Why Disney’s OpenAI Deal Is Actually Smart
The mouse figured out something most of Hollywood hasn’t: you can’t win the war for attention, but you can win the battle for engagement.
This week, Disney announced a $1 billion investment in OpenAI and a three-year licensing deal that will let Sora users generate short videos featuring over 200 Disney, Marvel, Pixar and Star Wars characters. Mickey Mouse, Darth Vader, Iron Man—all of them, available to fans to remix and reimagine.
The reaction from much of the creative community has been predictable outrage. The Writers Guild called it a sanctioning of “theft.” Critics see it as another step toward the devaluation of human creativity.
I think they’re missing the point.
Two years ago, I wrote about how Five Nights at Freddy’s had pioneered a new model of IP development I called the “fanverse”—a permissive, community-driven approach that treated fan creation as an asset rather than a threat.
FNAF’s embrace of fan games, fan fiction, and derivative content didn’t dilute the brand. It supercharged it, culminating in the highest-grossing horror movie of 2023.
Disney just took that playbook and industrialized it.
The attention war is already lost
Here’s the uncomfortable truth that traditional media still hasn’t fully internalized: they cannot win the war for attention. It’s a zero-sum game, and they’re at a massive structural disadvantage.
As Doug Shapiro has pointed out, linear media is fighting with one hand tied behind its back. Streaming services, social platforms, and games are all competing for the same finite resource—human attention—and traditional media’s weapons (scheduled programming, theatrical windows, cable bundles) are increasingly obsolete.
GenAI is about to make this much, much worse. As the cost of content creation collapses toward zero, the volume of content will approach infinity. Every creator with a laptop becomes a studio. Every fan becomes a filmmaker. The supply of “content” is about to explode in ways that will make the current glut look quaint.
In this environment, putting out a movie every five years and hoping people remember to care is a losing strategy.
The battle Disney can win
But there’s another game entirely—one where traditional media actually has an advantage.
Deep fan engagement.
The value of Disney’s IP isn’t just the movies themselves. It’s the emotional connection that millions of people have with these characters. That connection is the moat. The question is how to deepen it, how to make it stickier, how to ensure that when someone thinks about heroic stories they think of Marvel, when they think about magic they think of Disney princesses.
The key is enabling fans to engage with IP across multiple touchpoints, formats, and modalities—continuously, not episodically. And the most capital-efficient way to do that? Outsource the work to the fans themselves.
This is exactly what the Disney-OpenAI deal enables. Instead of Disney spending hundreds of millions to produce content that fans consume passively, fans will spend their own time and energy creating content that deepens their emotional investment in Disney’s characters. Every Sora-generated video of Stitch doing something ridiculous is another touchpoint, another moment of engagement, another thread tying that fan more tightly to Disney’s universe.
This is not Netflix
The most common critique I’ve seen is that this deal is equivalent to Disney licensing content to Netflix—a strategic blunder that helped build a competitor. But this analogy is superficial at best.
Netflix was a substitute distribution layer. It used exclusive rights to Disney’s product to directly compete for attention and subscription dollars. Netflix took Disney’s content and used it to build Netflix’s audience, Netflix’s brand, Netflix’s business. When Netflix got strong enough, it started making its own content and became a direct competitor. Netflix eroded Disney’s moat.
OpenAI is something different. It’s a capability layer that enables derivative products. When fans create Sora videos featuring Disney characters, they’re not building OpenAI’s brand—they’re reinforcing Disney’s. The emotional connection, the nostalgia, the fandom: all of that accrues to Disney. OpenAI is just the tool.
If anything, this deal strengthens Disney’s moat by dramatically expanding the surface area of fan engagement while keeping the IP firmly in Disney’s control.
The risks are real
This doesn’t mean the deal is without risk. A few questions worth watching (h/t Doug Shapiro again - go subscribe to The Mediator):
How effective will the guardrails be? Disney and OpenAI have committed to “robust controls” to prevent harmful content. But we all know how that tends to go. Somewhere, someone is going to generate something deeply inappropriate with these characters, and it’s going to end up on social media. The question is how often, and how Disney responds.
What happens when fan content hits monetizable platforms? The deal covers Sora-generated content, but what happens when that content gets posted to YouTube or TikTok? Who owns the monetization rights? How do you prevent commercial exploitation? These are thorny questions that the announcement doesn’t fully address.
What does this mean for human creators? The WGA’s concerns aren’t baseless. If fans can generate decent-looking Star Wars content at home, does that reduce the perceived value of professionally-produced content? I suspect the answer is more nuanced than the critics fear—professional content and fan content serve different needs—but it’s a legitimate question.
Hollywood’s risk aversion problem
What strikes me most about this deal is how unusual it is for Disney—or any major studio—to move this aggressively on new technology.
Hollywood’s default response to technological change has always been resistance. The industry fought VCRs, fought DVDs, fought streaming, fought everything. And they were wrong every time. The technologies they fought ended up creating enormous new revenue streams, but because they fought instead of led, much of that value was captured by others.
Disney deserves credit for bucking this trend. Instead of waiting for the inevitable—fans using AI tools to create Disney content regardless of permission—they’ve chosen to get ahead of it. They’re setting the terms, building in guardrails, and positioning themselves to benefit from the shift rather than be victimized by it.
Is it a perfect deal? Probably not. But in a world where the alternative is watching your IP get remixed without your permission or participation, this seems like the smarter play.
The fanverse is coming for everyone. Disney just decided to own theirs.
If you’re building at the intersection of AI and entertainment, we’d love to hear from you.