Disney’s sprawling $1 billion licensing deal with OpenAI is a sign that Hollywood is getting serious about adapting entertainment to the age of artificial intelligence (AI), marking the beginning of what an Ark Invest analyst describes as a “pre- and post-AI” era for entertainment content.
The deal, which allows OpenAI’s Sora video model to use Disney characters and franchises, instantly transforms a century of carefully protected intellectual property (IP) into raw material for a new kind of collaborative, AI-assisted creativity.
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Nicholas Grous, research director for consumer internet and fintech at Ark Invest, told Fortune that tools like Sora effectively recreate the “YouTube moment” for video production — putting professional-level creation capabilities in the hands of anyone with a prompt, rather than a studio budget.
In his view, this shift will flood the market with AI-generated clips and series, making it much more difficult for any new creator or franchise to stand out, compared to the early era of social video.
His remarks echoed the analysis of Melissa Otto, head of research at S&P Global Visible Alpha, who recently told Fortune that Netflix’s big push into Warner Bros. content was a big deal. shows that the streaming giant is motivated by the need to bolster its arsenal as it sees Google’s AI video capabilities exploding with the arrival of TPU chips.
As low-cost synthetic video proliferates, Grous said he believes audiences will begin to mentally divide entertainment into “pre-AI” and “post-AI” categories, placing a greater value on work done mostly by humans before generative tools became ubiquitous.
“I think you’re going to basically have a divide between pre-AI and post-AI content,” he said, adding that viewers will consider pre-AI content to be closer to “real art, made only with human ingenuity and creativity — not this AI rubbish, for lack of a better word.”
Disney intellectual property as fuel for AI
Within this scenario, Grous argued that Disney’s true advantage is not just access to Sora, but the depth of its pre-AI catalog across animation, live-action films and television.
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Iconic franchises like Star Wars, princess classics and historical animated characters become building blocks for a global experiment in AI-assisted storytelling, with fans hands-on testing new scenarios on a massive scale.
“I actually think — and this might sound counterintuitive — that the pre-AI content that already existed, Harry Potter, Star Wars, all the content that we grew up with… that gradually becomes more valuable to the entertainment landscape,” Grous said.
On the one hand, there are agreements like Disney’s with OpenAI, in which IP can be transformed into user-generated content; on the other, IP represents a solid pipeline of content for future programs, films and the like.
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Grous designed a feedback loop in which Disney can observe which AI-generated character combinations or story configurations gain traction online, and then selectively “pull” the most promising concepts into higher-budget, professionally produced projects, whether for Disney+ or theatrical release.
From Disney’s perspective, he added, “We didn’t know that Cinderella coming down Broadway and interacting with these types of characters — whatever that may be — would be something that our audience would be interested in.”
The OpenAI deal is exciting because Disney can bring this content to its platform, Disney+, and make it more premium. “We will use our studio expertise to transform this into something more refined than what an individual can create alone.”
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Grous agreed that the emerging pre-AI audiovisual library market is similar to what happened in the music industry, where historic catalogs from artists like Bruce Springsteen and Bob Dylan reached huge figures due to buyers betting on the long-term value of streaming and licensing.
The big Netflix-Warner deal
For streaming competitors, the Disney-OpenAI pact is a strategic wake-up call. Grous argued that rising prices in the dispute for Warner Bros. between Netflix and Paramount show the importance of IP for the next phase of entertainment.
“I think the reason this dispute [pela Warner Bros.] is approaching $100 billion or more is the content library and the potential to do a Disney-OpenAI type deal.”
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In other words, whoever controls Batman and the like will control the inevitable AI-generated versions of these characters, although “they could take a franchise like Harry Potter and just create garbage on top of it.”
Netflix has a great track record in monetizing libraries, Grous said, citing the example of how Suits, the comedy-drama mix from the now-defunct USA channel, became successful again when it arrived on Netflix — proving that large catalogs can be revitalized and re-monetized when combined with modern distribution.
Grous cited Nintendo and Pokémon as examples of under-monetized franchises that could see similar gains if their owners closed Sora-style deals to bring the characters deeper into the mobile environment and social media.
“That’s another company that you look at and think, ‘Oh my God, the franchises they have… if they can bring them into this new era that we’re all living in, that’s a sure shot opportunity.’”
In this environment, the Ark analyst suggests the Disney-OpenAI deal is less a one-off licensing victory and more an early model for how traditional media owners can survive and thrive in a saturated AI market.
Companies with rich catalogs of pre-AI content and willing to experiment with new tools, he argued, will be best positioned to stand out from the “AI junk” and turn nostalgia-laden IP into durable, flexible assets for the post-AI era.
Behind all this is a broader fight for public attention that goes far beyond traditional studios and shows how the technology and entertainment sectors are becoming even more diffuse than when Silicon Valley invaders entered streaming for good.
Grous notes that Netflix itself has long viewed its competition as everything from TikTok and Instagram to Fortnite and “sleep” — a mindset that sits naturally with the new wave of AI-generated videos and interactive experiences. (In 2017, Netflix co-founder Reed Hastings said that “sleep” was one of the company’s biggest competitors as it consolidated its binge-watching series.)
Grous also warned for the era of post-AI content: marathon episodes will no longer bring the same feeling, and there will be some type of reaction from the public.
As critics like James Poniewozik, from The New York Times, have highlighted, streaming series don’t seem to make you want to rewatch as much as recent hits from the golden age of cable TV, like Mad Men.
Grous said he sees a future in which the threatened cinema gains strength again. “People are going to want to go out, meet other people or go to the movies. We’re not going to want to just swallow AI garbage 16 hours a day.”
Editor’s Note: The author worked at Netflix from June 2024 to July 2025.
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