We haven’t quite reached a point of AI saturation in animation, but that time isn’t far off. When it happens, the content creation bottleneck we’re all so familiar with will entirely cease to exist. Instead, the industry’s priority will shift towards persuading people to care about what it makes and convincing them to choose it over everything else. Generative tools are already cutting away what was once a meaningful production advantage, changing the cadence of the industry as creators seek a new way to secure a foothold in the market.
The changing rhythm of animation
The familiar tempo of “render-then-wait” that used to define the animation industry is steadily being replaced, as studios small and large – Pixar and Disney, DreamWorks, Sony Pictures Animation – are actively experimenting with AI to accelerate production. Look development, previs, and early story exploration are all being enhanced, removing the need for that specialised assembly-line that we all still recognise as the backbone of animation. That process can now be achieved quickly and competently by anyone with the right tools and prompts. The outcome is a landscape where “pretty good” animation, infinite iterations, and rapid experimentation become cheap, fast, ubiquitous, and increasingly difficult to differentiate without something audiences truly value.
The growing importance of IP
IP has always carried significant value, but as AI moves to reshape the production process, providing audiences with near-unlimited choice, it’s the content that captures audience attention that matters most. And that’s becoming increasingly scarce. Which is where the escalating value of IP will be seen.
The studios that own or strategically acquire the established franchises – Marvel, Star Wars, DC, the Wizarding World – are the ones that will ultimately win the game. Because it’s not laziness or creative torpor behind the endless repetition of and addition to the likes of Despicable Me, How to Train Your Dragon, or Shrek, but a rational response to audience behaviour and the preference for familiarity. These are worlds with built-in demand, and studios will naturally fully maximise the long-term potential of that valuable IP.
But why is it happening? Because familiarity reduces risk for the studio and decision fatigue for audiences. In 2024, established IP dominated viewer demand, with adaptations consistently outperforming originals in a market where attention is finite. As viewing becomes increasingly mediated by algorithms, it’s recognition that seems to capture attention.
Why IP must lead strategy decisions
Taking all of that into account, the only sensible path forward for studios is to be IP-driven. Over the next few years, acquiring, licensing, or partnering around strong IP with an existing audience will be essential. AI isn’t just going to add to content incrementally, but flood the entire market, and audiences simply don’t have the time or the will to dredge through the torrent to find something new. To protect their time, enjoyment, and value, they will default to either what they already recognise, or what trusted curators and platforms recommend. IP ensures that it’s your content that they decide to invest in, as it signals a familiar tone, quality, and identity that they don’t have to think about.
What’s the future for studios?
These changes can only mean a shift in core competencies for studios. Execution speed and production efficiency won’t be differentiators. Instead, the focus will need to become world stewardship; whether a franchise is worth adding to, remaking, or relaunching. And how to build on the comfort of audience familiarity. AI can help explore alternate storylines, stress-test character arcs, localise humour, and rapidly spin out adjacent formats. But it can’t build that emotional attachment that is needed to pull audiences in. That takes time, consistency, coherence, and repetition. And that’s where IP’s true value lies.
AI’s role in all of this is experimentation, iteration, and optimisation, but without IP, its value is minimal. No one will really care who can generate the most content; the goal will be protecting and expanding the story worlds that audiences want.
AI has entirely flattened the cost of animation creation, wiping away the need for many of the traditional skills. But it’s also shifting the focus and adding worth to IP, highlighting what’s important to audiences in a world where content is everywhere.
Douglas McGinness is founder and director of the AI creative studio Animated Company. His work has received a D&AD Wooden Pencil award and has screened at the Festival de Cannes. Clients include Apple, Nike, Google, Epic Games, BBC, Paramount, and more.
