This week: the business of movies is changing, with Mike Seymour.
Sandra Peter (Sydney Business Insights) and Kai Riemer (Digital Futures Research Group) meet once a week to put their own spin on news that is impacting the future of business in The Future, This Week.
Follow the podcast in your favourite app
Our guest this week
The stories this week
07:05 – Has the 21st century killed off the movie star?
Other stories we bring up
An AI-generated art won an art competition and artists aren’t happy
French tax officials using AI and aerial images to detect 20,000 undeclared swimming pool
Spain’s drought is causing an olive oil crisis
Our previous discussions on the coffee crisis as well as grain shortages and the chilli crisis
Ukrainian grain shipments resume under a UN-brokered deal
Artemis 1 is getting ready to launch
NASA sent a software update to Voyager 1
Observations from the James Webb Space Telescope
Worldwide box office stats from Box Office Mojo for 2019, 2020 and 2021
Our previous discussions with Mike, including our VIVID 2018 special and VIVID 2019 special
Mike’s interview with Pixar co-founder, Alvy Ray Smith
The working conditions in the VFX industry have become a pressure cooker
Martin Scorsese’s 2019 editorial in the NYT on Marvel and cinema
Our previous discussion of Squid Game and the future of content on The Future, This Week
Join us on Friday, 16 September 2022 to challenge common sense, learn about new ways of thinking, and engage with our digital future(s) in fun and creative ways.
DISRUPT.SYDNEY is Australia’s premier disruption conference from the Digital Futures Research Group at the University of Sydney Business School.
The expert speakers will tackle these topics from a diverse range of angles (view the full program).
With keynotes, short talks, Q&A panels, workshops – DISRUPT.SYDNEY 2022 is going to be bigger and bolder than ever!
Register now for a special discounted ticket ($139 early bird) using the code TFTW60. It’ll be an exciting day of disruption!
Follow the show on Apple Podcasts, Spotify, Overcast, Google Podcasts, Pocket Casts or wherever you get your podcasts. You can follow Sydney Business Insights on Flipboard, LinkedIn, Twitter and WeChat to keep updated with our latest insights.
Send us your news ideas to email@example.com.
Music by Cinephonix.
Disclaimer We'd like to advise that the following program may contain real news, occasional philosophy, and ideas that may offend some listeners.
Kai So is Tom Cruise the last movie star?
Sandra Is it the death of the movie star? Is it the end for Hollywood?
Kai It's not the death of Tom Cruise, we hope.
Sandra No, but the movie stars seem to be disappearing, the business of movies seems to be dramatically changing.
Kai Well, let's look into that.
Sandra Let's do it.
Intro From The University of Sydney Business School, this is Sydney Business Insights, an initiative that explores the future of business. And you're listening to The Future, This Week, where Sandra Peter and Kai Riemer sit down every week to rethink trends in technology and business.
Sandra Before we get to the business of movies, and we need help on that one because Hollywood is a big place, and the business of movies is complicated.
Kai Before we do that, there's other news.
Sandra There's been quite a bit of other news. AI is back with some very strange things.
Kai AI's been winning, like literally in the art world.
Sandra Yeah, there was something about AI-generated art that won first place at some state fair competition. And, you know, no one knew it was AI-generated.
Kai AI-generated, yeah. That was bound to happen, someone would use some of these systems like DALL-E and create something and slip it into a competition. And, you know, now it's happened.
Sandra So some guy called Jason Allen's AI-generated work, "Théâtre D’opéra Spatial” took first place in this Colorado State Art Fair.
Kai And the other artists in the competition are not impressed. The judges were by the picture, but the other artists, crying foul play.
Sandra The image is quite impressive, actually. And we'll put a link in the shownotes. But there's this scene that looks like it's some space opera, and it looks like a beautiful painting. And there's these classical figures in this Baroque environment with a huge window like a circular window, and it's a radiant landscape. Quite pretty, actually. But there was no artist work involved beyond giving prompts to an AI algorithm. I think in this case it wasn't DALL-E, but it was Midjourney, and we'll put links in the shownotes.
Kai So how was it presented? Was it an online competition? Because clearly, it wasn't an oil painting that this AI produced?
Sandra No, it was a physical competition. So it got a ribbon and everything. It was a digital art competition.
Kai Ah! Okay, so it was a print out of the art.
Sandra But the main point here is that we're starting to have these conversations. Where is the place of AI-created art in the world of art as we know it? What does this mean for how artists are perceived? Or how their work is evaluated?
Kai Is the creative prompt to an algorithm enough of a creative act to then be the creator of this artwork? Or who should receive credit?
Sandra Should this be a special category? Or should these art creations be judged separately from those created through human input alone?
Kai Is it the visual and the picture itself that is being judged, which might well have been the most impressive picture? Or is it the act of creation, the human act of actually imagining something and then putting it in a painting that is what we're actually judging? So all these questions have to be asked, as we see more and more of these creations that are being hallucinated by big AI algorithms.
Sandra But speaking of AI algorithms, we must bring up the story of the swimming pools in France.
Kai So this is French tax authorities spotting swimming pools using AI.
Sandra Yeah, using aerial imagery of people's backyards to basically try to spot illegal swimming pools. The idea is that in France, you have to declare if you build a swimming pool, because that could lead to higher property values, which means you should be paying more tax. So what the French tax authorities have been doing, together with Google and Capgemini, is to use aerial images, basically to identify swimming pools using a deep learning algorithm.
Kai This is interesting because this solution at once shows the amazing things that computer vision, deep learning can do, spotting swimming pools in aerial images. And what it can't do, because the law not only extends to improvements to properties, such as swimming pools, but also other things like annexes, verandas, permanent pergolas, and the algorithms, unfortunately, are not in a position to deduce whether a grey square on the screen is an actual annex that would deserve more tax payments. So one step forward, couple more to go.
Sandra But for now, it's still about $14 million for the tax authorities in France in recoupments.
Kai In what was the pilot project, which is now being rolled out to the entire country.
Sandra Staying in Europe, Spain's been devastated by drought, which means we've added one more thing to our list of food items that are in severe...
Sandra Distress. This is olive oil, because Spain is the world's largest producer of olive oil. Actually, it accounts for probably about half the global supply of olive oil. And Spain is experiencing one of the worst droughts ever in certain areas that produce olive oil, it's been the driest for 1200 years.
Kai And there's bushfires which further threaten plantations, which puts a strain on the worldwide supply for this cherished ingredient that Jamie Oliver pours on everything.
Sandra So we're adding this to our previous episodes around the problems we have with the coffee supply and also with the chilli supply, so the Siracha shortages, and also the ramen shortages.
Kai And for the ramen, fortunately, there is some good news on the horizon because wheat is finally making its way out of Ukraine after a deal with Russia which has improved the wheat price and therefore improved the accessibility of ramen. Now, there have been a whole lot of space news. Artemis 1, NASA is testing its rocket that will eventually take us back to moon. Amazing.
Sandra That hasn't really worked out.
Kai No, it's not yet but by the time many of you are listening, we should be underway. Hopefully. Amazingly, NASA has just sent a software update to the Voyager 1 that is travelling 23 billion kilometres from here. And of course, we are seeing loads and loads of amazing pictures of stars coming out of the James Webb telescope.
Sandra But today we really want to talk about the stars that we're not seeing lots and lots of pictures of anymore.
Kai So Sandra, what is the story today?
Sandra The one that got us really thinking was one from The Guardian around the "Twilight of the A-list: has the 21st century killed off the movie star?". And the argument there was that Tom Cruise is probably one of the last movie stars. Top Gun: Maverick, which has been doing really well at the box office.
Kai And very heavily featured him as the drawcard.
Sandra Is one of the last really big movie stars. There's still Brad Pitt, and Sandra Bullock's released a couple of movies, and I think even Jennifer Lopez did something lately. But mostly we go to see Spider Man, whoever Spider Man happens to be this week.
Kai Whoever is under the hood, who cares? All these people have masks on. So there's a...
Sandra There's a new Star Wars movie. We don't know who's in it, but we're gonna go watch it because it's Star Wars.
Kai It's a franchise. We're watching universes, and that has to be Marvel of course.
Sandra There seems to be something changing around the business of movies, all of the movies seem to be remakes. And we looked at the stats: 2019 had 10 out of 10 movies that were all franchises, sequels, or remakes. 2020 had nine out of 10 that were franchises, sequels, or remakes. Last year, eight out of 10 were franchises, sequels, or remakes.
Kai Or prequels. But yes.
Sandra Or prequels. The other two were Chinese films.
Kai Because that was the only country that actually were grossing at the box office because of COVID. So many of the movies that we see in the top 10 are known quantities, they're familiar to the audiences you go because it's the next one of, or it's the spin-off of features a certain character.
Sandra The argument that the article makes is that there seems to be something around, you know, the fact that now we've got streaming, we've got all this data, we've got social media, we've got lots of special effects in movies, there seems to be something changing around the movie industry.
Kai A shift away from the power of the big stars, the big names, the Schwarzeneggers of the world, that you would go and watch, go and watch the next Brad Pitt movie. Towards giving a little bit more power to the franchise, or maybe a little bit more of an incremental approach to producing movies.
Sandra And we thought this is a perfect opportunity to actually bring on a friend of the podcast who actually has worked in Hollywood for many, many years and understands this business better than anyone else here.
Kai Yeah, there's no better person in the University to talk about this than Mike Seymour.
Sandra Hi, Mike. Welcome back.
Mike Seymour Hi, guys. Thanks so much for inviting me on the show.
Kai So Mike, you've been in the industry for many, many years. Tell us a little bit about that.
Mike Seymour I bounce in and out of Sydney University, happily landing here at the moment, but prior to that I was working in Hollywood and in London, and I've been nominated for Emmys and won AFI awards and just generally worked on the visual effects side of the film industry. So I was basically, behind the scenes, behind the camera as it were, doing the tech, which of course then led to me ending up back here at Sydney.
Kai And it is fair to say that you are one of the experts in visual effects and the technology around visual effects, now working on AI and digital humans. Here, of course, at the Motus Lab in the University, doing research in this field, one of the leading people in that field, but because of your history, you're actually following very closely how the film industry evolves, you've got many colleagues there. So we thought, you know, we'll bring you in.
Mike Seymour I gotta say, Kai, one of the great things about being my age, is that all the guys you hung out with getting drunk and doing stuff in your youth, have now all themselves got higher up in the chain. So you get to know lots of, sort of, now people that are A-grade directors and stuff, not because you smooch them at a party, but you knew them when they were like living on the floor of your flat, on a couch or whatever. So yeah, I mean, I do track the industry fairly closely. And also, I have a blog, and I do a lot of writing about it. So yeah.
Sandra And we'll include all those links in the shownotes. But there seems to be something changing, Mike. So, there's this feeling that somehow with the advent of Netflix, and all the other streaming services and the disappearance of the movie stars, there seems to be something changing around the business of how we make movies, and what movies are, and what role different people play in the movie industry. So how do we think about the future of the movie industry?
Mike Seymour So I mean, the interesting thing is, it's absolutely one of those occasions of everything is completely changing, and it all stays the same. So in some respects, yeah, it's really shifted, especially because of COVID. And the whole move from a cinema distribution model to a streaming model, which was happening obviously before COVID, but was accelerated by it. So that is a really big structural change. And we're talking about vast amounts of money here. I mean, just extraordinarily large amounts of money. Modern film is like a 100 million to make, and probably another close to 100 million to market it. So these are not inconsequential amounts operating on a global stage with companies producing these things worldwide.
Kai And we've seen during COVID that box office income for movies produced especially in the West, China opened up a little bit earlier, but they plummeted, right. So the top grossing movie in 2019, Avengers: Endgame had about $2.7 billion in income, and the top grossing movie in 2021 hovered below 300 million just because people couldn't go to the cinemas.
Mike Seymour Yeah, and this has caused enormous structural problems, especially in the US with cinema chains looking like they're gonna go out of business, and really having to put up ticket prices, which of course, doesn't then encourage people to go to the cinemas. It's a very complex problem.
Sandra So one of the arguments that the article makes is that now everything's changed because we have new metrics, right? We're streaming a lot of these movies. So we have really good viewership data, we can keep score of where people drop off, what they watch, what endings they prefer, but also how they sign up, and how much they stay on these streaming apps beyond the actual movie. And also, we've got social media stats, and we know how well people engage with the movies by looking at what people are doing. Whereas before we just had, like, box office numbers.
Mike Seymour Yeah, I mean, the metric that everybody looks at now is hours or minutes watched, we used to look at box office. And similarly, it happens with the TV ratings, for that matter. We used to look on Thursdays when the ratings came out as to like you know, what rated? Now of course, people are no longer having ratings of the minute or the program's airing, it's, you know, what was watched over a period of time. So yeah, those metrics have changed dramatically, as have just the understanding of engagement generally with I think, media and entertainment.
Kai So is it fair to say that we can now dissect at a much more minute level what in a movie engages people and, you know, studios and directors trying to figure out what is the formula for a movie and then produce to that, and that leads to more prequels and sequels? Is that how it works?
Mike Seymour I mean, to a certain extent. I mean, if you think about it, in the old days, you'd have a movie in the cinema, you knew who went to see it. And they'd normally just sit to the end no matter what they thought. Then DVDs came out, right, and you'd be like, 'well, do they even watch the DVD? I mean, they bought it? I don't know if they watched it? And if they watched it, did they watch it all the way through?' Now I can tell you at what minute people are dropping off and why, and whether they're coming back to it. So I have a lot more information. But this article that you're referring to, I just wanted to, if I could, zero in on that for a second. Because I've read a story almost the same as this at least three times. One of them was almost a copy of this where it was, 'hey, where's the next movie star coming from? Sly Stallone, Bruce Willis and Arnold Schwarzenegger are all ageing. We don't have any new heroes. There's no one else that's going to attract box office'. And this was all like, you know, decades ago. I read it again when it was like, 'Hey, where's the next band coming from? That's gonna fill a stadium YouTube's getting old, Rolling Stones are getting really old, there are no big bands anymore, right?' So that happens. And then there's another article that comes out that always says, 'All the movies now are of this type. It's the end of cinema as we know it'. And I remember when this was all about disaster films. It wasn't Marvel films. All we made is disaster films, Earthquake, Poseidon Adventure. It was just disaster porn.
Kai We don't need that these days because we have the news.
Mike Seymour Yeah, exactly. So then there just becomes this, you know, question of, are these stars able to open a film? You mentioned a few earlier. And I would say there are some others on that list you jumped. Tom Hanks is an enormous box office pull, and an incredibly...
Sandra Not the youngest of artists.
Mike Seymour No, no, he's not. And neither is DiCaprio. But you've got people like Tom Holland that are coming out that literally have the potential of sort of taking that mantle. And I think I'd argue that he sort of virtually single-handedly, from that perspective, revived the Spider Man franchise, which was really lagging from just remaking the same film over and over again. And then of course, we have all the Chris's, you've got your Hemsworth, your Pratt, your Pine and your Evans. They're all great. Denzel Washington. I mean, I only saw Macbeth because he was in it. So there are good stars. But again, we could just take a step back, and this is why I love listening to your podcast. The thing that's kind of interesting is to challenge the central premise of this story, which is, do you go to movies primarily for the stars? Obviously, the stars are used for marketing them. But we used to always discuss it in terms that you'd like to think of the auteur or the person that's sort of you think of as driving something. In the stage, on the stage or in a musical, it's basically the writers. So you're going to see Chekhov or Shakespeare or Arthur Miller, or Samuel Beckett or Neil Simon. Or if you're into musicals, you're gonna go and see Sondheim or Andrew Lloyd Webber, or, you know, Lin-Manuel Miranda. Those are the names that drive it, they're neither the director, nor the actor. They are the writer. And then you move to television, and it was the producers. So you'd see David E. Kelly or Chuck Lorre have a new show, or J.J. Abrams that have a new show. Shonda Rhimes, Dick Wolf with Law & Order. You don't watch Law & Order for the director or the star. But the last one is films, right? And here, I would argue that it isn't the actors. It's the directors, right? It's a Tarantino film. It's a Scorsese film, Francis Ford Coppola, Guy Ritchie.
Kai Taika Waititi these days. Absolutely.
Mike Seymour There you go. So for me, that's the big driver. And in each of those three categories that we've just discussed, I think we do have good, brilliant talent coming through, I think what the article is hitting tangentially is now the collapse of the snobbery between film and TV, rather than there are no great film stars, right.
Kai But also, the argument in the article isn't to say this is either a good or bad thing. It's saying it's happening. And it might actually be good when the central movie star isn't appropriating all the wealth that is created by a movie, but you know, money trickles down a little bit more evenly. And that's one of the arguments that is being made.
Mike Seymour Sandra, you said it absolutely right. Like Tom Holland, for example, is the reason I go and see a Spider-Man. And most people wouldn't even know that Jon Watts directed the last one. So that's arguing against myself, I know. But still, that ability to open a film, I don't think I would see an Iron Man film if it didn't have Robert Downey Jr. in it. So it's not like I'd say that he's not relevant. Similarly, if Tom Holland wasn't in the next Spider-Man, I would be tempted not to see the film.
Kai But Batman has changed a lot over the years, right?
Mike Seymour Yeah. So it's not a clear picture. But it's certainly a picture that's changed a lot. And the funding, the amount of money, and then it's the production value of these TV shows has now virtually equalled cinema. So you can't really argue that TV is inferior.
Sandra But the argument around risk-taking in the movie industry wasn't around the fact that these people can't create art, but that the art that they can create is still incremental in that they will tell new stories in an established franchise or in a remake. So Thor: Ragnarok, right? We all loved it. But it is a Thor movie. It's not a completely new universe, right? There was all the Star Wars movies, and they're all Star Wars movies. There's a brilliant new Spider-Man, but it's still a Spider-Man.
Kai So rather than taking the big new bet, you're taking small bets on a big established platform.
Mike Seymour But I mean, I would say two things. Firstly, it's the hollowing out of mid-level films. So a mid-level film that used to be something that was just an interesting drama that you'd go in to see, now doesn't even end up in a cinema, it just goes straight to television. So Prey is a good example. Prey is the cinemas not at all, because it went straight to streaming. And it's a Predator film. Now, it's a sequel, but the point about it is it's a film that didn't have a huge star in it, but would have been a nice film to have at the cinema for a couple of weeks, a few years ago. Now that never even makes it. So once you take away the mid, you're left with the mega. And the megas require that kind of brand awareness, so that people will invest the 200 million it makes to make the mega blockbuster tentpoles. I think the other point is something that you guys have discussed a lot is attention fragmentation. See, I think one of the problems is how do I actually get that under somebody's nose effectively? In the old days I'd run a TV ad during the Superbowl and everyone would know the film was coming out, whatever. Now it's so much harder to get youths attention. And it's so fragmented that you have to make things an event. And to make an event you're spending like 2-300 million.
Sandra And for that, the data matters. And I know I have good data that people will come out and watch Spider-Man movies, so I'm more likely, as a studio, to probably invest in things where I have some evidence that this will work, rather than, you know, JoJo Rabbit.
Kai And we also see that a lot of the more original risk-taking content is now coming out of streaming like Netflix, putting bets on international shows that sometimes, almost outrageously, become successful, even though they're subtitled in a language like Korean, like Squid Game, which we've talked about on the show before. So we're seeing a bit of a shift. And of course, they were quite cashed up with VC money and success, and we will see how that works now that the share market has had a big downturn. What's your view on that, the role of streaming in sort of creating more innovative art forms?
Mike Seymour I do agree with you. If you think about the funding, and the sort of sense of risk management, there's like a portfolio risk management approach that is taken by the streamers. So they're actually more going for an aggregate solution. And the pay model is an aggregate pay model. I don't pay for an individual title. I'm getting all the things that Netflix offers. So it's a different relationship between funding and reward and risk. Now if I go to the cinema, and I want to make a movie and release it, it's going to cost me $100 million, apart from the various complexities of marketing, those additional funds I referred to earlier. That all falls on me, like if I don't get that back, my film didn't make it. It's a direct dollar equation to my film, and I won't make another one.
Kai So is it then fair to say because that risk equation is so different, like commercially, it just makes more sense to do something that we know works because it is in a universe? Because otherwise, not only is the bet misguided, there's only so many dollars that I can direct into different projects, that the ones that are getting funded are the ones that I actually know will be a success.
Mike Seymour Yeah, I mean, I think that you're going to need more marketing dollars per film at a cinema, because it's an individual item, than you are on Netflix. Which is why when the Russo brothers, Anthony and Joe, did their big film on Netflix, they didn't spend anywhere near the kind of money that they spent when the Russo brothers did a Marvel film. So there's different financial equations, which promotes this idea of we should balance the offerings, we should have some big budget stuff like the Russo brothers do with action films like The Gray Man, and then should have some more experimental stuff. But again, they're not having to fork out individual dollars for it. So they can, you know, sort of have it in the mix, as it were.
Sandra I want to go a bit to the people involved in this industry, because I think articles like this one tend to focus a lot on the movie star. We sometimes focus on maybe the director, right? That's something that we write about. And we recognise what they do in the movie, and it's quite visible. But there's all the people behind the scenes. And we don't get to watch a lot of credits these days, because we just skip 'next' on Netflix. But behind many of these productions, whether they're in the cinemas or on Netflix, as we've seen, there's a huge team of, for instance, special effects people, what has this shift meant for them? Because we're seeing a lot more movies with special effects.
Mike Seymour Yeah, I mean, almost every film has visual effects. Now even if it doesn't look like it does. The problem is, I guess to paraphrase it, it's like truth to power. What you have is a market where you've got a very, very small like, you could count it on two hands, if not one, producers that are generating these large budget projects. So be it a studio like Disney with Marvel or Netflix, those studios are great, and there's nothing wrong with them. But of course, there aren't many of them. And so if you're a visual effects house trying to get work, it's not a situation where you think about this project, you think about this project and the next six after it. And so it puts you in a particularly poor negotiating position. Second problem that you've got is that it is so flexible. And there is almost nothing that you can't do these days, that when I've got a film that looks like it's not connecting with an audience, visual effects is my solution to change it. But at that point, I've already got quite a lot of money out, and I'm worried about losing that. So I don't want to spend much more money fixing it. So there's a lot of price downward pressure on the effects houses. And then of course, just in terms of time, if you've allowed 100 mil, you really want that 100 mil to come back as quickly as possible. So you don't want to say 'Hey, guys, just take as long as you'd like with the visual effects, if it takes an extra year, what do I care? Well, no, I have 50 million in the short term money market. I'd much prefer to have it stay there then give it to you guys and then get it back a year from now'.
Kai So there's been a whole discussion around the recent Marvel movies that some of them have fallen short in certain scenes where the visual effects aren't up to the standards that the audiences would like, and digging a little bit deeper into it, there seems to be a bit of a perfect storm around the business of visual effects. On the one hand, we've seen a lot more of these big releases of these franchises coming out. So there's a lot of volume. Many of these movies are very heavy on visual effects, like Endgame, out of 2700 shots I think about 80 or so didn't have any visual effects in them. And then, of course, as you described, companies need to recoup that money. And that was another article that we're going to put in the shownotes. It says that the working conditions for the people in the industry have become quite a pressure cooker environment, stuff needs to be churned out really, really fast. The pipelines are full, and the working conditions are very challenging.
Mike Seymour Yeah, I mean, this has been a problem for some time now. I don't know if you guys remember Life of Pi? Life of Pi was getting the Oscar for visual effects while the company that made it was going out of business. And out on the streets in Hollywood, there were protests from people that were feeling, you know, obviously very upset that the film was so creatively successful and yet had caused the company that did it, Rhythm and Hues, to go broke. So it's not a new phenomenon. And it's a phenomenon which is partly, not entirely I'm not blaming the artists, but if you think about it, to a certain extent, people so want to work on these films, that it's like, well, 'I'm willing to take a hit on the profitability because oh my god, I'm going to be on the next big film, isn't that going to be great for my show reel, and it's not going to be you know, marvellous in my career'. And so there's a lot of pressure from individual artists or from a company to accept these high profile jobs.
Kai And then to over commit.
Mike Seymour Not even just over commit, but just lowball it. So it's a very, very low margin business, and any low margin business with high capital and fast turning technology means that a new entrant comes along with doesn't have any legacy gear that they have to depreciate, and just suddenly swoops in and says, 'Oh we'll do it for less because we've got a new tech'. So it's a hard, hard business. And as I say, they've got low negotiating rights with the companies that they're doing it for, the wafer thin margins. I guess the other thing that's interesting is that the studios themselves have been buying the companies. So Disney, of course, owns ILM. And then Netflix has bought Animal Logic. And they're buying Animal Logic as an animation rather than visual effects company. But yeah, that's not the first company that Netflix has bought either. So in the old days, of course, the studios had all that stuff in-house. And over the years, it's gone out, back in, out, back in. So it's a complicated problem. But unfortunately, the people that suffer the most are the artists who end up working these excruciatingly long hours to try and get really high quality work out, and aren't really rewarded for it.
Kai And on the capital requirements, we're seeing this transition from very capital intensive CGI of old, and you've shown this with your own researcher on Digital Mike, you know, the amount of tech it needed to produce the first digital human. And now we have neural rendering, AI coming in, which is much more low-weight, and it devalues many of those big tech technologies, allowing new entrants to the market to things in quite innovative ways to, you know, pun intended, great effect.
Mike Seymour Yeah, I think the other problem is you guys are just such educated viewers now. Like what we could have got away with a few years ago, is just you're now like saying, 'Oh, this doesn't look quite real'. Are you kidding? Go back and look at some of the earlier Hulk films, they're appalling.
Kai That have not aged that well, yes.
Mike Seymour Yeah, no, exactly. Now, occasionally, that's not the case. And you can point to films that have aged really, really well. But nevertheless, it's just the audience is so visually literate. My daughters sit on the couch going, "that's like, such a terrible green screen'. Or now, 'oh, I think they shot that on an LED stage'. And I'm like, 'okay, sure. But you know, I'm surprised you could pick that'. So yeah, it's a very informed audience that you're trying to wow. And then the central promise of visual effects, right, is a wow factor. But think about the bidding process. So Sandra, I come to you with a project and I'm a director, and I've got a major film, and Kai's your producer, and you're the creative, and I say to you, 'now listen, this is just going to be awesome. It's gonna be so amazing. Like you really want to work on this project, because this is going to be ground-breaking'. You're all excited, Kai's a bit nervous, because you're getting excited, and he doesn't want you to give away the house. And then I go, 'so what I basically want is I want this scene', and I kind of quickly describe it. And I say, 'but I'd like this to happen and why no one's ever seen before, just completely, just breathtakingly originally, how much is that going to cost?' And you have to go 'well, obviously not knowing how to do it, I can easily give you a good number.' And I'm like, 'but I just need a ballpark'. And as we used to say to clients, when they asked us for ballparks, 'have you ever tried hitting a ball out of a park? like, once you've established the park, it's always gonna fall in it'. But if you establish too big a ballpark I go 'oh, okay, sorry, I can't work with you guys. I'm gonna go to somebody else.' So it's just a hard problem. And it's a service industry where the only thing you have to say what it's going to look like, because you can't show me it yet because you haven't spent months doing it, is what you did before.
Sandra And also what worked before.
Mike Seymour Yeah, but here's the thing, what you did before, I'm not allowed to know how much that cost or how long it took. So the incentive for you on the new project to go that extra 10%, and stay those extra hours is really high, because that's your calling card on the next project. But on the next project, you don't say, 'This is what I did for 100,000 in three weeks, you simply say, 'Hey, look at this academy award winning shot I did', and I go, 'Well, whoever did that should do mine.'
Kai But doesn't that case study not somewhat confirm the premise of earlier where we said we see a lot more sequels, prequels and movies in the same universe, because a lot of the innovation, the wow factor, the artistic craft goes into things that happen within that universe. So you're not actually thinking about big new stories, completely new ideas for an entire movie, because a lot of what the audience is after are things within that universe. So Thor can do something new now. Or, you know, we haven't actually exploded the planet quite that way yet.
Mike Seymour Yeah. I mean, I think there's fatigue on exploding planets. I'll give you an example...
Kai Those foundations are strong.
Sandra The foundations have gone, Miek.
Mike Seymour What I loved recently was Everything All at Once, which was magnificent. And I'll just contrast it if I can, with Dr. Strange. So the guys that did that film, there were five of them, literally five people. And they weren't in the same room. They were remote. And actually, I was talking to them when the guy who was the visual effects supervisor found out that one of his own team did most of his visual effects work on a laptop, which got so hot that he was having to buy cooling pads to try and keep it cooling down. Now this laptop that he did shots for this film, which I saw in a cinema at Easter, was like not even a state of the art laptop. And yet, that film was so fresh, so original, so interesting, and incredibly similar in plot to Dr. Strange. In one case, it was a omniverse/metaversey, let's jump around between different verses. And in the other one, wasn't it exactly the same thing? But in one of them, it was big planet-busting Marvel effects. And in the other one, it was two rocks, silent on screen for 30 seconds. And I was laughing out loud. I just adored it. And so, I think the end of the day, you have to come back to the quote from the guy who wrote Butch Cassidy and the Sundance Kid, which is basically no one in Hollywood knows anything. And if you can come up with an original, fresh take on stuff, and you've only got five dedicated creative people who just loved what they were doing insanely clever about it, and some good actors and good script, then you're going to deliver a better film than just throwing money at it.
Kai And again, that confirms the central premise, because these are outsiders, they're, you know, people in the garage coming up with some really good ideas, because the studios with big money, iterate on the formula that they know works. And they, you know, figure out what else they could put into that universe that would incrementally draw audiences into the cinema. So it's a great story about how new creative artistry can come in. And we have seen that streaming seems to have like that dual role of figuring out what the formula is, but also coming up with a new funding model that allows a bit more artistic freedom. But a movie like Everything, Everywhere All at Once seems to be the exception now rather than the rule.
Mike Seymour I guess I'm just offering it up as the, how can I put this, almost like the great white hope that there will always be a new generation of innovative actors, innovative filmmakers. But like Francis Ford Coppola was a major disrupter, right? Lucas, major disrupter, like so much of the tech we use in the film industry came out of stuff that ILM did, and Lucasfilm did with editors, and all this kind of stuff. But of course, they're now older, and there's going to be a new generation that comes through. And I have a lot of hope for that. But I also have hope that as those filmmakers come through, that we might be able to adjust the model to be less sort of a service model that's just on a low percentage point, and more of a profit-sharing. creative-sharing role that allows these people to earn and have more decent, you know, home lives and stuff.
Sandra And use less data. There was an article, if you remember a couple of years ago that Scorsese had in the New York Times where he came out against Marvel movies, because he said 'it's always the same story because people test the endings, test ,market research, audience test, then they redo it, and then they test it again until it's like the perfect ending or the perfect solution'. So the idea was to somehow try to retain as much of the originality that directors would have in these movies to put forward their own vision. And I think we were just talking earlier about Blade Runner and about how the vision of a director is sometimes, you know, not the mainstream accepted popular view, but it's the artistic view.
Mike Seymour Yeah, I mean, Ridley Scott re-edited and redid Blade Runner several times because initially, he didn't have the clout to deliver the film the way he wanted it. And we've seen Francis Ford Coppola, George Lucas and a bunch of people go back. But I guess that rewriting of history is for another podcast, I assume. But it is an interesting thing that you can do.
Kai So, Mike, we don't do predictions on the podcast. But could you give us a prediction about where this whole juggernaut of the film industry is headed, with all the technological innovation in it, that seems to be both enabling us to do great new things, but also seems to stabilise us in the world of big movie incrementalism.
Mike Seymour I think while you have the financial model that we have, at the moment, it only makes sense to have big budget films, because they're only the sort of films that can get people to actually go to a cinema. And cinema going is expensive. And so it will move much more towards like the Broadway model where you have these big plays, which, let's face it, have exactly the same problem, right? If you look at the plays that are coming on Broadway, many of them are just play versions of feature films, or on the West End, you go, 'but didn't I just see that film?' And it's like, 'well, yeah, but now we're making a musical out of it'. So that name awareness thing, that's what's dragging people in, and then you can do everything you can to leverage off that name. Now, whether that name is the name of the actor, because quite frankly, like if you told me that Meryl Streep was in a play in Sydney, I'd go and see it no matter what the darn play is, right. But by the same token, you know, if it's a play, I've heard it before, like it's Waiting for Godot or something and I already know that, that'd be great, I'd love to see a new version of that, which is basically a remake. So it's that awareness factor, with this factor of how incredibly expensive it is to both stage and just as a punter to go and view. I can't see that model changing, though I can see a lot more work happening in the tech side of the streaming industry. Because right now, and I know you've touched on this before, it's just such a nightmare. I sit every night going, 'Okay, so we're going to watch that new Lord of the Rings or whatever it is, Game of Thrones. What service is that on again? Is that on? No, it's not on that. No, wait, wait, who's got the remote for the other one? Oh, wait, no, it's on the, huh? What?' I mean, the fragmentation
Kai The streaming wars. yes. And we put the link in the shownotes, yeah. It's such a mess.
Mike Seymour Yeah, so there's much to be done. And as that happens, and we get a kind of a rationalisation that industry, I'm sure you'll see changes. But I do have a lot of faith that the industry reinvents itself. Because at the end of the day, things are so crap that you really want to go and have a good escapist experience. And that's what Hollywood provides.
Kai And that's almost all we have time for today. Mike, we touched on your research earlier, amazing work around digital humans, not just faces, but also voices. We have an event coming up, you're in it, and some of your colleagues from Respeecher. Tell us a bit about that.
Mike Seymour Here at Sydney University we've done some amazing research and worked with engaged research partners in industry to do a replacement effectively of dubbing. So as you'd know with dubbing, somebody reverses a character but of course, their lips never match. And it's a bit hokey.
Kai I grew up with that. It's horrendous.
Mike Seymour Or you have subtitles, in which case you're not looking at the actor, you're reading the subtitles. And quite frankly, sometimes the subtitles are out of sync with what the actor is expressing as an emotion. I remember sitting in a cinema in France laughing at what I was hearing, but the audience was laughing at a different point because they were taking time to read.
Kai I had that exact same experience in a cinema in France. They were laughing, I was still reading. It was horrendous.
Mike Seymour So anyway, we came up with a process with our engagement partners of doing what we call facial re-enactment. Where if Kai was, and I'm sure this would be true, and Academy Award winning actor, then I would be filmed delivering lines and it would make it look like Kai's mouth was moving in sync to my words. Now that's stuff that we've just done and it has been successful. But in that scenario we change, with AI, Kai's face so his face looks still like Kai, but with the correct lip movements. Trouble is, you'd still hear my voice coming out of Kai's mouth, which let's face it, it's kind of weird. But a company in the Ukraine actually called Respeecher, who has already won Emmy awards for their work on For All Mankind, and do a lot of work with Star Wars doing the voice of Darth Vader and Luke Skywalker. Those guys can take my voice and make it sound just like Kai's voice. So not only is Kai now speaking with my lip movements driving his lip movements, but the words sound like they're his words. Now, this is extraordinary technology. And it's basically doing for audio what we've been doing for vision. And so we were like, 'Guys, this is like such a natural fit, we should ...'
Kai It's got applications in so many different fields, like the innovation that can come on top of that outside of the film and entertainment industry are quite staggering.
Mike Seymour Yeah, Respeecher's so good that, Sandra and I know that you can sing and Kai can't, so you could sing.
Kai No, I cannot. Famously not.
Sandra I can bring on the rain.
Mike Seymour You could sing, and it would look like Kai is singing in his voice.
Kai Well that, no one would believe that.
Mike Seymour Well, yeah, but this is what they've managed to pull off. So anyway, we just thought it was incredible. And there was this opportunity for them to come out. And now the second part about this is that these guys are doing high tech, cutting edge AI in a goddamn war zone. And so we've managed to work out a way of getting one of their co-founders out of the Ukraine to Poland to Sydney for DISRUPT.
Kai 16th of September, you can all join, shownotes have a discount code. Join us for a full day in Sydney CBD. Talks by Genevieve Bell will talk around AI.
Mike Seymour And can I do one other plug?
Mike Seymour In terms of AI, which you know is my thing, baby. We have Adam Ferrier coming up to talk about how his agency which is Thinkerbell, which by the way, I think it's like out of the last six years that they've been in existence has won agency of the year five times. But they're incredible behavioural economics slash behavioural changes. He's going to be talking about their use of AI and bees, which is extraordinary. And then the afternoon session, we're going to do a whole creative ideation process using these new AI engines such as Midjourney and DALL-E, which allows you to visualise, just from a piece of text, the most extraordinary realistic imagery. So having Adam, who you might have seen on Gruen Report on the ABC or whatever, having him lead that workshop of ideation and idea generation using AI, in addition to his talk in the morning, I mean, you had me at Adam.
Kai And also Simon Kemp, and talks on the metaverse and blockchain.
Sandra And much, much more and a fully-catered day, come spend the day with us. September 16, and the discount code will be in the shownotes.
Kai Mike, it's been fantastic.
Mike Seymour Well, it's so weird to be in the room with you instead of driving my car listening to you.
Kai Well you can soon drive your car listening to yourself.
Mike Seymour No, I don't think I'll do that. But thanks.
Kai Thank you, Mike. Thanks, that was fascinating.
Sandra Mike, thanks again for spending time with us.
Mike Seymour Thank you.
Sandra Thanks for listening.
Kai Thanks for listening.
Outro You've been listening to The Future, This Week from The University of Sydney Business School. Sandra Peter is the Director of Sydney Business Insights and Kai Riemer is Professor of Information Technology and Organisation. Connect with us on LinkedIn, Twitter, and WeChat. And follow, like, or leave us a rating wherever you get your podcast. If you have any weird or wonderful topics for us to discuss, send them to firstname.lastname@example.org,
Kai Whoever is under the hood, who cares? All these people have masks on so there is a...
Sandra Yep, there is a new Star Wars movie, we don't know who's in it but we're gonna go watch it before, because it's Star Wars.
Kai It's a franchise, it's the universe that we are into, is it DC? And of course it has to be Marvel.
Kai No? What?
Sandra I don't know, DC? I don't know what you're talking about.
Mike Seymour You don't know what DC is?
Sandra All I, like when I hear DC I think you know, Superman versus what was it, Superman versus Batman, which was the worst movie in history.
Kai We're inclusive here.
Sandra No, we're really not.
Sandra No. No.
Kai Okay. We're watching universes and that has to be Marvel, of course. Well, you've got your Easter egg.