Comment by jparishy
8 hours ago
I liked this article. I appreciate that it didn't try to say it is or isn't AI.
To me, the entertainment industry suffers from a lot of the same problems in most other industries that chase "efficiency", in terms of resources used and profit made. Economies and industries and labor are interdependent and more "alive" than balance sheets and bank accounts.
For the film industry, when you start moving things away from LA to "save money", it has knock on effects that happen over long periods of time. Multiple Quarterly Earnings Reports long, if you will. Local businesses that depend on the film industry close due to less work, so then there is less expertise available. Less expertise means it can command high prices. Suddenly it's too expensive to film in LA altogether. So the rest of the jobs leave too.
This pattern seems super common, not just in the film industry.
It is a narrative that interweaves with AI, too. AI is supposedly an efficiency boom. In the macroeconomy, who is the "efficiency" we are chasing for, who benefits? Who is getting the money that was "saved"? Regular people do not have more more money or time. The "efficiency" is for people who are already very rich, to get richer. Is that worth the price we're paying? I know my answer. The article gets close to it by mentioning the consolidation in Hollywood, but I do not see how we fix this without enforcing our antitrust laws. It is embarrassing what we let rich people do in the name of stock price go up.
In general I fully agree except with your conclusion. In the short-run efficiency immediately benefits the established players, but in the long-run it benefits, more or less literally, everybody except them. Because as you bring the price down on things you enable more efficient competition. Competition increases, margins decrease, baseline minimal standard of quality for success increases.
Software is a very clear example on this front. Valheim [1] is a game that was made mostly by one guy, at first at least. Not that long ago, this would have been a multi million dollar game produced by a wide array of people. It's just that tools, markets, and more have made it possible for even single developers to have an absurd degree of efficiency. And LLMs are probably going to bump this up exponentially.
This is why a metaphor I'm currently drawn to is one of people living in a very agrarian society just prior to the Industrial Revolution. What would they have envisioned being created? Super farms of course. And those super farms were indeed created, but the overall impact was such that those super farms became a practically inconsequential part of the overall economy. The future we're moving into isn't going to be the same but more efficient for those on top. That efficiency is going to revolutionize the economy in ways that are probably impossible to see from a distant, much how somebody living in an agrarian society couldn't have even begun to imagine the 'real' impact of the Industrial Revolution.
[1] - https://store.steampowered.com/app/892970/Valheim/
Not only is Valheim remarkable for the fact that’s it’s largely a one man show, it’s also a labour of love that couldn’t come out of the AAA gaming world, which is creatively bankrupt. They’re busy trashing beloved gaming series left and right and shuttering once beloved studios.
We’re now entering a new era where projects like Halo Reclaimer[1] are more creative and more popular than some of the slop put out by the AAA world with massive marketing budgets. There’s no slop, no micro transactions, just Halo Forge turbocharged by virtually anyone who loves Halo and has a Claude subscription.
[1] https://fangamesdb.com/games/project-reclaimer-halo-3.html
Reclaimer looks great. It's like ReSkate for Halo, looks a bit newer and less polished but still great. I think I saw a video about this mod from a gaming creator on Youtube. I just don't get why it's closed source, if the anti cheat code is sensitive they can just keep that one part private and release the rest.
The main difference I see is they used Claude to write patch notes. ReSkate is pretty strict about only using AI for code, all assets and official comms are human made. I guess it's because a lot of their players are real life skaters and that community hates anything that looks fake.
> when you start moving things away from LA to "save money"
Economic hubs work when there is more efficiency to be found in industrially-codependent resources being located close to each other, than there is in cheaper labor costs outside the hub. Hollywood's heyday was when there was enormous value to putting actors, agents, producers, cameras, sets, editors, VFX, writers all within close driving distance of each other, so that you could organize new movies and shows at the drop of a hat. In a day and age when teenagers are able to use cellphone cameras and pocketmoney to produce stories that are compelling enough to command attention and advertising dollars, the value of that geographic proximity has declined tremendously.
AI didn't build the coffin, but it's been putting nails in it.
Another huge nail was the strikes - business will continue with or without those on the picket line, but it just moved to where there weren't strikes.
There are also tax considerations, even movies get shot away from Hollywood.
The primary issue is that the digital economy is attention supply locked now that services expansion has hit a wall. And so the only way to extract infinite growth money going forward, which dealing with commoditisation and erosion of talent and technology moats in any form, is to lay off people.
AI making things cheaper and faster makes it worse, not better because it drives competition up and strengthens the bridge trolls at the attention gate aka platforms while taking power from both viewers and creators.
>Regular people do not have more more money or time
Of course they do. Median real weekly wages[1] have been rising for decades all while the average number of hours worked per worker have fallen[2].
[1] https://fred.stlouisfed.org/series/les1252881600Q
[2] https://fred.stlouisfed.org/series/avhwpeusa065nrug
Meanwhile household basics increased faster than wages. In other words people don’t have more money.
https://www.unitedforalice.org/essentials-index
The term “real” means the values are adjusted for inflation
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This is research from a labor advocacy group, with the explicit aim of the organization to advocate for this sort of thing. This doesn't mean the research is is automatically invalid, but it is bias worth mentioning.
Looking at an article from the CATO institute, over the last 30 years wages have climbed 169 percent, while food prices 111 percent.
But an even better measure is PCE, or personal consumption index. Rather than CPI, or any other "household basics" measure, which subjectively categorize goods and then tracks those, PCE measures the total dollar amount spent by the entire U.S. consumer sector on goods and services. This is what is used by the FRED database referenced in the reply above.
https://www.cato.org/commentary/why-dire-pronouncements-abou...
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They do have more money, less spending power.
> Meanwhile household basics increased faster than wages
Not what real means!
People lack money, but a Netflix (or some other streaming) subscription is a very cheap way to buy a lot of entertainment, and just about everyone has at least one.
I first saw the claim everything is hunky dory because workers are working fewer hours from a economist probably ten years ago. The idea is workers are choosing to work fewer hours and instead enjoy more leisure.
So to point out how inanely out of touch economists are.
The problem with that is the worker economic base unit is a family not one person. Now compare 1960-70s where one person in the household works 40 hours a week. Compare with a modern family where both parents are working a combined 70-80 hours a week.
So yeah workers are working slightly less hours and families as a unit substantially more.
I don't find either of these charts dispositive by themselves. The cost of healthcare, education, housing, transportation, and insurance have easily outpaced any growth in wages. Another facet of this debate is that cheaper goods aren't necessarily of equal or better quality.
> Of course they do.
That level of certainty is not justified.
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> the average number of hours worked per worker have fallen
Hooray for just-in-time scheduling where workers have to be available full time but rarely get scheduled full time. It’s an innovation that has been great for capital and terrible for labor.
Yep, keep everyone part-time so they don't get benefits.
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Upvote for bringing data, since I did not. That said, that quote was in reference to AI, so referred to the past 3-4 years. And of course, our money today is not worth as much as it was 20+ years ago. Also many important goods and services increased in price at a higher rate than inflation or wage increases. It might be interesting to look at such industries for a history of consolidation or PE-involvement.
The data by the Fed linked above is inflation adjusted.
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For what it's worth, I thought the rest of your comment was a very accurate description of how labor and capital are reallocated within an industry. The question is simply whether it's a bad thing that Hollywood studios have decamped for Atlanta and Toronto. For the people working in LA that don't want to move, I'm sure the answer is yes. But on net, I think it's probably meant more and better work for more people in general.
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The CPI has gone up far faster than real wages.
https://fred.stlouisfed.org/series/CPIAUCSL
People are earning about 12% more and working about 5% less since 1980, but everything costs roughly 3x what it did in 1980 relative to wages, and that's where most people are pinched.
Real wages are inflation adjusted. So if everything costs 336% of what it did in 1980, and the real ages are 112% of what they were, then that means nominal wages are 376% of what they were.
It doesn't make sense to compare CPI to real wages. Real wages are wages divided by CPI or another inflation index.
Nicely sliced. Weekly wages for full time workers have been rising for decades while fewer workers work full time. I don't think this data backs your assertion.
The number of full time workers as a percent of the total employees has gone from roughly 84% (rounding up) in 1979 to roughly 82% (rounding down) today. There was a spike in people working part time in the wake of the GFC, but we've returned to trend.
Also, I chose weekly wages because annual wages are complicated by time off, which was the other item in question.
Something like 80% of workers are full time.
25% increase in half a century? We ahd like 3 technological revolutions since then and economy grew massively.
Compare that to how much wealth appreciated, like a price of gold or real estate.
Median real wages increased by the narrowest possible meaning of this word.
Trickle down economy is literally a trickle.
Boomers gonna boom
> In the macroeconomy, who is the "efficiency" we are chasing for, who benefits? Who is getting the money that was "saved"?
Everyone who uses those products and services. Prices go down and people can get much more in aggregate. More entertainment, healthcare, etc.
Why? AI is taking jobs. getty images just filed bankruptcy, stackoverflow went from heavy use to almost no use. AI is taking jobs, tipping toeing around it isn't the best thing. It needs to be said, and then what next needs to be figured out because first we talk about 200k jobs, then we will next talk about 2 million and then 20million
Stackoverflow killed itself long before AI appeared: they developed so hostile and toxic culture that it basically collapsed its utility to zero.
Or not. Significant shifts in the nature of emplyoment are undoubtably disruptive, but there's no particular reason to believe this one will result in mass unemployment any more than previous shifts have done so.
Especially if we're talking about jobs in creative industries that require customers with the means to support and consume their output.
Besides, an overabundance of surplus labor, if properly managed, is as likely to lead to a better world than a worse one. There's no ironclad rule that everyone, or even the majority, need to work to live or live to work to be happy. And many creatives, in particular, would be happy and productive working on personal and noncommercial projects if funding were no longer an issue.
A surplus of labor, by definition, reduces the value of labor. Most people are labor, so this means their earning potential is reduced, which means their social mobility, ability to take care of themselves, is reduced.
When you consider that this conversation assumes we are talking about the US and not the rest of the world? It is sobering.
The AI bet hinges entirely on the new types of work that arise from it.
> there's no particular reason to believe this one will result in mass unemployment any more than previous shifts have done so.
Of course there is. Permanently replacing labor is quite obviously and quite literally the point of AI. No previous tech shifts are comparable.
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> AI is taking jobs, tipping toeing around it isn't the best thing. It needs to be said, and then what next needs to be figured out
If we think about it, AI can be seen as dumping cheap products below cost and disrupting the domestic market.
I mean the real cost of production is unknown due to skirting of copyright laws in many cases and even if we discount that, it is well known that AI is being pushed far below the actual costs for providers. There are disruptive technologies, yes but this is not the same if the real cost is hidden or deferred and it doesn't compare with horses/cars or whatever analogy that comes up often.
In the physical world, this is called dumping isn't it? Just because tech is involved it doesn't change the fact. Countries already have anti dumping laws.
"real cost of production is unknown due to skirting of copyright laws"
Copyright laws themselves are not completely "real", not in the sense that digging coal out of the ground is. They were once tailored for Disney to maximize its profit; now that Disney is no longer the juggernaut it once was, they may be re-tailored to maximize the profits of the new juggernauts.
I live in Atlanta ("y'allywood"), a formerly big LA film outsourcing location. They shot much of Marvel and Netflix stuff here pre-2023. The unit below me has been rented to Winona Ryder and Dave Bautista.
Beyond that, my hobby is film and I know tons of people in the industry. I've made indie films with them.
All the jobs have gone to Europe. It's simply cheaper to film there now. Amazon and Netflix built infrastructure and taught local crews how during the pandemic content wars.
Looking at my Gen Z wife, all the eyeballs have gone to TikTok.
There's the answer.
How much vfx is being done by AI video editing software/ massive gpu clusters over previous locally employed vfx studio artists? Maybe I’m thinking about this wrong but isn’t the compute/AI vfx models now reducing the amount of humans needed to edit things like Marvel character’s special effects scenes, etc?
That’s really good insight! The graph only includes US employment. To see global employment instead would be enlightening.
yes and also movies have gotten worse (more poorly written)
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These are far more plausible explanations. AI can no doubt bring certain efficiencies, but for the most part consumers seem to be squarely rejecting primarily AI-generated creative output.
It's crazy how California and the LA area local governments killed their "golden goose" by driving out the film industry. I guess progressives can't stop themselves from doing that, but it's always sad to see.
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Economists keep saying over and over that so far AI has had minimal impact on the economy. That may change in time, but we aren’t seeing massive losses as a result of AI, despite some C suites using that as an excuse to lay off after over hiring.
https://siepr.stanford.edu/publications/policy-brief/what-re...
This is my first time seeing this publication. It was insightful -- thank you for sharing.
Change comes slowly, then all at once.
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> Economists keep saying over and over that so far AI has had minimal impact on the economy.
Economists (including but not limited to Alan Greenspan, Robert Rubin, Larry Summers and Arthur Levitt) also spent a decade arguing against Brooksley Born's 1998 warnings that unregulated over-the-counter derivatives would inevitably lead to a financial crisis.
Economists can be spectacularly wrong and short-sighted (and blinded by prior assumptions of how things work) until suddenly the thing that should have been obvious the whole time is no longer ignorable.
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Breaking news, frog in pot says water isn’t too hot yet
Maybe a lot of people worked at stackoverflow idk; but I have been organising electronic “underground” music nights for 15+ years and basically stopped now because there just wasn’t a big enough audience anymore.
Anyway what I’m trying to say is that I think COVID and its aftermath is a much bigger factor here than AI, especially when it comes to “live / performing” art
To use your example of the movie industry, everyone gets the benefits of the effiency gains.
There's twice as many scripted shows today and twice as many movies released despite the average person spending half the time they did 30 years ago watching TV and movies. For less than the price of a 1990s cable tv subscription we can access almost any movie, instantly streamed to our HDR TVs at home, on demand. The digital VFX we expect of a low tier direct to streaming show are better than the some of the best 90s movies (practical effects excluded).
There are hundreds of thousands of people across the world using the 4k camera in their pocket they bought for a few hundred dollars to make hyper specific media and distributing it free on YouTube. They are editing it in cheap or free video editors on their computer or built in to their phone.
It's easy to shit on modern media. With democratization comes slop. There's garbage now just like there was before. But we are absolutely benefitting off the efficency gains of the last few decades.
Offshoring of manufacturing to China is the analogy that springs to mind for me.
Modern technology makes distribution free, so then you need to compete on brand and quality.
Outsourcing seems extremely short-sighted in this environment. You're devaluing your brand, and giving expertise and training to another place that can make their own products.
I also wonder how much can be attributed to weakened intellectual property protection. Comments in this thread say they don't pay for anything because they can watch it all for free.
Rhythm and Hues (Oscar award winner for “Life of Pi”) was killed because it was cheaper to move that work offshore.
Sure, we can blame AI for a lot of crimes, but let’s start with the people who offshore everything first. Then when those offshore people get fired because of AI, you don’t feel so bad because it’s not like you’re firing anyone or killing any companies in the same country, right?
At the end of the day, what is the functional difference between offshoring and AI? People in this country still get fired and can’t find work, because the work is no longer done in this country. And then later, much of this work is no longer done by humans in any country.
Profits über alles.
> I liked this article. I appreciate that it didn't try to say it is or isn't AI.
...because nothing in it supported the thesis?
Print and audio/video have been showing clear declines since the 90s, thanks to the death of print, CDs and cable. Maybe AI is part of this, maybe not, but if it is, we're talking about a slight change in slope. These industries were walking dead before CNNs were a thing.
The one industry where you'd expect to see the clearest impact (coding) is basically flat.
FWIW, there was a very good recent NY Times opinion piece titled "I Teach at a Business School. It's Time to Shut Them Down." by a professor at the University of Cambridge business school who argues that these schools have solely promulgated this idea of "efficiency" as their primary output to the detriment of society at large. Worth a read if you're interested in the topic.
Consider "The Red Queen" by Ridley book. It's premise is that evolution constantly improves a species, but since other species also are improving, the species runs and runs but stays in the same place.
It's the same thing in business. One has to relentlessly decrease the cost of doing business, because your competitors are doing it as well. You run and run and stay in the same place.
I haven't read the cited article, but the professor would need to show that industry profit margins are increasing to make his point. I haven't seen any evidence that margins increased in general.
Efficiency could mean creating more with the same labour, not creating the same amount with less labour.
Yes, it definitely can. That's sort of why I kept putting it in scarequotes. I am not skeptic of AI, fwiw. Mostly just our current crop of corpo/gov leadership and their views on what healthy economy looks like.
look all the commenters here... this is a lot of words with way too much intellectualizing.
tv and movies killed radio and opera. and now tiktok is killing tv and movies. it's not complicated.
You raise a good point, but I would like to add more nuance. Traditional TV is largely displaced by YouTube (small content creators) and streaming (Netflix, etc.) Traditional film has moved nearly entirely to streaming, but there is more of it now than ever before. TikTok is something truly generational to me. Just like Instagram largely killed the blog because it allowed normies to watch the amazing lives of the top 5%. TikTok allows young people (mostly women) to gossip faster than ever before.
The legacy media industry had a huge amount of fat and inefficiency, lots of people sitting around pretending to work. Joe Rogan produces a top podcast that pulls a larger audience than the vast majority of TV shows, and does everything with about 5 employees. Regardless of what you think of him personally or the podcast content, that is amazing efficiency. And he started it before LLMs were even a thing.
While I suspect you're not wrong about either inefficiency in large, well-funded media organziations or the efficiency of Rogan's operation, comparing his podcast to anything but a substantially similar TV show is hardly a fair comparison. Even a relatively low-budget scripted TV series is going to require a cast, writers, props, sets, costumes, hair and makeup, lighting, camera work, craft services, transportation, significantly more editing and postproduction, the list goes on, plus directors and producers and administrative personnel to manage all of this.
And that's exactly the point. It is unfair. TV shows and podcasts are both competing for the same audience, and yet the podcast can do it an order of magnitude cheaper.
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That's not necessarily an apples-to-apples comparison. The inputs for an unscripted podcast are vastly different from a scripted TV show. They're different mediums for expression, and each carries different costs.
I can’t speak to everyone, but grok bot is helping me gain so much efficiency in managing all of the things that I have going on in my life that I feel much more present now.
Before I’d always feel distracted by things weighing on me that I needed to get done. Now a huge load of those things are asked of grok bot quickly, then I close the laptop and go spend time where I should be.
It feels like it’s lifting a huge burden from my daily life.