Episode 12: Charting the Future in Hollywood, AI, and the Digital Era with Former Showtime Execut...

Welcome to the Entertainment Business Podcast. I'm your host, Tisha Morris. Join me as we go inside the entertainment industry of film, TV, books, music, and all content creation, where we'll weave together the creative and business of entertainment with practical tips, inspirational interviews, and insider information of all the latest trends. And with that, let's get on with the show.

Hello and welcome to The Entertainment Business Podcast. I'm your host, Tisha Morris, and thank you so much for tuning in. I'm really, really excited about today's episode. Now, if you've been keeping up with the entertainment industry at all, then you obviously know that AI is so huge and no one knows where it's going. And there is a lot of fear and a lot of excitement and a lot of unknowns around it. And so Between that and the streamers, the studios, what's going on with all the mergers? Where is this all headed? Well, my guest today is going to shine some light. He is an industry leader. He was part of the advent of the streaming world. My guest is Rob Rosenberg. He is the founder now of Telluride Legal Strategies. He was a former executive vice president and general counsel of Showtime. He spent 22 years at Showtime where he oversaw all legal affairs, including distribution, intellectual property, litigation, contracts, and regulatory matters. During his time there, he helped develop the roadmap and execution of the company's vision for new media platforms and played a pivotal role in developing and executing Showtime's strategic vision for streaming content. He negotiated high-profile deals with industry players such as Apple, Amazon, Comcast, and significantly enhance Showtime's presence in the digital marketplace. And we know that is no small feat. All right. Rob now runs the New York-based consulting firm Telluride Legal Strategies, where he consults with companies. Now, you may have seen Rob on news outlets such as The Hollywood Reporter, The Mirror, Forbes, uh, for his expertise on high-profile cases involving Hollywood. And recent trends. But today we have the honor and pleasure of having Rob right here to discuss all the latest trends in Hollywood and AI. Welcome, Rob.

Thanks so much. Thanks for having me.

I am so excited to have you as a guest because there are so many changes happening in the entertainment space in Hollywood, and you are just the person to help us unpack all of it. I'd love to start out with Where are we with streaming now? You played a major role at all stages of the streaming era. You were in the visioning stage, the implementation stage, through the streaming wars and peak TV. First off, do you— is it all you thought it would be? And secondly, what do you see as the next phase for streaming?

Yeah, I mean, I think there— it's still a work in progress. I think the there have been some false moves and some bad moves. So when people started in the streaming business, I think that there was such an interest in making sure that there was enough content for people to consume that I think people overspent and overdeveloped. So I think that, you know, do you need a new show a week like a Netflix? I would argue that you probably don't. You know, yes, it's great to have as long as they're all good and they're all the same quality. And I don't know that we actually got there. So I think there's still a culling phase. I mean, the other topic, of course, that's huge is profitability. And I think that because of the fact that people overdeveloped, overproduced, that they had huge problems with turning a profit from their streaming product. You know, obviously also consumer prices were started out low and now they've been steadily rising because of this drive toward profitability.

Yeah, I just saw an article just minutes ago that Netflix is planning its next price increase. So yeah, now, you know, Showtime, which you were a part of for a long time, and HBO were kind of the forerunners of this non-traditional, you know, net work TV model where you, you know, pay without the ads, be paid for, pay for TV without the ads. And, and it was kind of the beginning, beginning of all of it. And now we're seeing the ads come back. Do you see this as a new trend based on what you just said about, you know, the profitability being an issue?

Yeah, I think, you know, if you're looking backwards for a moment, I think if you look at the content of an HBO, of a Showtime, Part of the decision early on to be a non-commercial service was because it gave them freedom to exhibit content and tell certain stories that if you were reliant on an advertiser ponying up dollars to sponsor a particular program, you might not be able to get a sponsor for that program. So, you know, there, there's was obviously things around profanity and nudity and and different types of stories and relationships that were shown earliest on an HBO and a Showtime that were not shown on network television for a long time because of that issue.

Oh yeah, that's a really good point. And just the consumer preference. I mean, in a drama, the last thing you want is a potato chip commercial right as like a big moment's happening. Whereas a comedy, I've noticed I'm more like, okay, yeah, I can pause and go get some from the refrigerator. So I can see how the different types of content are more suitable for commercial or non-commercial. Yeah, that's a really good point.

I don't think people enjoy being interrupted regardless of what— I think that people agreed it was part of the social contract. You know, I've I don't have to pay for this broadcast television as long as I'm willing to sit through the occasional potato chip commercial. So I think that, you know, that was all understood. I think, you know, now that we've seen models and others have come out with ad-free models, consumers are a little— were a little frustrated when, you know, ad-supported models were introduced. And now you have to pay an extra few bucks if you want the ad-free model. But, you know, again, in that case, it's this drive toward profitability and how do you make money off of a streaming business. And one of the ways of doing that is either you need ads to help support those costs or you're going to have to charge people more.

Yeah. Yeah. One of the new profit-seeking methods is live live TV with streaming. We've seen live sports being a big licensing grab for the streamers. And there was a recent report that Amazon Prime is in talks with— I think it's Brian Williams— about striking a deal for news, casting news for the election. So it was the first time I've heard new live news being a part of a potential plan. What do you think about— any thoughts on— well, I'm a fan of live sports. It was like obviously the last thing that the networks had that the streamers didn't. So that's coming on board. And now with live news, where do you see this going?

I mean, I actually like it as you're saying it. I mean, I'm sitting here saying to myself, well, isn't news normally live? I mean, I think getting 2-day-old news is not very helpful unless it's magazine-type show or something where they're doing a long-form coverage of a particular— so, you know, I do think news is one area that probably, you know, we're accustomed to viewing it live. And so that part doesn't surprise me. I guess the question is just, is it compelling enough to get people to tune in for it? I think that the drive toward sports rights is because it's been shown time and time again that sports will get people to show up at this time on this particular service because they want to watch their team. And, and I think I'm trying to remember, but something like, you know, 90 of the top 100 telecasts of last year were sports-related programming. And, and I think that it's that drive to watch something as it's unfolding.

Yeah, I agree. And I think it's also part of streamers pulling back on creating original content is because they're finding that sports, which I think is just become even bigger as we move into the AI tech era. And I want to get into that in a lot more detail, but I think we're going to see the polarity of people really enjoying even more live people doing live things in real time. And sports is one of those places where you can't be replaced, at least on the field. You can on a screen, but you can't on the field with, with AI. So I think it will be an even more compelling space as, as we move more into the digital age.

Yeah. And I guess, you know, if you think about other types of live programming, I think it really has to matter what the subject is for it to have the same kind of pull as live sports or live news. I think the networks have done some experimenting with live theater. I think there was like Grease Live and there was Sound of Music Live and stuff. And it was more the novelty of it than the eventizing of it. But did those things really need to be live? Probably not. They meant— It was, it was an interesting experiment, but I'm not sure that if it became the norm that, that people would be, you know, oh, I've got to get home by 8 o'clock tonight. So I can—

Although awards shows, that's like the last thing that's like the— which they have started to come on onto the streamers more, but that's the one area where I have to go to my friend's house who has cable. So I want to Speaking of different areas and genres and bringing different aspects into TV and movies, I want to talk about gaming. Now, I did a 2024 predictions in January, and gaming was at the top of my list of games to screen. And I think we've only just tipped the iceberg of where we see the gaming space going. Now we're seeing not only games to screen, but screens to games. Where do you— I know you kind of have a— you've talked a lot about gaming and as far as movies, where do you think this is going?

Yeah, I mean, I think it's funny. I think we've seen movies to gaming a lot because I think game companies are often looking for intellectual property that they can exploit and, you know, expand the franchise, cater to big fans of of a particular intellectual property. But I think the games to TV, the games to movies, yes, we have seen that over time. We continue to see it. And I think it is the kind of thing that the game companies are very careful about. They are, you know, when you think about a successful TV show, TV show based on a game, you know, yes, it can bring in millions of dollars to a gaming company. But when you think about their properties, their gaming, original gaming properties are worth billions to those same companies. And it is the crown jewels. They do not want to do anything that's going to turn people off, turn people away. So, you know, when they're contemplating these types of properties, they're really careful about weighing, can I cater to the fan base? Can I bring new people into the franchise? But can I also do this where if the thing is a total flop, you know, total flop, and am I going to turn people away and sour the name of my property here? So I do think they are— they continue to be very cautious. I think We've seen some successes recently with like The Last of Us. I, you know, I didn't even know it was a video game before the TV show came on. So it wasn't until my 26-year-old son told me that I realized that that was the case. But to me, that was just a new show, a new concept. And I learned later that it derived from a game originally.

Yeah, I know, same. The gaming world is not really my world, but, but what I find is interesting is that I know at least Netflix— I can't speak for other companies or studios— are actually making games out of things that are not, in my mind, typically gaming type things. Like there's a game for Virgin River and a game for Emily in Paris. These more, you know, what I would think more games that are geared toward, toward women and girls, which— so I'm loving it. As you know, you're an attorney, I'm an attorney. Sometimes I think games can be a subsidiary right that we easily put in, keep in the agreement just with, you know, all the other things. But do you see that being something that should be more carefully negotiated?

I definitely think, I mean, depending upon who owns the underlying IP, you know, certainly it's worth holding onto in the event that something becomes a big hit. But again, like you said, there are certain properties that they exploit in games basically to cater to the fan base. But at Showtime, we had been Dexter, which was a huge show for us and a huge property. And we did create some video games based on that. But were they huge hits? They were popular among fans of the show, but it wasn't like it necessarily broadened, um, broadened the fan base for them.

Right. Um, okay. So I want to turn to AI. I know this is an area that you have a lot of expertise and interest in yourself. Now I've been watching it pretty carefully and I've seen, you know, the book publishing industry through the Authors Guild and authors. They, they've, they've, they, there's a lot of pending suits by them against OpenAI and all the big big generative AI companies. You have record labels. They have, they have their suits pending as well. And the only industry, entertainment, we haven't seen suits from are the entertainment industry, the studios, production companies. I've been thinking that's odd until I saw that Lionsgate deal that where they are partnering with a company named Runway for Runway to go through their library and basically see what they can do with it through an AI lens. So I'm beginning to think that Hollywood is leaning more into the AI space than like maybe they're starting to show their cards of really leaning into it. I don't know. What do you think about that?

Yeah, I mean, so, so to take a step back, like there, there is definitely like, you know, there's a lot of love for AI, there's a lot of hate for AI. And there's really a lot of people who love to hate AI, you know, it is a pastime for certain people in certain industries. I think, you know, purely because fear of what it could mean for people's jobs, their industries and stuff. I mean, I am very passionate about the promise of AI that I really do believe that It will help all of us lead better lives in the future. We'll have access to better information. We'll get better diagnoses from our doctors. We'll, you know, there will be things that take large amounts of time that will now take less amount of time for us. I think that we're at the very beginning of this new AI economy and I think It's, it's got a lot of promise. I do think that it's not going away. I think that it's going to touch every single business. So I don't think you can put your head in the sand and, and ignore it. But I think that right now, I mean, and I'm sure you've heard this to death, but, but I do believe it's got to be deployed responsibly. It's got to be done safely. It's got to be done respectful of of people's rights. If you're going to build a business, what was it? I think last week, OpenAI, if General Motors didn't have to pay for the parts in the cars that it, that it was making, it would be a lot more profitable too. You know, like they basically developed a model, developed a system that was trained on a lot of copyrighted works. And, you know, I think that If they are willing to share in the bounty and the promise of what these models will bring and, you know, get consents, share compensation, that give people credit. I think that those are the kinds of things that are going to be important for people changing the minds and attitudes of copyright owners as they approach AI.

AI.

Yeah, yeah, I agree. And California just signed into law a few bills that kind of set the tone, um, and I'm wondering, and I'll get your opinion on whether it is— is it more performative to set the tone of like, hey, y'all, y'all play fair, or do you think it will have actual, um, practical ramifications of protecting, um, creatives.

Yeah. I mean, you know what I frequently say is laws are great and regulation is great and laws keep honest people honest. It is the enforcement of those laws that give the dishonest people pause of, do I want to face the repercussions of violating these laws? And I think we have yet to see how aggressive different jurisdictions will be in enforcing these laws. So there is no doubt AI is going to be regulated. It should be regulated. You know, we, we regulate everything and we— I think that it's important that there be oversight, you know, for, for some of the reasons we talked about earlier, safety and responsibility. And, you know, we're the these things are, are going to be capable of performing tasks on the behalf of individuals. And I think the fear is that they'll perform tasks not at the behest of individuals, but they'll start performing tasks that they think are a good idea. And, and I think that there needs to be regulation of that.

Yeah. I mean, we see this every time there's a big new technological advance. Obviously, I think maybe the internet being the last big one to compare it with. And, you know, with it comes the good and the bad. And then seeing what regulations need to be put in place to keep the guardrails, guardrails on it. Do you think we'll see a federal bill that's kind of similar to the California, or you think this is going to be a state-by-state situation similar to like right of privacy laws?

I think that we're headed in that direction. I mean, unfortunately, there's a lot of dysfunction in Washington right now, and it's a challenge at times to get things done. So I do applaud California in taking the lead. And I think Gavin Newsom has done an admirable job, you know, of balancing the interests within his state. He's got the center of the entertainment industry with Hollywood, and he's got 30 out of the top 50 world-leading AI companies in the state. So, you know, he is walking the tightrope. He is trying to lead in this area of making sure people are being responsible, that they understand what is and is not permitted, even though these tools may allow you to do certain things that they're not permitted. But at the same time, he doesn't want to stifle innovation. You know, we're Like I said, we're at the very beginning of this. And if you start constraining how people and what people can do with these technologies, well, we may never understand the full potential.

Yeah, I think that's— we are just at the beginning stages of all of this. And it's that timing thing of do you put laws into place now to, you know, prevent things getting out of control, so to speak, or do you wait to see how things progress to see what actual laws you do need? I think The Copyright Office has been taking that approach to kind of a lot of their rulings have just used past rulings as a basis for their current rulings on AI and kind of looking to legislation to take the lead.

So yeah, I think we'll get there in terms of national laws. And, and I really do think that there should be national laws because You know, we can do it state by state, but, but at the same time, it becomes really horsey. Any time you want to try to approve something, you know, somebody wants to do something, they then have to hire people like you and me to do a 50-state review to, to understand what kind of laws are out there. And am I running afoul of particular statutes by state when really for businesses that cross state lines and and interact with consumers on a national level, there really should be national laws too.

Yeah. I mean, it's so easy to start a production LLC in Nevada. Yeah. Everything is so across the lines now more than ever because of technology. It really does need to be a little bit more uniform. Now, I'm sure you've heard about the new CAA Vault. CAA for— what is it? Creative Artists Agency. They've started a, what they call the Vault, where they store their clients or whatever clients opt in, store their digital replicas. They are using as a way to safeguard their talent. I think it's an interesting idea. I applaud them for kind of getting ahead on this. It's obviously also a nice way to keep your clients close, even past, past death, I suppose.

Yeah.

Do you see more of probably more third-party companies starting to do this?

Yeah, I do think it's an interesting path to take. I think that certainly for all of the deepfake type of uses that we've seen out there with celebrities, that having these kind of, you know, if you will, fingerprints or scans of celebrities' likenesses will enable businesses that, that can do scouring of the internet and see what's out there. You'll find these kinds of deepfakes faster. You'll be able to take them down sooner. All, all of that kind of stuff. So I do think it's, it's a way for people to not just play defense on, on deepfakes, but it's a way for them to start thinking about playing offense and taking control of how their name, use, and likenesses get used in connection with these tools.

Yeah, that's a great, great way to look at it for sure. Yeah, it's going to be curious to see how much of a commodity someone is after death, after their death. A lot of people think it's going to be really popular, you know, to have— I won't name any particular actors because, because I don't want to think of them as being dead, but, you know, like, they're after character. Um, but I don't know, I'm kind of in the camp of there's, there's so many new people that are alive, or new or not, a lot of people alive that are doing great things in the entertainment space to where— so I don't know, it'll be interesting to see if, uh, how much these characters are— or not characters, but folks are used after their death Right.

I also think it will really depend too upon the notoriety and theme of a particular celebrity at the time of their death. You know, I think that, right, obviously, you know, there's a huge business for Elvis merchandise, huge business for Marilyn Monroe merchandise that, you know, they've become icons of a time period of the Hollywood, you know, back in the day, etc. I think it will really depend upon what, what the, who, who we're talking about and where they were sitting in their career, in their popularity at the time of their death, because essentially they'll be frozen in time.

Right. Yeah.

Yeah.

I agree. You still see like the, the Johnny Cash ATMs. Yep. There are those icons that, that, that stay with us for, for, yeah.

James Dean.

Yeah.

There are definitely certain ones that, that, you know, you understand the popularity of.

Yeah. So I, I think that, um, the more we go down this digital path, I think indie filmmakers have a real opportunity here to, number one, because the budgets have been pulled back a bit, it's forcing independent filmmakers to do their own, um, filmmaking and even distribution. I think there's gonna be a lot more opportunities for that coming down the pike. And I think it's going to be kind of a— not a backlash, but a polarity of, um, the difference between big digital tech movies and more indie movies.

Um, yes, I mean, I think depending on how you think about it, the movies— the, the AI should be a tool to help the storytelling. It shouldn't be about the AI and talking. You know, like if you think about it like CGI, you know, that CGI didn't exist. Special effects basically had to be done practically. You had to use wires. You had to figure out ways to depict on screen the kinds of things that came from the writers' and directors' imaginations. And when CGI came along, it made it a lot easier for, for some of these things to, to all of a sudden materialize before our eyes. If we, if we think about AI as just the next generation tool to help people do it, it, it's, you know, economically, like you were saying, it could be a great equalizer because it's putting in, in, in the same way that, you know, having a great camera on your cell phone and now people are using that to shoot, uh, student films and independent films and things like that. You know, I think the fact that you're putting these tools in more people's hands will enable anybody with a great idea to tell their story.

I agree. I think that is one of the exciting things, how just your everyday filmmaker can shoot a full feature film on their phone using AI tools for, for editing or whatever the case may be, uploading it. And yeah, there's a lot. I see a lot of excitement that this can bring. And yeah, your example or comparison with photography or photos, I think is spot on. I mean, I take great photos now with my iPhone that I couldn't have taken years back. And the creative tools that we now have access to, to, to really manifest the ideas that are inside of us. There really is so much opportunity.

Yeah, that's, that's why, like, you know, when you read about James Cameron joining the board of Stability AI, like, to me, when I read that, I was like, well, of course, you know, like that, that to me it felt like such a no-brainer because He's always been a technology pioneer. He's clearly an incredible storyteller, an incredible director. And every film he's done, he has pushed the boundaries of the tools and technology available to him to tell the stories that he wanted to tell. So now, you know, there's this new technology. And by him joining the board, I think, It's a brilliant move by Stability. And I think, you know, it's almost like a way of creating an ambassador to Hollywood who will help people realize these things can be very helpful. They don't necessarily have to be feared the way that many people fear them.

Yeah, I love that perspective. Yeah, thank you. Now I want to mention you run Telluride Legal Strategies. Where you consult companies on all the things we've discussed, plus many, many other things. Tell us about what all you do at Telluride.

Yeah, I mean, so I'm pretty much a sole practitioner. And after I left Showtime, I, you know, got a call from a friend who said, hey, would you— would be interested in doing some consulting with a client that, that he had? And it basically started from there and mushroomed and now I'm working with startups, I'm working with huge multinational companies and they're all grappling with issues. A lot of them are in the area of, or in the intersection of law, media, and technology. So whether it's privacy issues that they're starting to collect data on their customers where They previously hadn't done that. They're looking at underlying intellectual property and they're saying, oh, do we have the rights under our existing deals to exploit this IP in some of these new ways? And I'm helping them go through those analyses. They're looking at AI and they're saying, okay, I'm really scared of this and I don't want it to hurt my business. But I'm also afraid of putting my head down and, and not looking at the ways it can help my business and, and, you know, helping them understand what kinds of things they could do, what kind of guardrails you can place either within agreements or, or within products themselves so that you're not giving away the company store. You're not, you're not accidentally exposing proprietary IP and, and, you know, to, to the, the larger world. So, you know, it, it's been really fascinating. It's interesting just the fact that, you know, some of the same questions come out of the, the 4 guys who are doing their first round of financing and company that's in, you know, many countries throughout the world and they're just starting to dip their toe into new areas.

Yeah. And now we're seeing so many companies start their own production company like Chick-fil-A. So I imagine you're a great, great advisor on startups in that, in the entertainment space and all the mergers going on. So I'm sure you're a busy guy. And let our listeners know, to connect with Rob, he is at telluridelegalstrategies.com. It'll be in the show notes. And also connect with Rob on LinkedIn. He's easy to find, Rob Rosenberg on LinkedIn. And I want to thank you so much for sharing your wisdom and expertise with us today. Any, any parting notes you want to leave us with?

Just, just a reinforcement that there is so much potential in the technology that we're, that we're seeing today that I would say don't run away from it, run towards it. Just make sure you've got the right people on your team to help you, help you evaluate it, to help you make sure you don't misstep. But, but there's a lot to be gained, a lot more to be gained than to be lost. So, you know, I would, would definitely recommend that you embrace it and, and figure figure out how to use it before your competitors did.

Yep. It's not going anywhere. So, yep. Well, thank you, Rob.

Thank you. Thank you.

Thank you so much for listening to today's episode. If you like the podcast, please like, subscribe, maybe even share to your friends. And for more information about my services, visit my website at tishamorris.com. That's T-I-S-H-A M-O-R-R-I-S. Well, that concludes today's episode, and I wish you all the best. Until next time, keep creating and please take care.