Sayonara, Sora!

PLUS: A Case in Point

Author

Steve
March 31, 2026

Hello Hollywood tech nerds!

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Sayonara, Sora!

Can’t ignore the titanic news from last week, which is that OpenAI suddenly shut down its video generation model Sora. This also ended their $1 billion deal with Disney, which would have seen Disney-owned IP licensed to OpenAI for use in user-generated videos, amongst other planned content.

The Wall Street Journal has an excellent writeup on the decision to wind down Sora, featuring some mind-boggling numbers from behind the scenes:

The worldwide user count peaked at roughly a million soon after the app’s launch, but never reached that level again. In the subsequent months, it dwindled to less than 500,000, according to data from Similarweb.

Sora was losing roughly a million dollars a day, according to a person familiar with the matter.

Not that I’m telling you something you don’t know, but these numbers are terrible. A million dollars a day to… generate fake viral videos whose sole audience is maybe one or two people? I could clip footage from my daily drive in LA, put it on YouTube and generate more revenue than Sora!

In February, Iger said on an earnings call that short-form videos created with Sora would soon appear on the streaming service Disney+, which was preparing to launch a vertical video feed.

Again, who would be the audience for this? I generated a video with Homer Simpson passing a blunt to my landlord and my Aunt Joan and that wasn’t even entertaining to me, much less someone spending $19/month on Disney+!

The Hollywood Reporter’s take on the collapse of Sora is typically irritating, predictably so since THR like much of the industry press has published article after article of unquestioning AI coverage. Pretty much anyone who slaps “AI” on their entertainment company will get a credulous profile from the Reporter, which then has the temerity to say this:

The shocking retreat of Sam Altman and OpenAI from Hollywood last week, with the axing of Sora and its we-hardly-knew-ye Disney deal, underlines the nobody-knows-anything point.

“Nobody knows anything” perhaps because the industry press refuses to inform its readers about anything specific to how AI works. For instance, if you were reading some of THR’s earliest Sora reporting, you might be surprised to find there are absolutely no mentions of how expensive it is to do video generation. Indeed, the obstacles were written to imply pretty much anything besides the cost:

Since the resolutions of the work stoppages last year, buzzy AI tools like OpenAI’s text-to-video model Sora have created anxiety in Hollywood that they could undermine labor from crewmembers and talent. Union protections have surfaced as the principal barrier to displacement.

[Sony Pictures CEO Tony] Vinciquerra’s comments signal that studios are looking to further deploy the technology and are only constrained by their contracts with unions.

…Last year, DreamWorks founder Jeffrey Katzenberg predicted that AI will cut the cost of animated movies by as much as 90 percent as the tech is positioned to disrupt the media and entertainment industries. Pointing to the “good old days” when a world-class animated films took 500 artists five years to create, he said that it “won’t take 10 percent of that three years from now.”

Didn’t Jeffrey Katzenberg found something else more recently besides DreamWorks? I’m racking my brain here… what could it be… Ah yes, Quibi! Talk about a guy with his finger on the pulse!

I’m just a lowly idiot, but when we’re discussing generative AI’s usefulness in replacing various sectors of production, I would assume the actual cost of these tools would be included. If Sora’s daily cost was indeed $1 million/day, that would suggest to me (remember, a lowly idiot) that perhaps the AI companies and their boosters have a strong interest in concealing these amounts from Hollywood in order to root themselves firmly in the system before revealing the actual unsubsidized price tag. Anyone who’s ever used Uber knows exactly what this looks like!

Getting back to THR’s assertion that “nobody knows anything,” I would posit that readers of this newsletter certainly do! Check the archives:

Somebody subscribed to this lowly idiot’s newsletter is likely better-informed on this topic than a studio exec who only reads the trades every day. Sad!

A Case In Point

Not to belabor the point or beat a dead horse, but just today Variety published a story [press release] on a new AI-powered product called Quilty:

Quilty, a new artificial intelligence platform designed to help the entertainment industry make more informed financial and creative decisions, has launched. The technology includes creative analysis for scripts and projects, packaging suggestions, as well as market forecasting about how the film will do commercially. It also offers production planning services.

…As Horsman suggests, the technology will offer crystal ball predictions about how a movie will do at the box office, as well as its cultural resonance.

That’s right, their AI robot will be able to determine a project’s “cultural resonance,” a notoriously-predictable quality solely determined by a film’s script and not any other external factors. How do we know this product will achieve the ability to tell the future? Well, because the founder of the company said it will! That’s good enough for Variety!

Here’s a round-up of cool and interesting links about Hollywood and technology:

The AI industry is lying to you. (link)

How the Iran War could impact Hollywood’s Middle Eastern cash pipeline. (link)

Using visual effects to create a human connection in Predator: Badlands. (link)