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Disney is starting a new line of merchandise — but not in the way you’d expect.
The iconic entertainment company is investing $1 billion in Open AI and licensing its beloved characters to be used in images and short videos through ChatGPT and Sora, OpenAI’s text-to-video generator.
Instead of toys and backpacks, the merch is synthetic images and videos made by… anybody.
At first blush, Disney’s three-year deal might seem somewhat confusing in a number of ways, given what we’ve seen with OpenAI content partnerships.
As we noted with Reddit, the money the company received from its deal with OpenAI didn’t seem worth the potential damage and competition its content library would present on a more user-friendly platform.
But seen through the merchandising lens, the Disney deal makes far more sense. The underlying goal works the same as with the toys: to encourage fans to spend more time with Disney properties and get them excited about visiting theme parks, watching movies, and spending more money on Disney IP.
The stock market agrees.
Disney also gets some meaningful benefits from this deal, most notably hitching its wagon with its $1 billion stake to the key AI first-mover. (The company will also get access to OpenAI’s tools in the deal.)
To some, the alliance may present a confusing break from Disney’s long-term status as a highly curated predator-free safe haven from the cesspool of user-generated internet content, also known as UGC. Or, as most of it is called these days, AI slop.
But Disney signing this agreement may precisely guard its beloved characters from doing unspeakable things — or even interacting with other corporate IP — as OpenAI is actively committing to “responsible use” of the content.
Meanwhile, Disney ramped up its defense of its characters, sending a letter to Google demanding it stop using them in AI-generated content without permission.
At the same time, if someone does create something magical, Disney can feature it on its streaming service. Like the WiFi-enabled exercise bikes identifying hidden professional cycling talent or YouTube providing a pathway to Hollywood (or at least SNL), maybe this will furnish Pixar’s writers’ room.
But if there is one thing to be learned from the decades of industrial-scale experimentation in user-generated content, it’s that people will create very weird stuff.