The Asymmetry of Risk: AI's Impending Impact on Entertainment

I love LA. I was born there, have moved back multiple times, and built the foundation of my career and relationships in LA. I'm constantly pulled back there. Call it manifest destiny or "Bay Cities Italian deli" sandwiches (same thing in my mind).

When I started my company Basa, focused on AI in entertainment, I assumed LA would be the natural home. After all, at its best to me Hollywood is synonymous with innovation and creative risk-taking in storytelling and creativity.

But something unexpected happened during my conversations in LA. Instead of the enthusiasm for cutting-edge technology, I encountered a more cautious approach to AI. An almost self-imposed governor on progress driven more by emotional and fear-driven constraints than practical ones.

Conversely, New York - a city I never could imagine living in - resonated more with my vision for AI in entertainment. The contrast was striking: while LA seemed focused on protecting its creative legacy, New York appeared ready to explore AI's possibilities, albeit with a keen eye on the bottom line.

This stark difference in attitudes towards AI between these two entertainment hubs sparked my curiosity. It led me to dive deeper into understanding why such a divide exists and what it might mean for the future of our industry. As I explored this topic further, I began to see a broader pattern of risk and opportunity that extends far beyond just these two cities.

I don't claim to have all the answers, but after months of research and countless conversations with industry professionals, I've come to realize that there's a crucial question we need to explore: Is there an asymmetry of risk between embracing AI and dismissing it? And if such an asymmetry exists, why isn't it driving more proactive behavior in our industry?

The Asymmetry of Risk

At the heart of this issue lies a profound asymmetry of risk between embracing new technology and dismissing it. If we fully engage with AI and its impact on our industry turns out to be less transformative than anticipated, what have we lost? Some time, some resources, perhaps a few missteps along the way. But in return, we gain invaluable insights, develop new skills, and position ourselves at the forefront of technological advancement.

Now, consider the flip side. If we choose to dismiss AI, to stick with our traditional methods, and AI goes on to fundamentally transform the entertainment landscape, the consequences could be dire. We risk becoming obsolete, unable to compete in a radically changed industry. We could find ourselves scrambling to catch up, our once-leading companies reduced to footnotes in the history of entertainment, much like Kodak in the wake of the digital photography revolution.

This asymmetry of risk isn't unique to AI. We've seen it play out before with the rise of digital technology in film, the advent of streaming in television, and the emergence of social media in marketing. In each case, early adopters reaped enormous benefits, while those who clung to the status quo found themselves scrambling to catch up, often too late to reclaim their former prominence.

The Tale of Two Studios: A Glimpse into Possible Futures

To bring this asymmetry to life, let's imagine two fictional studios: Innovate Pictures and Tradition Films. Both are facing the same decision: whether to invest heavily in AI technology for their upcoming slate of productions.

Innovate Pictures decides to take the plunge. They allocate a significant portion of their budget to integrating AI tools into their workflow, from scriptwriting assistance to visual effects creation. It's a risky move - the technology is new, and there's no guarantee of success. They face initial setbacks, struggle to integrate the new technology with their existing processes, and weather criticism from industry traditionalists.

Tradition Films, on the other hand, chooses to stick with their tried-and-true methods. They reason that they've been successful for decades without AI, so why change now? They continue to produce films the way they always have, relying on human creativity at every stage of the process.

Fast forward five years. AI has indeed transformed the industry, though perhaps not in the ways everyone expected. Innovate Pictures, after its early struggles, is now at the forefront of a creative renaissance. They're producing content faster, cheaper, and at a higher quality than ever before. Their AI-assisted scriptwriting process has led to more diverse and original stories, as writers are able to explore countless narrative possibilities in a fraction of the time. Their visual effects, enhanced by AI, are pushing the boundaries of what's possible on screen.

More importantly, Innovate Pictures has discovered entirely new forms of interactive storytelling that were previously impossible. They've created immersive, personalized viewing experiences that adapt in real-time to audience reactions. Their content is not just watched; it's experienced in ways that have redefined entertainment.

Tradition Films, in contrast, finds itself in an increasingly precarious position. Their production costs are significantly higher than their AI-enabled competitors. They're struggling to keep up with the demand for content in a world where AI-assisted creation has dramatically increased output. Worst of all, they're years behind in understanding and implementing the technology that's now industry standard.

But let's consider an alternative scenario. What if AI doesn't transform the industry as dramatically as anticipated? In this case, Innovate Pictures has "wasted" some resources on technology they don't fully utilize. However, they've likely still gained efficiencies and insights from their experiments. They've positioned themselves as forward-thinking and innovative, which has value in itself. They've developed a culture of embracing change and technological advancement, which will serve them well regardless of which specific technologies end up being transformative.

Tradition Films, in this scenario, has maintained stability. They've avoided the disruption and potential missteps of adopting new technology. But they've also missed out on potential efficiencies and innovations, even if they're not industry-changing. They've reinforced a culture resistant to change, which could leave them vulnerable to future disruptions.

The asymmetry here is clear. The downside of embracing AI is limited and manageable. The downside of dismissing it could be existential.

The Personal Stakes: Seizing a Career-Defining Moment

This is a pivotal moment for individual careers as well as companies. How often in our professional lives do we encounter a technological shift so profound that simply embracing it early can set the foundation for the rest of our careers? These moments are rare, and AI represents one of them.

I was too young to fully recognize or capitalize on the rise of the internet and Web 2.0. But I watched as companies like Google and Amazon grew from tiny startups to global behemoths. We tend to mythologize their founders now, but at the time, they were just smart, driven individuals who recognized the potential of a new technology before others did.

The environment they started in wasn't that different from what we're facing now with AI. The majority of people and businesses were not prepared to disrupt their status quo, creating a unique opportunity for those willing to take action.

We saw it again with social media. Those who embraced platforms like Facebook, Twitter, and TikTok early on - both as individuals and businesses - gained advantages that latecomers struggled to match.

AI stands to be as big an opportunity as these previous shifts, if not bigger. By accepting today what most will be forced to accept in a couple of years, we have the chance to differentiate ourselves, our organizations, and our industries in ways that may not come again in our lifetimes.

The Psychology of Resistance: Understanding Our Biases

Given these realities, why is there still so much hesitation about AI in some quarters of our industry? To understand this, we need to examine our psychological biases.

There's a concept in psychology called the "status quo bias." It's our tendency to prefer things as they are. In the face of change, we often overvalue the current state of affairs and undervalue potential improvements. I've heard many industry veterans say, "We've always done it this way, and it works." But in rapidly changing industries, this bias can be limiting.

This bias is often driven by loss aversion - our tendency to feel the pain of potential losses more acutely than the pleasure of potential gains. In the context of AI, this means we're likely to focus more on the potential downsides (like job displacement) than on the potential upsides (like new creative possibilities and revenue streams).

We also tend to overvalue information that's readily available to us - our recent experiences, the current state of the industry, the way things have "always been done." This availability bias makes it difficult for us to imagine or prepare for significant changes. A studio executive might say, "AI can't create a hit show," basing this on current AI limitations rather than its potential.

These biases aren't just abstract concepts - history tells us they drive real decisions in our industry right now. Talented professionals might dismiss AI because it doesn't fit their current understanding of creativity or out of fear of short-term disruptions, potentially setting themselves up for long-term challenges.

However, in rapidly changing industries, these biases can be dangerous. They can lead us to underestimate the risks of inaction and overestimate the risks of change.

Beyond AI and Entertainment: A Lesson from Climate Change

To further illustrate the concept of asymmetrical risk, let's consider a parallel with climate change. Imagine a Thanksgiving dinner conversation with a climate change skeptic. You propose a thought experiment: What if we take action on climate change, investing in renewable energy and reducing emissions, but climate change turns out to be less severe than predicted? We've invested in new technologies, reduced pollution, and decreased our dependence on finite resources. We might have spent some money and effort, but we've likely created new industries and jobs in the process.

Now, consider the alternative. We do nothing, assuming climate change isn't a threat. If we're wrong, and climate change is as severe as scientists predict, we face potentially catastrophic consequences: rising sea levels, extreme weather events, food shortages, and economic disruption on a global scale.

When we compare these outcomes, the asymmetry of risk becomes clear. The downside of action is limited and potentially beneficial in other ways, while the downside of inaction could be existential.

Moreover, if America takes the lead in developing green technologies, we position ourselves as leaders in a growing global market. We create jobs, drive innovation, and maintain our competitive edge on the world stage. On the other hand, if we do nothing while other countries invest heavily in these technologies, we risk falling behind and becoming dependent on other nations for crucial energy technologies.

This climate change analogy illustrates the concept of asymmetrical risk that we're facing with AI in the entertainment industry. Just as with climate change, the potential downsides of embracing AI (wasted resources, some failed experiments) pale in comparison to the risks of ignoring it (industry-wide obsolescence, loss of global cultural influence).

Navigating the Uncertain Future of Entertainment

The challenge we face isn't as simple as whether to embrace or ignore AI. The real struggle is against our own ingrained biases and the natural human tendency to resist change. We're all susceptible to the status quo bias, the comforting belief that "I'll be okay" even as the world changes around us. This fight, flight, or freeze response is deeply rooted in our psychology, a protective mechanism that has served us well in many contexts but can be dangerously limiting in times of rapid technological change.

The truth is, we can't know with certainty what the future holds. But we can learn from history, understand our own biases, and make informed decisions based on the best information available to us. I believe the risks of dismissing AI in creative industries far outweigh the risks of embracing it - not because AI is guaranteed to revolutionize everything, but because the cost of being left behind if it does is so much greater than the cost of exploring and adapting even if it doesn't.

To combat these biases and make value-based decisions, we need to ask ourselves hard questions: Am I resisting this change because it truly doesn't have potential, or because it challenges my current way of working? If I'm worried about job loss, is fighting to maintain the status quo really the best defense? Or am I potentially hastening my own irrelevance? What would it look like if I embraced this technology? What new opportunities might it open up? How can I use my industry expertise to shape the development and implementation of AI in a way that enhances rather than replaces human creativity?

Job loss is indeed a real and valid concern. But history has shown us time and again that fighting technological change is a losing battle. Instead of expending all our energy trying to hold back the tide, we need to channel some of that passion and creativity into finding ways to ride the wave.

This doesn't mean abandoning everything we know and love about our industry. Far from it. It means leveraging our deep understanding of storytelling, our artistic sensibilities, and our human insight to guide the development of AI in entertainment. It means being at the forefront of defining ethical guidelines, shaping new creative processes, and imagining new forms of storytelling that blend the best of human creativity with the capabilities of AI.

Shaping Our Future

The path forward isn't about blind adoption or stubborn resistance. It's about thoughtful exploration, continuous learning, and proactive engagement. It's about recognizing that while we can't control the development of technology, we can absolutely be on the frontier of driving how it's used to lift our industry.

The upside of embracing AI extends far beyond mere survival. It offers the potential to enhance our creativity, increase efficiency in production, develop new forms of interactive entertainment, reach wider audiences, and create entirely new job roles at the intersection of technology and creativity. By actively engaging with AI, we position ourselves to shape its integration into our industry, ensuring that it enhances rather than replaces human creativity.

Ten years from now, do you want to be one of the pioneers who helped shape the technological transformation in entertainment? Or do you want to be struggling to adapt to a landscape you had no hand in creating?

The question isn't simply whether you should embrace AI. The question is: How will you use your unique skills, your creative vision, and your industry knowledge to help shape the future of entertainment in an AI-augmented world?

The future of our industry isn't predetermined. It will be shaped by the choices we make now, by our willingness to step into the unknown and create something new. This moment is challenging, uncertain, and yes, even frightening. But it's also brimming with possibility. Let's seize this opportunity to ensure that the future of entertainment is one where technology enhances rather than replaces human creativity, where new tools open up new realms of storytelling, and where our industry continues to push the boundaries of what's possible.

The greatest risk isn't in embracing change - it's in believing we can remain unchanged in a changing world. The potential rewards of thoughtful engagement with AI far outweigh the risks of cautious exploration. Let's face this future head-on, with open minds, creative spirits, and a determination to shape the next era of entertainment. The question isn't whether we should embrace AI, but how we can harness its potential to elevate our industry and our own creative capacities.