Generative AI in Entertainment: Exploring the Potential and Economics of an AI-Generated Future

This year, the rising popularity of generative AI tools like Midjourney, ChatGPT, and ElevenLabs has sparked speculation about the future. With impeccable timing, Midjourney received an upgrade, and GPT's fourth iteration was released, both more powerful than their predecessors.

Now, a modified version of the GPT-4 model called AutoGPT is here. It can perform complex tasks with little to no user oversight by breaking them down into sub-tasks and working through them using the internet and other software that it can auto-download as needed.

AI shows no signs of slowing down, so it's best to understand everything about it sooner rather than later. Here, we take a deep dive into generative AI models, their potential use in entertainment, and the possible economics of an AI-generated entertainment industry.

Online Entertainment Today

First, let's understand the current landscape. With generative AI in its early stages, very few are monetizing its output, and many still look down on doing so. Instead, almost all online entertainment is created, coded, illustrated, animated, and managed by people who invest considerable time and creativity in getting their projects online.

In an era where most businesses need an online presence to succeed, there are entire online entertainment industries that exist solely on the internet, particularly in the realms of streaming and gaming. iGaming continues to thrive each year, with providers offering both proprietary and licensed games featuring appealing aesthetics and sophisticated streaming technology that allows some to be played in real-time, with human hosting and interaction. All these elements are showcased in games like "Crazy Time Live," demonstrating the features expected by typical, of-age consumers on the internet.

iGaming serves as an apt example to begin with, as it encompasses discussions around blockchain, digital assets, and metaverse technology, combining finance with social media and online entertainment, often within simulated worlds.

The Limits of Generative AI

Generative AI has been a game-changer in its relatively short existence. Trained using data from the internet, an AI model can replicate a wide variety of outputs from prompts, creating text, images, art, code, cloned voices, or even musical notes. This ability sets it apart from previous AI programs because generative AI produces content that appears fresh and unique to the human eye, not blatantly copied from someone else's work.

To us, it seems limitless because its scope often extends far beyond what we can perceive. However, certain projects like ChatGPT, Google's Bard, or Bing's headline-making chatbot confidently provide incorrect answers or experience existential meltdowns.

We have yet to determine the true limitations or expansiveness of generative AI. While it can demonstrate creativity in art, its creative output remains confined to the training data it draws upon, although to an extent that pleases most of us. Furthermore, it can demand significant computational power, limiting its individual usage. Additionally, there are ethical concerns and potential rights issues it may face if regulations are imposed.

Similar to blockchain applications, much of its appeal to supporters lies in eliminating intermediaries, making processes more efficient and cost-effective. It is estimated that by 2030, the AI media industry could be worth $99 billion as various sectors leverage this technology to enhance decision-making, marketing, and content production. Some theories even suggest that generative AI could raise global GDP by as much as 7%.

Valuing Personalization

As generative AI models advance and produce increasingly diverse output, they will become more capable of creating personalized media. With demonstrated abilities in basic coding, art creation, and voice cloning, it is speculated that the ability to generate individually tailored entertainment is not far off.

This raises an important question: If people could generate their own entertainment, how would it be valued? The likelihood is that the software and tools used to create content will become more important and more expensive to own if one desires the best results.

Once the legal framework surrounding AI is established, potentially with the assistance of digital proofing technology like blockchain, users can have rights to digital assets. This could include specific brand-related prompts and other copyrighted input that are then designated as digital assets, replicated across the internet when used, while also diverting a small royalty payment to the originator for each use if the content is monetized. Automatic royalty payments via smart contracts are already feasible when digital assets are bought and sold online, with a portion of the proceeds going back to the original creator.

From there, users can choose to keep generated content private or, more likely, share it in a public forum to be enjoyed and iterated upon by others, with the same royalty system in place. Prominent projects that are innovative and possess creative merit will rise to prominence, allowing their creators, whether they are studios or individuals, to earn from their work. While many assets and prompts could be designated as free-to-use, as we observe in fields like 3D rendering, the best content will be premium. In such a future, there will always be those who lack the knowledge or desire to generate their own content and will instead consume the work of others.

"Share Key" (CC BY 2.0) by CreditDebitPro

In a model like this, the democratization of content creation does not have to come at the expense of existing forms of entertainment. Instead, it can build upon them, offering expanded monetization opportunities. People will always want to share artistic expression with one another, so human-created art and entertainment will continue to hold appeal for quite some time.

If it wasn't evident enough, blockchain and digital proofing technology may be vital prerequisites before AI-generated entertainment can truly take off or become economically viable. Adoption of these technologies remains relatively low, but with nations around the world pursuing digital currency in today's tumultuous economic climate, we seem to be drawing closer to widespread adoption with each passing day.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes