Generative artificial intelligence (AI) tools like ChatGPT, Sora and MidJourney are disrupting the industry and impacting creative jobs.
While much of the focus has been on the United States, where surveys predict that nearly 204,000 jobs in the entertainment sector could be impacted by AI in the coming years, the ripple effects are already being felt across the border into Canada.1 Closely intertwined with Hollywood, the Canadian film and television industry faces similar pressures.
For Canadian creatives, this shift raises questions about the future of storytelling.
AI technology is blurring the lines between bona fide creativity and technological brilliance, and crossing the boundaries of consent, compensation and creative control. This technological leap has raised concerns surrounding AI and its influence on A-list artists and greenhorn production assistants.
Where does the AI path lead, and how does it affect the content creating community?
While some hail AI as a game-changer, others view the initial hype with skepticism. However, one thing is certain: everyone is watching closely and is still getting used to this technology. The onus is on everyone in the entertainment industry to develop strategies to leverage AI and manage the risks this evolving technology brings.
Emerging risks of AI in entertainment
From crafting captivating special effects to composing personalized playlists, AI's potential to enhance viewer experiences and streamline production processes is undeniable. However, alongside this excitement lies a growing concern about the potential risks associated with this powerful technology.
Media liability
Traditionally, media errors and omissions (E&O) insurance has been a cornerstone for productions. AI, however, presents a new frontier within media liability. The current insurance landscape is still adjusting, and the entertainment industry is struggling with how to integrate AI responsibly and ethically without jeopardizing creativity and originality and giving fair compensation to all parties involved.
For instance, imagine a scenario where an AI program, fed on a vast library of movie scripts, generates a screenplay with striking similarities to an existing work. If an artist co-creates a song with AI and the song becomes a hit, who receives the royalties — the singer, the AI developer or both? Should creators be required to disclose any involvement of AI in the development process? Can an AI be held liable for plagiarism or offensive content it produces? What about the programmers who designed the AI?
These unresolved questions highlight the ongoing struggle to define the role of AI in the creative process. The insurance marketplace is cautiously navigating this uncharted territory. One prevailing view is that since AI is essentially a tool used to create content, similar to traditional methods, the same clearances and safeguards should still apply.
This places an extra layer of clearance processes/procedures for the clearance attorneys. Further, the bar for copyright infringement is twofold:
- Access
- Substantial similarity
Therefore, utilizing AI could take away the defence of access.
As AI technology and its adoption in content creation mature, we can expect a more nuanced approach to E&O insurance. Insurance companies will likely develop expanded underwriting practices to address the specific risks associated with AI-generated content. Underwriters may ask questions regarding the use of generative AI and existing projects with similarities.
Equipment risks
Virtual sets and computer-generated images, along with other AI tools, can minimize the need for expansive physical sets and location scouting. This reduces the reliance on extensive equipment fleets and operational expenses. However, it can increase the value of on-site equipment needed for the entire ecosystem. Insurance coverage needs to reflect this shift, potentially requiring higher insured values or specialized equipment coverage.
Virtual production might eliminate the risk of equipment damage during travel or on location. But new risks, such as technical malfunctions within the virtual production setup or cyberattacks emerge, compromising the equipment used for AI rendering.
Locations
AI and augmented reality (AR) can conjure realistic sets and environments, eliminating the need for international travel and its associated risks. This is a positive development for production safety, but it presents challenges for insurers who traditionally factor location-based risks into their pricing and underwritings. The reliance on digital infrastructure and networks for virtual productions can also present heightened cybersecurity risks, which may need to be mitigated.
Digital content loss
Losing access to the AI-generated content due to technical glitches, hardware failures or cyberattacks can be catastrophic. Delays in recovering lost content can significantly impact budgets and timelines. Robust digital asset management becomes a necessity for production companies and artists alike. Insurance companies might incentivize or might require production to implement stricter data backup protocols and disaster recovery plans to minimize the impact of digital content loss.
Mitigating risks with Gallagher
As AI's involvement is still developing in the entertainment industry, proactive risk management becomes paramount for studios and production houses. Gallagher helps entertainment companies by conducting comprehensive risk assessments and identifying physical, ethical, reputational, or regulatory risks associated with using AI. Our expert team develops specialized insurance solutions that can help the entertainment industry manage any potential risks associated with AI usage.
We offer specialized insurance coverage designed to help you mitigate risks, protect creative assets, and ensure compliance with existing and emerging legal frameworks surrounding the fast-moving nature of AI in the content creator's world.
