🎬 They're Pulling the Plug

👋 Good morning! Stephen Colbert is leaving late night for Middle-earth… literally. In a headline we did not have on today's bingo card, the late night host and Tolkien superfan is co-writing the next 'Lord of the Rings' movie for New Line and Warner Bros., adapting early Fellowship chapters Jackson skipped in the original trilogy. Colbert will write alongside his son Peter McGee and Philippa Boyens. "It turns out I'm going to be free starting this summer," Colbert joked. Reader, he was not joking.

We’re back with your mid-week edition of The Dailies. Grab your coffee and let’s get into it. 👇

OpenAI announced yesterday that the company is shutting down the TikTok-style consumer app it launched last fall, where users could generate and share short AI video clips in a vertical feed. OpenAI is also cutting off video tools for developers and removing video features from ChatGPT. In six months, Sora topped the App Store, sparked a copyright firestorm, landed a $1B Disney deal, and got killed.

Why pull the plug? Almost certainly money. OpenAI is projecting $14B in losses this year and doesn't expect to turn a profit until 2029 or 2030. Running a consumer video app while burning cash at that rate just doesn't add up. Especially one where the novelty wore off fast and all that was left was AI slop of Mister Rogers doing karate and cops arresting a sentient waffle. The company is pivoting toward productivity tools ahead of a potential Q4 IPO.

The biggest industry fallout: Disney is exiting its OpenAI deal entirely. Back in December, Disney signed a three-year licensing agreement letting Sora generate videos using 200+ characters from Disney, Marvel, Pixar, and Star Wars, with plans to eventually integrate the tech into Disney+. Disney was also set to make a $1B investment in OpenAI. Now both are dead. A Disney spokesperson called the collaboration "constructive" and said the company would "continue to engage with AI platforms," which is about as diplomatic as it gets.

The bigger picture: The most hyped generative AI video tool on the market couldn't survive a cost-benefit analysis. And with OpenAI out, Google is now essentially the only player in AI video generation with real scale (though it hasn't signed any IP licensing deals and is currently getting sued by some rights holders). As for Disney, new CEO Josh D'Amaro will likely pursue a similar deal with a different AI company. Worth watching.

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📝 Netflix is going all-in on original films. At its annual slate event last week, film chairman Dan Lin said Netflix plans to keep about half of its 50+ film slate for 2026 built on original stories. That's a lot of originals from one company. Other studios have had original hits recently (including 'Sinners' and 'Weapons'), but nobody's committing to them at that volume. Lin has pushed for originals since joining in 2024, but the play has gotten louder since Netflix lost its bid for Warner Bros. to Paramount. Without that IP library, the incentive to build your own only grows. The streamer is also filling genre gaps the majors have deprioritized, including comedies and young adult films.

🎙️ CNN is trying on a new look. Jake Tapper and Anderson Cooper spent last week experimenting with podcast-style setups on their flagship shows, swapping the traditional studio for office desks, big mics, and a table in the middle of the newsroom. It's a cosmetic tweak, but the subtext isn't subtle: networks are competing with YouTubers and podcasters now, and they know it. Critics have argued the real differentiator isn't the set or the mic, it's editorial freedom and trust. Others have suggested networks skip the imitation and license proven creators instead (think ESPN licensing Pat McAfee's popular YouTube sports show). No word yet on whether Anderson Cooper is launching a Patreon.

🎮 Epic Games is cutting over 1,000 jobs as Fortnite's audience shrinks. After a sustained dip in engagement with the hit video game, Epic is spending more than it's making. Same story, different industry: Like Hollywood's streaming boom, the gaming industry overbuilt during the pandemic and is now correcting hard. Epic is deeply embedded in the entertainment business. Its Unreal Engine powers VFX on shows like 'The Mandalorian' and 'Westworld,' and Disney invested $1.5B in the company in 2024 to build a Fortnite universe around Marvel, Star Wars, and Pixar. A shrinking Fortnite audience means one of Hollywood's most valuable cross-promotional platforms carries a little less weight.

It's only March, but box office watchers are already talking about Dec. 18. That's when Disney's 'Avengers: Doomsday' and Warner Bros.' 'Dune: Part Three' are set to go head-to-head at the multiplex, and neither studio plans to move. The internet's already coined it "Dunesday." Here’s how it’s shaping up:

The bet from both studios is that the holiday window is long enough to absorb everything. Free time, repeat trips, a clear runway through January.

Theater owners, for what it's worth, are thrilled. The post-pandemic box office has gone long stretches without a single hit, and plenty of theaters have closed as a result. One chain exec called a packed December "the best-case scenario ever." Another projected domestic Q4 revenue north of $2.5B (up from $2.18B last year). More than a scheduling collision, Dunesday is a litmus test for whether theaters can actually support this kind of volume again.