August 1, 2023

AI’s Impending Impact on Film Finance

Courtesy of Freepik.com

Artificial Intelligence (“AI”) is rapidly changing storytelling and the film industry as a whole in a number of significant ways; film finance is no exception. The use of AI in the film and television industry is a major catalyst of the current Writer’s Guild of America and the Screen Actors Guild strikes. Today, AI is being used by production companies to automate tasks such as script analysis, casting, and budgeting, and we can anticipate that this automation will soon impact how films are financed.

Consider the following ways in which AI will likely be used in the financing of films:

• Increased efficiency: AI can automate many of the time-consuming tasks involved in film finance, such as researching potential investors, preparing financial projections, and managing deal flow. This could free up human resources to focus on more strategic activities, such as the building of relationships with current and/or new producers and identifying new investment opportunities.

• New opportunities for financing: AI could open up new opportunities for financing films, such as crowdfunding and peer-to-peer lending. These alternative forms of financing could make it easier for independent filmmakers to get their projects off the ground.

• Improved risk assessment: AI can be used to analyze vast amounts of data, including historical box office figures, audience demographics, and social media trends, to help investors assess the risk of a particular film project. This could lead to more informed investment decisions and a reduction in the number of risky films that are financed.

There are obvious negatives associated with use of so much automation. For example, AI algorithms can be biased, leading to unfair decisions about which projects to be financed. Additionally, AI could make it easier for fraudulent producers to target investors by creating fake financial projections or for by impersonating legitimate investors.

Overall, the impact of AI on film finance will be noteworthy and likely to be unprecedented. AI has the potential to improve the efficiency, accuracy and risk assessment of investment in film and television projects. However, we must all be aware of the potential pitfalls and challenges associated with its use.

Talk soon!