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AI could help studios and producers move faster – but operational gains may be the least interesting implication.

McKinsey’s latest research suggests the more important lesson comes from prior technology disruptions in Hollywood: new production tools can do more than lift productivity. They can change what gets made, shift who captures value, and alter the industry’s economics. The analysis suggests AI could affect roughly 20 percent of original content spend over the next five years, at a moment when media companies are already facing slower growth, fragmented attention, and shifting viewing behavior.

The question industry leaders should be asking isn’t whether AI will increase productivity in film and TV – it already is. The bigger question is what happens if AI starts to reshape the entertainment industry itself – and are you prepared?

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Now for highlights from my Favreau chat…

Walking onstage at CinemaCon today for its annual filmmaker Q&A in front of about 2,000 theater industry professionals, Jon Favreau handed me a warm Cubano sandwich from Roy Choi’s Chef Truck at the Park MGM hotel, which was inspired by his hit 2014 movie. Before I could eat it, I had to think about it for 45 minutes as I talked with the veteran filmmaker, actor, technologist, and onetime movie theater usher. Luckily, Favreau is a great talker and treated the crowd to a mini-dissertation on the encroaching A.I. revolution, filming with the giant “Volume” of LED screens that he pioneered, the exit of Kathleen Kennedy and new leadership at Lucasfilm, and, of course, bringing The Mandalorian from Disney+ to theaters on May 22 with The Mandalorian and Grogu. Some highlights from the conversation are below and you can watch or listen to the whole thing here…

Matt Belloni: There’s a lot of confusion out there about your filmmaking process. There are people that say, “Well, he doesn’t shoot on location. He doesn’t do practical anymore.” But that’s not really true. Take us through the process on this film.

Jon Favreau: You have to separate what we did for the streaming show and for [Mandalorian and Grogu]. We had months to do each season. This one, we had years.

But this is the first attempt to transition a streaming series to a theatrical movie. A lot of pressure.

We knew it was gonna be a theatrical release. We knew we were gonna be working with Imax. We took the time to build vertical sets, to build practical sets. We did use some of the same [Volume] technology, but mostly for interactive light and for reflections, which are important when you’re on a stage so that everything’s not bluescreen. But we built jungles, we built tanks, we built pits, we built forests. And then we also shot out on location as well.

Not a lot, and sometimes it’s a layer and you’re shooting part of that layer not in that environment and you’re compositing it together. But we use all technologies, whatever tells the story the best. We have a lot of miniature work. But we also have state-of-the-art C.G. sims that ILM is at the forefront of. So to us it’s a mixed bag. And we even have a sequence that we worked with [V.F.X. legend] Phil Tippett on: a fully stop-motion sequence in the film.

I was driving around L.A. with my 10-year-old, and we saw the billboard. And I said, “Are you interested in that movie?” And he said, “Dad, that’s a show.” So…

We’ll be right back. (Laughter.)

So that’s the challenge here.

Yeah. So here’s the trick: You gotta deliver something that the audience enjoys, regardless of the medium. And in this case, what could we do that we couldn’t do before? We have to treat it like the first season and the first episode of The Mandalorian, which is: Don’t assume anybody’s seen anything, but also make it clear to the people who’ve been with Star Wars for 50 years that this is something that is for them. We can’t forget that Star Wars hasn’t been in theaters for almost seven years. There are audience members who were not old enough to know Star Wars in the theater. We have to invite those fans in.

Was there a creative spark that said to you, “This is an idea that is theatrical,” that is going to deliver what you just described?

Before the [2023] strike, we were writing a fourth season. And then like with the Dodgers, you get a tap on the shoulder in the bullpen. Do you want to pitch in the big game? We have been talking about doing something for the big screen with this for a long time. I thought it was gonna probably be some mixing of different media, like something for streaming and then having a theatrical component. And then I finally got asked, “Would you be open to exploring these characters for the cinema?” You have to completely switch hats then.

It’s a different filmmaking style.

Completely different. Star Wars has always been about emotion, spectacle, humor, excitement, fun. If you think about it, when we first saw Star Wars, George Lucas dropped us right in the middle of a storyline, but I never felt like I was at a loss because I understood who the good guy was, who the bad guy was, and he pulled me into that experience. I think he was influenced a lot by the cliffhangers of his youth, and we really lean into that kind of pulpy, fun, space opera thing. So I think anybody who’s a fan of sci-fi will be able to jump in. You have to think of Star Wars not just as a genre in and of itself, but as a lens for other genres. And so by going to what influenced George, that gets us to a feeling of consistency and authenticity.

You must get asked the A.I. question all the time. What is the most promising aspect of generative A.I., and what is the scariest or worst possible scenario?

Movies have always been about the conversation between technology and storytelling. The real question is: is it different? Is this breakthrough in tech different enough in degree to actually be a difference in kind? In other words, is this just another innovation, or is this gonna change everything?

A MESSAGE FROM OUR SPONSOR

AI could help studios and producers move faster – but operational gains may be the least interesting implication.

McKinsey’s latest research suggests the more important lesson comes from prior technology disruptions in Hollywood: new production tools can do more than lift productivity. They can change what gets made, shift who captures value, and alter the industry’s economics. The analysis suggests AI could affect roughly 20 percent of original content spend over the next five years, at a moment when media companies are already facing slower growth, fragmented attention, and shifting viewing behavior.

The question industry leaders should be asking isn’t whether AI will increase productivity in film and TV – it already is. The bigger question is what happens if AI starts to reshape the entertainment industry itself – and are you prepared?

Learn More

What do you think?

I’ve always been very thoughtful and slow in my adoption of new tech. I was using stop-motion in Elf. I was using forced perspective. It wasn’t until Iron Man that I really embraced C.G.I., which was many years after Jurassic Park. And then finally by Jungle Book, I was like, “Okay, I understand this, let’s really lean into this tech.”

We’re not gonna be able to have one standard because different filmmakers draw the line at different places. But I do think that we need to have clarity about the spectrum of these machine-learning tools. Do you treat generative A.I. the same way you treat rig removal for wire shots or segmentation when you want to separate a subject from a background? So I think that there’s a whole hierarchy of different technologies that we have to have a conversation about, and then have transparency as to what tools we’re using so that the audience understands what they’re buying—and then let them decide how we do this. And we have to figure out as an industry how not to undermine what we’ve built over a century in this storytelling culture around cinema.

But are you cool with A.I.-generated scenes?

For what I’m doing now, I have not used that.

Have you scanned yourself for acting purposes so that A.I. will have you forever?

I have not, but Marvel has enough of them for me. And I’m younger in them, so I like those better.

How has your filmmaking process evolved with respect to technology over the past, say, five years?

So the tech that I’m really leaning into now is more game engine. We were using Unreal Engine on the screens for the Volume. We use it for pre-vis, the things I’m collaborating with on the [Disney] parks. There used to be filmmaking, visual effects, gaming, and animation—four completely different trades, four different pipelines. Those stacks are starting to resemble one another and share innovation.

You’re the only filmmaker I know who’s been able to keep all of his productions in LA. Reveal the secret right now for how you’ve done that.

You have to be responsible to the people who are hiring you to make sure that whatever resources they’re investing in your production are going to be a win for them. That means finding new ways to be responsible and innovative, often leveraging technologies that are developed by other people. A lot of what I’m using is stuff that Jim Cameron built. And often it’s combining technologies or workflows that other people are using and optimizing them for either cost savings or for creative. When you go to a set, those shooting days—that’s the expensive part of the process. Iterating in the game engine and coming up with renders of pre-vis that you could evaluate editorially and get precise before you ever roll camera, that’s a trick they’ve been doing since Snow White.

You’re not shutting down streets or anything like that.

No, and you don’t have trailers, you don’t have people. And then when you film, you use a union crew, the best people you can hire. Let’s get the most work done.

You have a long relationship with Dave Filoni, who is now running Lucasfilm with Lynwen Brennan. Is Lucasfilm going to change with new leadership?

There’s exploration going on—not just at Lucasfilm, but across the board—about how you meet the audience where they are. And what’s that model? Is it for streaming or is it in the theaters? I think this is part of why I and a lot of filmmakers are here: because this is such an important moment.

There’s a Star Wars movie this year and next year. But we haven’t had one for seven years. Can theater owners expect Star Wars movies on a more regular cadence?

I mean, that’s not my job—

It kinda is, though.

When I get in there, I do the best I can. I just concentrate on the things I have understanding and control over.

So there’s not a Mandalorian trilogy in the works? Presumably they would inform you if that were the case.

Right now this is about getting this to the screen. There’s tremendous benefit to tapping into something where there’s already real estate in your audiences.

Well, but that’s a negative too. People have expectations for Star Wars, and the fans in the past have been pretty vocal about that. There were changes made between Episodes VIII and IX to address some of the fan responses, and it arguably didn’t help.

I’m very fortunate that the people at Lucasfilm are first and foremost fans of Star Wars. And so I find that if we talk something through, there usually aren’t big surprises of how the audience is gonna feel. If you do your best job and people don’t feel it and don’t connect with it, it just doesn’t feel right. It’s just not satisfying. I think the people you’re talking about don’t know about Star Wars. We need to address that. We need to show them what’s cool about it.

In the future, what percentage of movies do you think will utilize things like the Volume?

It depends what the tool set of emergent technology related to machine learning is, right? Because there are tools that will be coming online that allow for quicker and less-expensive segmentation. Meaning you can film somebody and separate them from the background without having to have the Volume or a greenscreen. That is not resolved yet; it’s part of the larger conversation that needs to happen around technology, but I know that the capabilities are emerging. The problem is everything gets dumped into the same basket, and that’s often paired with generative A.I.

When you look at the next five to 10 years of filmmaking, movies have to get cheaper, right?

All of that hinges on the conversations that all different facets of the industry have. There has to be a clearer conversation because there’s a lot of talking past one another and a lot of emotion. There’s so much great consumer-facing tech that could be utilized for filmmaking in just the planning process. Forget about whether you show it in movie theaters on the big screen. That’s gonna help collapse costs, and it’s gonna also help you get more precise creatively.

This is what the animation industry has understood from the beginning. Get it right before you ever paint a cell. There is a scene cut out of Snow White, one scene that still is being talked about because it was on the cutting-room floor. Whereas in any live production, there’s reshoots built in. To me, there are only a few ways to bring costs down. Visual effects could cost less, but more importantly, less shooting days. If you don’t shoot things you don’t put in the movie, that’s gonna save you a lot of money. And the planning process related to the technology of using game engine, pre-vis, all of these tools that are available to even an amateur filmmaker, will get you to understand your movie better so that when you hit the set, you’re much more focused and precise.

How do you feel about the health of movie theaters going forward?

Well, I’m feeling good this year.

See you Monday,

Matt

Got a question, comment, complaint, or a good skin cleanser to wash the Vegas off my face? Email me at Matt@puck.news or call/text me at 310-804-3198.

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