The Prof G Pod with Scott Galloway - No Mercy / No Malice: The End of the Blockbuster

Episode Date: September 27, 2025

As read by George Hahn. https://www.profgalloway.com/the-end-of-the-blockbuster/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for the show comes from Sacks Fifth Avenue. Sacks Fifth Avenue makes it easy to shop for your personal style. Follow us here, and you can invest in some new arrivals that you'll want to wear again and again, like a relaxed prodder blazer and Gucci loafers, which can take you from work to the weekend. Shopping from Sacks feels totally customized, from the in-store stylist to a visit to sacks.com, where they can show you things that fit your style and taste. They'll even let you know when arrivals from your favorite designers are in, or when that Brinella Cuccinelli sweater you've been eyeing is back in stock.

So, if you're like me and you need shopping to be personalized and easy, head to Saks Fifth Avenue for the best follow rivals and style inspiration. Support for the show comes from LinkedIn. It's a shame when the best B2B marketing gets wasted on the wrong audience. When you want to reach the right professionals, you can use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers according to their data. That's why LinkedIn ads boast one of the highest B2B return on ad spend of all online ad networks. $250 on your first campaign on LinkedIn ads and get a free $250 credit for the next one. Just go to LinkedIn.com slash proff.

That's LinkedIn.com slash prof. Terms and conditions apply. As a sports fan, you want the best way to watch your favorite teams at home. And now, you can experience game day in all its glory with a Samsung TV. Right now, buy an eligible Samsung glare-free TV and get one year of ESPN Unlimited for free. Through October 23rd, not valid for existing ESPN select ESPN Unlimited or Disney Plus Hulu ESPN Bundle subscribers. At Samsung or Best Buy Samsung Glarfree TV and get 12 months of ESPN Unlimited standalone service. Additional terms apply. See Samsung.com slash sports TVs and stream.esp.com.

I'm Scott Galloway and this is no mercy, no malice. Riding an AI wave, the Ellisons are poised to shake up Hollywood. Movie budgets of $200 million and 3,000 crew members may soon be coming to an end. The end of the blockbuster, as read by George Hahn. For David and Larry Ellison, the credits of the Fantastic Four First Steps are the best part of the film. Specifically, they are the opportunity.

The scrolling list of more than 3,000 cast and crew members is a sign of an industry ripe for disruption. The Marvel movie's staff, from visual effects artists and animators to costume designers and location scouts, is bigger than the entire workforce of Lyft or Reddit. The Ellison's, who are now one of the most powerful media and entertainment families in history, are the kid in the sixth sense. They see dead people. They don't care if Hollywood is ready for AI. AI is ready for Hollywood. David Ellison, the Silicon Valley Scion, who bought Paramount Global with a sliver of his father's $349 billion fortune and is now pursuing a much bigger bid to acquire Warner Brothers, is keen to drive the AI transformation.

Buying Warner would combine two of the most storied movie studios and two major streaming services, Paramount Plus and HBO Max. A deal announced by the White House gives Larry Ellison's tech company, Oracle, a stake in the new American TikTok, along with oversight of the app's algorithm for U.S. users. It also endows the family with more influence on our youth than anybody who doesn't live in the same home. And their bond with President Trump means they're unlikely to face any resistance. On day one as CEO of Paramount, David Ellison outlined his vision to shake up the company, by investing in high-quality storytelling and cutting-edge technology. Adorable. He tried to assuage Hollywood's concerns and barely mentioned AI.

Technology is not and never will be a replacement for human creativity, he said. Rather, it serves as a powerful multiplier. I wonder if lions sitting in the reeds, identifying their next, meal. Think of themselves as powerful multipliers. In the 50 days since he took over, Ellison has gone on a spending spree, providing some hope to a nervous Hollywood. Paramount won an auction for the big-screen reunion of Timothy Salomey and James Mangold, the star and director of the Bob Dylan movie A Complete Unknown, and lured the Stranger Things creators from Netflix with the promise of delivering large-scale theatrical films.

The company also plans to expand its annual movie output to 20 films from eight. Veteran producer Lorenzo de Bonaventura told the New York Times that Ellison wants to do cool stuff. That sounds very basic, but underneath it all, making cool stuff is the Hollywood dream. Spoiler alert, don't count on a feel-good Hollywood ending for many or most of the crew members whose names appear in the credits of the Fantastic Four and other blockbusters. In his wider bid to take on Netflix and YouTube, Ellison is aiming for at least $2 billion in cost efficiencies and synergies, Latin for layoffs.

The upshot will probably be as many as 3,000 job cuts. Every surviving studio owner will rely on AI, which is reinventing the way movies are made to generate content more quickly and cheaply. But David Ellison isn't just any studio boss. His father, the Oracle co-founder, who briefly surpassed Musk this month to become the world's richest man,

is riding an AI tsunami with a staggering $455 billion pipeline of contracts to supply computing power. Paramount's new CEO who envisions a next-generation studio that leverages cloud computing, AI, and other digital tools, likely won't waste any time in tackling Hollywood's bloat. As Jerry Cardinal, whose Redbird Capital helped finance the $8 billion Paramount deal,

explained, this is not a nice to have. This is a need-to-have moment in Hollywood. You have a balkanized situation between technology and content, between Silicon Valley and Hollywood. Ellison isn't just motivated by the fact that the attendees are much hotter at Cannes Lyons than Dreamforce. With access to a seemingly infinite pool of capital, he sees an opportunity to meld the best of the tech and entertainment worlds. The younger Ellison will rely on former Oracle CEO Safra Katz and Scale AI Chief Financial Officer Dennis Chenelli, both now Paramount. board members, as well as former Meta and Google executive Dane Glasgow, who will lead product, vision, and strategy. We know the script. First comes consolidation, then comes efficiencies. It won't be long before the younger Ellison is spotted helming a tank division headed over the

Sepulveda Pass with AI-guided projectiles. As they expand their empire, they'll brainstorm ways they can deploy AI to make three movies at $40 million a piece, or maybe 10 movies at $10 million a pop, instead of going all in and producing a blockbuster such as the Fantastic Four for more than $200 million. Taking more shots on goal is a better approach, given the risk complexion of a hit-driven culture. Yes, Beetlejuice, Beetlejuice made hundreds of millions of dollars, but the studio gave that windfall back with joke Foli Adieu, which lost about $150 million. In Hollywood, AI is often cast as the villain, whether that's on-screen, in movies ranging from 1984 as The Terminator to the latest Mission Impossible installments, or in real life.

In 2023, writers and actors went on strike and shut down the business for several months, demanding protection from AI. In exchange for losing five, months of their careers, WGA members got dick. And when I say dick, I mean almost nothing. Almost nothing includes increases in compensation that lag inflation and illusory protections from AI. Their fears are well-founded as the studios begin to apply gen AI to visual effects, sound mixing, editing, production, and script writing in search of efficiencies. A recent study, surveying 300 leaders across the entertainment industry, estimated that AI will affect more than 200,000 jobs over three years, especially roles in visual effects in post-production, which focus on editing and finalizing content. In the lead-up to the Oscars earlier this year,

the Brutalist and Emilia Perez ignited controversy over their use of AI to enhance actors' voices, even with their blessing. But it's not that simple. Where some see an existential threat, others see innovation, an opportunity to lower the barriers to entry and democratize a field once reserved for the Hollywood elite and their offspring. Consider the multiple ways AI is already shaking up the industry. The Tom Hanks and Robin Wright movie here used metaphysics aging and de-aging technology to follow their characters over different stages of their lives. Studios otherwise would have hired multiple

actors, relied on makeup artists, or used a small army of VFX artists at a cost of tens of millions of dollars. An increasing reliance on tools such as TruSync, which can manipulate the movement of performers' lips to accommodate dubbing in different languages, is expected to lower demand for multilingual voice actors. Actor and filmmaker Tyler Perry put an $800 million studio expansion on hold after seeing Open AIs SORA and realizing he might not have to travel to locations or build sets. Even if SORA, which generates short video clips based on written prompts, isn't yet good enough for Hollywood Studios, it's just a matter of time.

With Luma AI's latest tool, according to the L.A. Times, a hoodie becomes a superhero cape, a sunny street turns snowy, a person transforms into a walking banana or a medieval night, no green screen, no VFX team, no code. The directors of Marvel's Avengers Endgame planned to build a high-tech studio and craft AI tools to make films with smaller budgets. If they're successful, AI will be used to empower artists rather than displace them. Jeffrey Katzenberg, who founded DreamWorks with Stephen Spielberg and David Geffen more than three decades ago,

captured the industry's attention in 2023 when he predicted that AI could cut the cost of animated films by 90%. Katzenberg is familiar with technological shocks. He was a pioneer in the animation revolution in the 1990s sparked by the advent of computer graphics and the success of Pixar's Toy Story. Today, he sees promise amid the tumult, with AI accelerating a new wave of storytelling innovation. He told Bloomberg,

I don't believe it's the end of Hollywood. Will it function the way it has in the past? Absolutely not. Now Pixar is the one feeling the heat. Open AI and Vertigo films plan to wrap an AI-driven animated feature called Critters after nine months of production in time for the Cannes Film Festival in May.

Only a couple dozen people are working on it, and the budget is less than 30 minutes. million dollars, 80% cheaper than a typical animated movie. History is clear. Technological breakthroughs create short-term disruption and painful job losses, but also unleash lower production costs, creative ideas, bold new businesses, and, over the long term, a net increase in employment. In the car industry, automation destroyed jobs.

on the factory floor, but we didn't envision the new jobs that building heated seats and car stereos would create down the road. In 1999, the average cost of developing and launching an e-commerce site was $1 million. Today, you can set up a decent website for around $5,000. Your investment is 99.5% less, and you're entering a market that's more than 40 times bigger. Hollywood will follow a similar path as AI opens the door to independent filmmakers.

You won't need tens of millions of dollars and Hollywood connections to produce a movie of theatrical quality. Then Affleck is right. AI will make it easier for outsiders with compelling scripts to produce the next goodwill hunting. AI has become the ozempic of the corporate world.

While GLP1 medicines switch off the signal in your brain that you need to eat more, AI suppresses the appetite to hire more, reducing companies' cravings for the protein of human capital. Hollywood is no different. AI will create new roles and elevate the careers of those who learn to leverage it successfully, but jobs will vanish. The collision between Hollywood and Silicon Valley signals the end of the blockbuster and the industry as we know it.

Disney's Bob Iger and Warner's David Zasloff will be out within 12 to 24 months, as their affinity for and relationship with, the creative community is quaint and outdated. They grew up in an era when talent held the power. Their job was to not piss off people. The Ellison's, like the Honey Badger, don't give a shit. The younger Ellison wants to bring the best of Southern and Northern California together. In this case, the togetherness is Northern California invading the city of angels.

Like most wars, the battle is over before it starts, based on which side has more brute force. Picture Eiger, Zazlob, Sag Aftera, and 50 plus percent of the creative community hunkering down behind Chateau, Marmaw, armed with squirt guns. Life is so rich. Life is so rich. Support for this show comes from Icy Hot. It feels great to work up a burn during a workout, but the achy joints and muscles you get after the fact. That's the kind of pain.

that can hold you back. But not anymore with icy hot nighttime recovery. Experience powerful, fast-acting pain relief with icy hot nighttime recovery and its blend of soothing fragrances that'll help you before bed. Ice works fast and heat makes it last. Tomorrow's comeback starts tonight. So you can wake up thinking I'm so back. Buy icy hot nighttime recovery, no mess now. Support for this show comes from OnePassword. If you're an IT or security pro, managing devices, identities, and applications can feel overwhelming and risky. Trellica by OnePassword helps conquer SaaS sprawl and Shadow IT by discovering every app your team uses, managed or not. Take the first step to better security for your team.

Learn more at OnePassword.com slash podcast offer. That's OnePassword.com slash podcast offer. All lowercase. Most AI coding tools generate sloppy code that doesn't understand your setup. Warp is different. Warp understands your machine, stack, and codebase. It's built for the entire software lifecycle from prompt to production. With the powers of a terminal and the interactivity of an IDE,

warp gives you a tight feedback loop with agents so you can prompt, review, edit, and ship production-ready code. trusted by over 600,000 developers, including 56% of the Fortune 500. Try Warp free or unlock Pro for just $5 at warp.dev slash top code.