Disney is losing the war for attention. Can its blockbuster OpenAI licensing deal change the momentum on the battlefield?
Soon, you’ll be able to use OpenAI products, such as ChatGPT and the video generator Sora, to create content featuring Disney characters like Mickey Mouse, Ariel, and Darth Vader.
CEO Bob Iger said the move would let Disney take advantage of a fast-growing area of entertainment.
Iger said initially Disney would “curate some of the videos that have been created on the Sora platform and put them onto Disney+, which we think is a great way to increase engagement with our Disney+ users, particularly the younger users.” Iger said eventually the company wants users to create AI videos within Disney+ itself.
There’s a key word in Iger’s comment that signals why Disney might be particularly motivated to make this deal: engagement.
Time people spend on Disney’s and other leading streaming services has stayed essentially flat over the past few years, despite their increased spending on content, while YouTube and social video have grown. Disney’s share of US TV viewership for its streaming services — including Disney+, Hulu, and ESPN+ — has been stuck at around 4.8% this year, according to Nielsen. YouTube is the top streaming platform on TVs, with a nearly 13% share in October, and its lead has been widening.
Data from analytics firm Luminate showed that engagement with Disney+’s original content fell to a 3% share of US viewing time in the third quarter of 2025. That’s down from 9% three years earlier, the largest decline among paid streamers.
Disney has been highly protective of its famous characters and favors keeping people on its own platforms. This stance has made it difficult for the company to capitalize on the rise of user-generated content. And it’s losing its monopoly on its core constituency, kids, as they increasingly watch YouTube over Disney+.
Hollywood needs new strategies to keep people engaged
Traditional media companies are struggling to grow, so they’re trying to figure out new ways to get people to engage with their content, whether it be games, live events, or fan content creation, media analyst Doug Shapiro, a senior advisor at BCG, recently told Business Insider.
“It’s a zero-sum game they’re losing, and it’s only going to get worse,” he said. “I think they’re all asking themselves, how can they have a deeper relationship with fans?”
Disney invested $1.5 billion in Fortnite maker Epic Games last year and struck a deal with Webtoon to create a new digital platform for Disney’s comics, including Marvel and Star Wars. Outside Disney, Netflix is opening Netflix Houses, mini theme parks in malls that let people enter the worlds of its popular shows. Amazon has backed Fable Studios, a startup that has an AI streaming platform that lets users make their own shows and play with existing IP.
John Attanasio, CEO of Toonstar, a tech-driven animation studio, said Disney’s IP is so popular that the Sora videos could help drive more audience. He thought Disney could potentially charge for access to AI tools on Disney+ or use the Sora videos to discover franchise extensions.
“UGC, when it’s so specific, the reach is limited,” he said. “But when you use known IP, that expands the potential audience.”
Disney fans and Hollywood insiders had mixed reactions to the OpenAI news.
Shae Noble, a Disney superfan in her late 30s, said she could see herself sending birthday messages or making fan videos of the characters interacting in interesting ways — especially if it were integrated into Disney+.
“I’ve already seen some of the negative impacts of AI and people pushing it too far to create harmful images,” she added. “So it’s smart of them to be proactive about it.”
Some in Hollywood worried about the risks to professional creators.
For one thing, the deal puts the emphasis on existing IP rather than making new content, Toonstar’s Attanasio said.
The Writers Guild of America came out swinging against the deal, and said it planned to meet with Disney to explore how much the pact would let user-generated videos use the work of its members.
Sam Tung, a storyboard artist and cochair of the Animation Guild’s AI committee, wondered if OpenAI’s guardrails would be strong enough to protect Disney’s IP, recalling a widely publicized incident earlier this year when Fortnite users used AI to make the Darth Vader character swear. He also doubted the UGC would move the needle on engagement.
“I think what audiences want is high-quality stuff to watch with your family,” Tung said.
James Faris contributed reporting.
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