A high-profile licensing deal that reportedly collapsed during the guild’s negotiations showed why screenwriters wanted notice written into their contract
Studio AI Licensing Deals: Why Writers Demanded to Be Told
The characters and stories that fill studio libraries were created by writers. The studios own them. As entertainment companies explore agreements with artificial intelligence firms, a question arises that the industry’s contracts were not designed to answer: when a studio licenses that material to an AI developer, do the people who wrote it have any say or any share?
The Example the Guild Cited
The issue became concrete during this year’s Writers Guild negotiations. In an interview with The Hollywood Reporter, guild negotiators referred to a deal between a major studio and a leading AI company, which, they said, had already fallen apart while the guild was in negotiations. They stated that most writers’ works have been stolen to train AI, and that the guild is prepared for the next such deal because the new contract obliges a company to tell the guild in writing when it licenses writers’ work for training a commercial generative system, and to talk with the guild about the licence and about paying writers.
Before the talks, a filmmaking site’s overview of the negotiations had observed that the guild wanted more protection against AI, especially as it saw serious deals with AI companies to use characters its members may have created.
Two Kinds of Use
It helps to distinguish what such licences might cover.
One is training. A studio provides scripts, and perhaps finished films and shows, to an AI developer so that a model can learn from them.
The other is output. A studio permits an AI product to generate new content featuring its characters, for instance allowing users to create short videos with familiar figures.
The first uses writers’ work as raw material. The second produces new material derived from what writers created. Both raise the question of compensation. The second also raises questions of credit and of what is done with a character in the writer’s name.
What the Contract Now Says
As the negotiators describe it, the 2026 agreement adds a notice requirement for training licences and an obligation to discuss payment. It does not require payment. The guild sought that and, according to trade reporting, the studios did not agree.
The earlier provisions remain. AI-generated material is not literary material and does not count as source material, so a studio cannot use generated content to undercut a writer hired to work on a project.
The Writers’ Existing Entitlements
Under long-standing terms, writers have certain rights in what they create even though the studio owns the copyright. A writer who creates an original character that is later used in a new work may be entitled to character payments. A writer with separated rights in an original screenplay has interests in sequels and other derivative uses. Residuals are paid when a work is reused in new markets.
The guild’s argument is that AI uses are a new form of reuse and should attract payment on the same principle. Whether existing language can be read to cover them, or whether new terms are needed, is unsettled and may ultimately be decided by arbitrators or courts.
The Studios’ Perspective
Studios approach the matter as owners of intellectual property seeking to protect and monetise it. From their side, licensing to an AI company under controlled terms may be preferable to having the material scraped without permission. They may also see AI tools as a way to engage audiences. They are wary of commitments to share revenue with talent before knowing what the revenue will be.
Some studios have taken the opposite course and sued AI companies for infringement. The industry has not settled on a single strategy.
Why the Collapse of One Deal Matters
The negotiators’ remark that a prominent agreement had fallen apart is a reminder that this market is unstable. Deals are announced and unwound. Terms are confidential. Writers could easily learn of a licence only after their work had been used. A notice requirement addresses that directly.
What Writers Can Do
Individual writers have limited power over what a studio does with its library. They are not powerless.
In new deals, a writer’s representatives can seek specific terms on AI: consent before the writer’s script is licensed for training, a share of any licence revenue, or approval over uses of original characters. Established writers are more likely to obtain these, and their deals set examples.
Writers who retain rights, for example in a spec script not yet sold or in underlying material such as a novel they wrote, should consider carefully what they grant.
Members can support the guild’s enforcement by reporting what they learn.
Beyond Contracts
Legislation and litigation may prove as important as bargaining. Lawmakers in several jurisdictions are considering rules on transparency in AI training data. Court rulings on whether training is fair use will affect what AI companies must pay and to whom.
A Question of Principle
Underlying the legal detail is a simple idea that has guided writers’ organisations for decades. When a writer’s work earns money in a new way, the writer should share in it. That principle produced residuals for television reruns, home video and streaming, each after a struggle. AI licensing is the latest test.
The 2026 contract did not secure the share. It secured the right to know and a seat at the table when it happens.
To End Lightly
What studios do with beloved characters has long amused onlookers. The London Prat joins in with its British satirical news on studio licensing and London satirical news about cartoon characters. Bohiney Magazine covers Hollywood’s side.
SOURCE: https://bohiney.com/