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OpenAI’s latest AI-powered disruptor, the text-to-image tool Sora, is prompting shifts in business models and agency pricing structures, five sources told ADWEEK.
Currently in research mode and limited to red teamers, Sora creates original, realistic videos up to one minute long. Creative agencies will be able to use this tool to test ideas and visualize concepts early in the ideation phase, trimming production costs and time spent.
Instead of charging clients for the final execution, costs around ideation and prompt engineering will be integrated into agency rate cards, a departure from providing such services for free to clients, said Jason Snyder, CTO of IPG agency Momentum Worldwide.
“It shifts the business models because we’re going to be changing the pricing structures and the service offerings,” he said.
OpenAI’s Sora adds to a roster of text-to-video tools currently available in the market. Gen2 by Runway has been in circulation for a year. Lightricks, maker of apps like Facetune and Videoleap, announced an AI-powered filmmaking tool, LTX Studio.
These tools may lead to agencies securing a larger portion of production budgets. However, concerns persist regarding the potential impact of AI tools on human jobs.
Sources told ADWEEK that tools like Sora aren’t necessarily job-killers but instead prompt a shift in the skillsets required to maximize their effectiveness. Others question its impact on agency staffing.
“If I can provide a creative service at 30% efficiency gains over what I previously did, not only does the client want to pay less, but I also don’t need as many people doing the work,” said Paul Roetzer, founder and CEO of the Marketing AI Institute. “Publicly traded companies, private equity and venture-backed companies are going to make decisions that are in the best financial interests, not the best human interests.”
Brands in-housing creative
The democratization of AI tools could prompt some brands to bring more creative tasks in-house. Similarly, agencies may be nudged to adopt this approach rather than outsourcing production to contractors and vendors.
“It’s already happening,” said Roetzer. “I’ve heard this come down from the C-suite who look across all functions and find ways to reduce costs because they think they can achieve greater efficiencies as these tools become more prevalent.”
