VFX is a type of knowledge work. Generative AI revolution will impact all knowledge work. Each engineer/VFX artist’s productivity goes up 10x, thought another way, companies either need 10x lower engineers or need to do 10x more output to justify having that many engineers/VFX artists. Think about it from any company’s perspective. They would try to leverage existing staff for higher/faster growth. Execution times would go down. More movies would release every year.
But the most likely outcome is something in middle, each engineer/artist does 3x more work but companies need 3x fewer engineers/artists. This is going to be hugely disruptive. At same time, the need for a VFX company does not go away. Rather, VFX becomes central to the movie. Rather than VFX being a way to enhance a movie, each movie would become an animation movie with reality level graphics in each movie. Most large tech studios would want to build these capabilities in-house, the likes of disney, marvel, DC. Even red chilli entertainment would build this capability in-house using red chilli VFX. But just imagine, would each production house be in a position to do same. Is it the core competence for production houses like KJR, Karan johar, yash raj to deploy cutting edge AI/ML technologies? I dont think it is. The question of what to outsource & what to do in-house would critically define different types of production houses.
Two things are for sure imo:
- Entry barrier for long format entertainment targetted creative videos goes down dramatically. we would have an explosion of movies & long format videos. You could make a movie, i could make a movie, each of us could create our own production houses, create movies with generative AI & distribute it on YouTube.
- Imagine yash raj studios licensing SRK’s digital avatar for 50 cr & then spending about 10cr on VFX and boom they have a 60cr pre-distribution SRK movie made. No more fancy shooting locations, no more studios, everything is rendered from the script as video by GenAI models.
Disclaimer: recently sold out, following balance sheet deterioration in Sep-23 but watching this space very closely. (management didnt walk the talk on other current asset & receivables reduction).
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