luma believes AI has a role. Just explain what Luma does and how you make a role in Hollywood.
00:33:17
Speaker 5: So Luma started out as a frontier research lab.
00:33:20
Speaker 12: That's right.
00:33:21
Speaker 1: What we are today is a full stack company.
00:33:23
Speaker 5: So what that means is that we do research on multimodal AI models.
00:33:32
Speaker 1: But then where our product.
00:33:34
Speaker 5: Is and how we go to market is focused on AI for creative work.
00:33:40
Speaker 1: And so if you.
00:33:41
Speaker 5: Look at this of how the industry has evolved, it is first like you need these models to be able to do anything, right? But if you only use the models, they are very unruly. And you saw this in the early user behavior. So the second layer of this is building products for creative professionals so that they can access the models, but also retain control. And the third layer is having forward-deployed creatives and engineers so that adoption really actually takes place.
00:34:18
Speaker 2: Yeah, we're familiar with the concept of the forward-deployed engineer generally in the field of AI. In my conversation with George Strompolos just a minute ago, I kind of outlined what the original vision was, but the prompt and the output is a full feature length film. That's not the reality, right?
00:34:36
Speaker 5: No, that is not the reality. And I would say that's not the goal.
00:34:42
Speaker 2: What is the goal?
00:34:42
Speaker 1: The goal is.
00:34:43
Speaker 5: Not to have a prompt input. This is a tool at the end of the day. And what I'm seeing that is so exciting is when.
00:34:54
Speaker 1: Can I take this out?
00:34:55
Speaker 3: Please pull it out.
00:34:55
Speaker 2: Don't worry about it.
00:34:56
Speaker 1: Thank you.
00:34:58
Speaker 5: What I'm seeing that is so exciting is this is a tool as all other tools that we have seen. And Hollywood is like built on technology shifts.
00:35:08
Speaker 1: This is a new technology shift.
00:35:11
Speaker 5: So far, I haven't seen any technology shift having as a goal to.
00:35:14
Speaker 1: It's a collaborative process.
00:35:16
Speaker 2: Well, on that collaboration, so I find the Luma agent interesting because you start as a frontier lab, right? But really what the agent does is direct the project to the best underlying model for that project. And it could come from OpenAI. It could come from another partner.
00:35:31
Speaker 3: Yes.
00:35:32
Speaker 2: Explain why that's important.
00:35:34
Speaker 1: It's very important because.
00:35:36
Speaker 5: In the creative field today, and I would argue in many fields today, there is no model to rule them all.
00:35:43
Speaker 1: There is no model.
00:35:44
Speaker 5: That can make a movie, even though I don't think any video AI company has that as a goal.
00:35:50
Speaker 2: Sweet Lord of the Rings reference, by the way.
00:35:53
Speaker 1: There is no one to rule them all.
00:35:55
Speaker 5: And so what that means is that as the creative professional, as our user, we serve them. And so we want our creative agent is... trained to give you as the creative professional access to the best model for what you are trying to solve for and so sometimes that means like yes you should go to the absolutely latest video model to get the highest quality output but if you're in the ideation phase and you want to generate a lot of content you don't need to pay for that Highest, most prestige. You want to be able to generate a lot and quite fast.
00:36:36
Speaker 2: We're still talking about tokens.
00:36:38
Speaker 1: Yes, we're still talking about tokens.
00:36:40
Speaker 2: Last night, the Netflix co-CEO Ted Sarandos talked about filmmaking in America, content creation in America, and in particular Los Angeles. And he talked about three specific projects, $ 400 million worth of production spend. Luma also has this argument that AI brings... energy, activity back to LA. What is that about? What is your point of view?
00:37:04
Speaker 5: I think there's like two very clear cases here. One is like if you are in LA today and you spend time in the community, It's fantastic. There are so many people that have dived into this new technology, and they're collaborating, they're supporting each other, they're making more content, they're sharing. The internet is filled with people just sharing, like, hey, I found out how to do this, I found out how to control this. It's a very generous, excited, and curious community.
00:37:38
Speaker 2: Generous token spend?
00:37:39
Speaker 8: Yes.
00:37:40
Speaker 5: It's a generous token spend, but ultimately they're also finding a bunch of hacks of how to optimize the token spend and get the most out of your token spend. The other one, which is a very clear example, is our collaboration with John Irvin.
00:37:56
Speaker 1: Yes.
00:37:57
Speaker 8: And.
00:37:58
Speaker 1: So what he has shown.
00:38:00
Speaker 5: With a project called a TV show at Amazon called Moses is that what he was able to do, so he spent years making TV shows abroad because that's how he could get the most out of the investments that he was doing and to tell his story. And that's like the constraint that you see if you're like at the, you know, the biggest director in the world, or if you're a YouTuber starting out, at the end of the day, you want to be able to tell your story. And so capital comes into that storytelling. But what John was able to do with Moses is... In Manhattan Beach, on a stage, hundreds of people working together to make Moses happen. And he was able to do that by hybrid filmmaking.
00:38:48
Speaker 1: So is it AI? Is it not AI?
00:38:51
Speaker 3: No, it's hybrid.
00:38:52
Speaker 5: And so they're real actors. There is a bunch of people using AI to move these actors from the stage in Manhattan Beach into any environment that you want. And this retains the actor's performance.
00:39:08
Speaker 1: It enhances it.
00:39:10
Speaker 5: If you speak to the actors, it's a lot more fun than any green screen has ever been. And the end result is fantastic.
00:39:17
Speaker 2: Luma AI, COO, Caroline Ingeborn, it's been great to catch up. Thank you very much for being with us here on Bloomberg Tech. Okay, coming up, as AI transforms Hollywood, who controls your image, voice, creative work? Familio CEO Dan Neely joins us to discuss protecting creators in the age of... of AI. Take a quick look at shares of Micron. Fourth quarter results after the bell last night. The story is momentum in the memory space with AI. The stock is down. There is like some stock-based comp issues. There are some questions on, is there a cycle for memory as there's traditionally been? And where are we in that cycle as it relates to HBM and AI? But the stock off two percentage points or so on a strong set of numbers. This is Bloomberg Tech. Bye.
00:40:02
Speaker 4: Bye.
00:40:11
Speaker 2: As AI reshapes the entertainment industry, who controls and gets paid for the use of a creator's work and likeness? Vermilio is tackling that question with technology designed to track and license AI-generated content. Joining us is Vermilio co-founder and CEO Dan Neely. And what was so interesting, copyright was the first fight in AI, in this town at least. I'm trying to understand the distinction between copyright and likeness.
00:40:36
Speaker 4: Certainly, yeah. I mean, if you think about copyright, it's a well-understood topic. Likeness is who you are. It's your voice, how you might move. It's your name in and of itself. All those things make up who you are as an individual. And if you are a famous person, that's ultimately who you are. That's how your fans recognize who you are. It's who they relate to. But it's this unique right that has existed for a long time, but AI has really brought it to the forefront.
00:41:00
Speaker 2: Dan, Familia exists for a reason. You're solving for a problem, but how has that problem sort of manifested itself with time? You know, as AI has, more AI-generated content has hit the market and the world.
00:41:13
Speaker 4: When we started this business back in, we started thinking about it back in 2020, there were about 19,000 deepfake creations.
00:41:19
Speaker 14: Pre-ChatGPT.
00:41:19
Speaker 4: Pre-ChatGPT, yeah. So we started thinking about the problem because we'd seen a couple of things happen. But there were about 19,000 deepfake creations back there. Today, there are about a trillion. And so just to give you the kind of context of how much the scale has happened, it's just a gigantic problem. And reality is people are fans of things. And because they're fans of things, they want to create with things, and they also want to engage with things. And so when that fake stuff starts existing, fans go and engage with it. They don't know who created it. They don't know if it's actually from the person they're a fan of. But that likeness right is something that needs to be protected.
00:41:48
Speaker 2: It's so multifaceted and complicated, you know, a deepfake. to all intents and purposes, is often unauthorized use of someone's likeness. And then the question is, to who does the value accrue? How do you solve for that issue?
00:42:06
Speaker 4: Yeah, so it's ultimately two things. First is let's identify all the unauthorized stuff. So our technology identifies across the entire internet.
00:42:12
Speaker 2: It finds it.
00:42:12
Speaker 4: Finds it. Let's make sure we understand what it is. Then our choices are, do we want to take it down or do we want to leave it? So taking it down is there's a bunch of bad stuff that's happening. Leaving it is, oh, my fans might have created something that's actually kind of cool.
00:42:22
Speaker 2: But now it becomes a fight for the lawyers?
00:42:24
Speaker 4: It used to become a fight for the lawyers, but now it's technology, where our technology can just automatically ask for it to be removed. And so we're doing that at scale today. And then it's about monetization. It's about attribution. How much of that is that new output that is a piece of music, is a new video, is just using my name to create an account? How much should I be compensated for that as well?
00:42:43
Speaker 2: Okay, so then there is the motivation or enthusiasm of an individual to license their likeness. You know, what do you see in the world of celebrity, creative, different artists in wanting to do this?
00:42:58
Speaker 4: I think we're in what I would describe as the messy middle.
00:43:01
Speaker 2: The messy middle.
00:43:01
Speaker 4: The messy middle. So it's a gigantic issue. So if we think about permission at scale is AI's issue, right? The entire infrastructure of AI, permission at scale is the problem. Because doing one-on-one deals is really not that complex. But they have to do it at a gigantic scale. They've got to get hundreds of thousands of people to opt into this thing. They can't just think about, hey, it's one-off here, here, there, and somewhere else.
00:43:24
Speaker 2: I get where we're talking about where the value accrues, right? Who pays the artist? You know, is it the AI studio? We've had Luma on. We've had Promise on the show today. Is it the traditional Hollywood studio? Then there's the creator economy, right? Who do they get paid by? What do you see?
00:43:44
Speaker 4: I see two things. I see certainly the platforms are going to start paying because they're going to have content. They already have content on their platforms that uses likeness in an unauthorized manner. So we have to get to a place where that gets company. Think of YouTube, think of Meta's platforms. It exists across every major distribution platform. Spotify, it's in all the places. So let's make sure people are getting compensated in the right way. Then there is, how do we think about you have an authorized model? So let's say all of the people that are building models get likeness to actually be something that they have a right to in the same way they are with copyright. That compensation is going to come from the amount of compute revenue that's been driven for those companies, not just, hey, I've got an interesting piece of content that someone's happened to engage with that I put advertising next to. The compute opportunity is actually the larger opportunity for these businesses and also for individual creators.
00:44:26
Speaker 2: Very quick, how does Vermilio work? make money it takes a royalty or.
00:44:29
Speaker 4: So um we have roughly a hundred thousand customers today they pay us a monthly fee to protect them and then we also take a we have a transaction fee associated with uh when someone.
00:44:38
Speaker 2: Does a licensing and very quickly what happens next yeah.
00:44:42
Speaker 4: What happens next we're in this moment where we have to get to permission at scale it is the issue it is the issue that needs to be unlocked we built this business to solve the permission at scale problem that exists so that we can say okay everyone has a chance to say i'm in or i'm out Once that gets managed, then ultimately that's where we'll end.
00:44:58
Speaker 2: Now, do the people you work with feel positive about AI? Or, you know, you said the messy middle.
00:45:03
Speaker 4: I think that, so for us, our customers are very concerned. Then they get protected. Once they're protected, they're like, oh, now I can start thinking about what else to do. Because the optionality is mine. It's not controlled by platforms. It's controlled by me as an individual.
00:45:14
Speaker 2: Dan Neely of Emilio. Thanks so much for being with us here.
00:45:17
Speaker 4: Thanks so much.
00:45:18
Speaker 2: And on Bloomberg Tech. That does it for this edition of Bloomberg Tech, live from Hollywood, live from Bloomberg Screen Time. But tomorrow, we are actually going to go somewhere pretty unique for our defense tech special, coverage live from Skunk Works, Lockheed Martin's advanced aircraft development facility. in Southern California, you do not want to miss it. It includes a conversation with Lockheed CEO, Jim Ty Clare. So many fascinating conversations here at the intersection of media, entertainment, and capital at Bloomberg Screen Time. Don't forget to check out our podcast. So many of you have been in touch about the way you engage with Bloomberg Tech, how you listen, how you watch, We're really grateful to those that do go to the podcast. You can find it on the Bloomberg Terminals as well as on Spotify, iHeart, and on Apple. The conclusion, kind of interesting there from Dan Neely, the messy middle. Hollywood meets AI, and they're trying to work out how to work together in a way that everyone wins. But there are a lot more conversations to come from here in LA and here in Hollywood. Thanks for being with us. This is Bloomberg Tech.
00:46:29
Speaker 1: Thanks for watching!
