Anthropic's $1.5B Mistake. Yours Could Cost More. I Deep Dive on Ep. 277

0:00However, the oldest version of this lesson was taught over 2,000 years ago. In Luke 14, verses 28 through 30 in the Bible, Jesus shared a parable and it goes like this. This is Documentary First: The Deep Dive, where I take an insight from a recent podcast conversation, plumb it's depths and see what gold we can bring to the surface. I'm Christian Taylor. Let's dive in. Last week on the podcast, I sat down with Teddy Cannon. Teddy is an archival rights and clearance Producer in the film industry.

0:33It's also known as an ARC Producer Now you might be asking yourself what the heck is an ARC Producer and why should I care? Those are two very good questions, my friend, and I have the answers. So buckle up. An ARC Producer is the person who tracks down third party assets for a film, things like footage, music, photos, and documents and then he gets, he or she, gets the legal permission to use them. But here's the thing. Their job has traditionally been at the bottom end of the production ladder and at the post- production ladder at that.

1:09Often, especially an independent film, they're brought in when the film is already finished and filmmakers are scrambling to complete their "Rights Bible" for Errors & Omissions insurance. That's insurance that every film has to have to secure distribution. And by that time, adding an ARC Producer to solve the problem is going to be expensive. It's going to be complicated. And sometimes it can be project ending. Now, when I talked to Teddy last week, he had a fantastic example of this to share.

1:39A team had come to him with a nine-episode learning series already cut, already locked, filled with music video footage of famous artists, and one of them was the Jackson 5. In just one instance, the filmmakers used about 30 seconds of a Jackson 5 song in the first episode. After a bit of research, Teddy discovered it would cost about $50,000 to $70,000 to license - for ONE clip. in ONE episode out of nine. The number, in his words, was a jaw-dropping moment for the filmmakers.

2:09But the number isn't actually what I want to talk about today. What I want to talk about is the point that Teddy was trying to make, bringing ARC Producers in at the top. In pre-production. Before a second of footage is shot. And yes, that does mean you have to budget for an ARC Producer across the life of your production, but it also means that you would be protected from going over budget at the end, worst of all, losing your project altogether, In the days after our conversation, as I kept thinking about what Teddy said, it dawned on me.

2:41What he was advocating for in film production isn't just good advice for film production. It's good advice for life. Trying to get around the rules, cost cutting so you can save money somewhere else, not paying attention to the details of a project, those problems aren't unique to filmmaking. They show up in every part of our lives. Think about it, a contractor begins renovating a home without pulling permits because he wants to save money and win the job.

3:10But then a city inspector just happens to drive by and see the work. Suddenly, not only is everything more expensive, but his relationship with the homeowner is also ruined. Or a surgeon skips the pre-op checklist because she's in a hurry and she operates on the wrong knee. The patient pays for it and her career pays for it as well. a pilot skips the preflight checklist because he's flown the route a thousand times and he misses a warning light. Everyone on board pays for it.

3:41And right now, the biggest AI companies on earth are paying the most expensive version of this lesson. Anthropic just settled a class action for one and a half billion dollars because they trained their AI on books they didn't have the right to use. The New York Times is suing OpenAI for billions more, and the major music companies are suing AI companies for scraping song lyrics. These are the smartest engineers in the world, and they made the same mistakes many filmmakers have.

4:10They built first. They tried to clear the rights later and they're paying for it. Same problem, just a different scale. However, the oldest version of this lesson was taught over 2,000 years ago. In Luke 14 verses 28 through 30 in the Bible, Jesus shared a parable and it goes like this. Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have money enough to complete it? For if you lay the foundation and aren't able to finish it, everyone who sees it will ridicule you saying this person began to build and wasn't able to finish it.

4:50From Damascus to documentaries, the problem is the same. The filmmakers laid the foundation, they cut the film, they picked the music, they built the tower. And then... They ran into the cost of licensing and they discovered they couldn't finish the film. Counting the cost is really not about money. It's about asking the hard questions before you get locked in. A Galilean carpenter and a veteran ARC Producer separated by 2000 years are saying the same thing.

5:20Estimate the cost. Estimate the cost of what it's going to take to finish. Because if you can't finish, the right move is not to start in the first place, or at least... not in the way you intended. The right move is to start in a way where you actually can finish. So that's the filmmaker lesson. But this lesson doesn't stop with filmmaking. The same wisdom that protects a film from collapsing also protects a marriage, a business, an inheritance, a family.

5:51And unfortunately, I have a little experience here too. My father has Alzheimer's disease and I'm his primary caregiver. And though his father had this disease, he didn't make a plan for what would happen when his turn came. He didn't save money and he didn't decide a course of action. He didn't make a will. He didn't decide even where he wanted to live. So I've had to make those hard decisions. I've had to be the bad guy a lot of times. I felt like I've been paying the price because he didn't take the time to get his affairs in order when he should have.

6:26But my father's not a bad guy. He's a man I love to death, a man with weaknesses and imperfections just like the rest of us, just like me, actually, to be honest. I'm a lot like him. And caring for my dad these last five years has been an honor, actually, and an effective school of reform. My dad built things he provided. He gave freely, he worked hard, he loved deeply, made a lot of money. He also spent a lot of money because he lived in the here and now.

6:58It's not that he was unloving. It's not that he didn't care for his children. He just didn't prepare for the future. He didn't count the cost. He didn't write down what he wanted to happen when he was no longer here to make it happen. He did what unwise filmmakers do. He didn't bring the boring person in at the top, as Teddy called himself last week. So now I'm the editor. I'm the one figuring it out. what to clear, what to drop, and what just can't be saved.

7:28I love my dad. And I'm still, all this time later, five years and counting, cleaning up the part of his life that didn't have a plan attached to it. So here's what I want to say. And I'm saying it as much for me as I am for you. Plan ahead. Count the cost. Do the hard things first. the will, the estate plan, the hard conversation, the ARC Producer in pre-production. This work gets skipped because it asks people to look at things they'd rather not look at.

8:00The end of a budget, the end of a project, the end of a life. The wise ones look anyway. If you found this podcast helpful, please text it to one person. The filmmaker making their first film, the friend who keeps meaning to write the will and hasn't. One share. That's the ask. Hit follow or subscribe wherever you're listening so you don't miss what comes next. And if you want to go deeper with us, join our Patreon community. All the details are in the show notes below.

8:29Oh, and if you're listening on Spotify, scroll down in the episode page. There's a quick poll below and we'd love to have you weigh in. All right. That's it for me today. I'm Christian. This has been Documentary First, the Deep Dive. I'll see you next time.