Jeffrey Katzenberg’s essay on AI and creativity, posted September 23, makes a useful concession. Writing about the theater musicians who fought recorded sound, he says they were right. “Those pit jobs did not come back.” He says much the same about the hand-drawn animators at DreamWorks who never made the move to computers. His conclusion is that each of these fights was settled by the terms.
That is correct, and it is where the harder part starts. A promise of fair terms leaves three questions unanswered. Who controls the use? Who receives the money? Who can enforce the bargain? In the history he cites, the answers were not always the people who did the work.
What he gets right
Katzenberg asks Hollywood to stop spending its energy on making AI go away and to spend it on the conditions of use. He asks the labs to build with credit, consent and compensation for the people whose work trained their models. He says plainly that the content of fairness is a debate still to be had, once everyone agrees there should be terms at all.
The Animation Guild made the same calculation in 2024. Explaining its contract to members, the union said a ban on generative AI was never on offer and would have pushed the work to non-union shops. It bargained over the terms. So the useful question is what those terms let each party decide, collect and enforce.
The bargain of 1909
Katzenberg’s first precedent is John Philip Sousa, whose 1906 attack on “mechanical music” was part of a campaign for copyright reform. In 1908 the Supreme Court held that a piano roll was not a copy and owed no royalty. Congress responded the next year.
What Congress granted was a qualified right. Copyright owners had asked for the exclusive right to authorize mechanical reproductions. The 1909 Act gave them control over the first recording of a work. Once an owner had allowed one, any other manufacturer could record the same composition by paying the copyright proprietor two cents for each copy made.
There was a public reason for the design. Congress was concerned about monopoly control of recorded music, and the compromise did get owners paid. It also put the price in the statute, where it stayed at two cents until 1978.
The model has been considered again. The Copyright Office examined compulsory licensing for AI training in its 2025 report and concluded it would have significant disadvantages, because such licenses fix rates and terms that become hard to undo. Katzenberg does not call for one. He credits Sousa with changing the terms, and the terms that emerged included a rate that did not move for nearly seven decades.
The theater musicians’ union, the American Federation of Musicians, could bargain over recording-session wages, and it set scales for soundtrack work as early as 1928. It had no claim on the use of those recordings in thousands of theaters. By its own count, 22,000 theater jobs were gone by 1930 against fewer than 200 created. A payment tied to recorded music arrived in 1944, after the union refused to record for more than twenty-seven months. The money went into a fund that hired musicians for free public concerts, and the players on the records did not receive it.
Who owns the work
Katzenberg writes that the knowledge the labs need lives in people whose life’s work informed the models. For most studio artists that life’s work belongs to someone else. Under the work-made-for-hire rule, the employer is the legal author and owner of what an employee creates on the job, unless a signed agreement says otherwise. Permission to license the copyright generally rests with its owner.
The arrangement Disney and OpenAI announced in December 2025 shows how that works. It covered generating short videos and images with more than 200 Disney characters. The announcement said nothing about training models, and it excluded talent likenesses and voices. The Animation Guild said its members had never been paid for the licensing of those characters. The transaction was subject to definitive agreements, and Disney exited in March after OpenAI announced it would discontinue Sora. As announced, the proposal would have authorized character generation through an agreement between the two companies.
A studio’s permission to license an artist’s work is not the artist’s consent. Payment to the studio is not necessarily compensation to the artist. Ownership sets that default and nothing more. Writers and actors do not own the films they make either, and they are paid residuals because their unions bargained for them. An individual with enough leverage can negotiate participation in a personal contract.
What the contracts secure
The clearest individual veto in Hollywood covers a performer’s own face and voice. Under the SAG-AFTRA agreement, a producer who wants to use a digital replica of an identifiable actor generally needs that actor’s consent, separately signed, with a reasonably specific description of the use. There are exceptions, including routine post-production alterations.
Synthetic performers, which resemble no one in particular, work differently. There is no individual to ask, so the producer must notify and bargain with the union. If the producer breaks its commitments, the union can arbitrate for damages that are not necessarily limited to what a human performer would have been paid. If bargaining fails and the producer uses the synthetic anyway, the union can arbitrate what payment, if any, is owed. That money, negotiated or awarded, goes to the union’s health plan or a pension plan, at the union’s election. As with the musicians’ fund in 1944, the payment supports the workforce as a whole and does not reach an identifiable displaced worker.
On training, performers and writers have similar terms. When a producer licenses covered work to train a commercial AI system, it owes the union written notice and, on request, a discussion that may include remuneration. The 2026 Writers Guild contract keeps the protections won in 2023 and adds that duty. The guild had gone into talks asking for payment.
The animators’ agreement says a producer may require employees to use any AI system. It also protects them in several ways. Using AI does not reduce an employee’s rights or credit. The producer cannot require an employee to furnish prompts in a way that displaces a covered employee, and it must indemnify employees, subject to conditions, against claims arising from AI use on the job. It must give written notice in advance, and an employee can ask for a consultation about alternatives if the production schedule allows time.
Violations can be arbitrated with every remedy available except an injunction, and the arbitrator has no authority to restrict the AI use itself. A separate article preserves the producer’s “unrestricted right to make technological changes.” It provides displacement pay for eligible employees, separate from dismissal pay, that tops out at ten weeks for twenty or more qualifying years.
One clause in that agreement shows the pattern well. An animator can refuse to have her face or voice scanned, and consent cannot be made a condition of the job. The article grants no corresponding veto over licensing her studio-owned drawings for training.
Katzenberg restates his 2023 prediction that AI could cut the time and cost of world-class animation by as much as ninety percent, and he expects more films and more seats at the table as a result. He may be right about the films. A lower cost of production does not say who receives the savings, which can go to margin, to a larger slate, or to the people doing the work. Agreements like these help determine the workers’ share.
Three questions
I think Katzenberg is right to put the terms first. But if the promise is compensation for creators, payment to the company that owns their work is not enough. The bargain needs to secure a benefit for the people whose work makes the license valuable, whether through individual payments or collectively negotiated funds. Otherwise, the companies have settled their rights without delivering the compensation to creators that Katzenberg calls for.
So I would hold every future promise of fair terms to three questions. They are who holds the right to say no, who gets paid, and who can compel compliance when the terms are broken.
Run on his own cases, the test gives specific answers. In 1909 the owner controlled the first recording, the proprietor was paid two cents, and a court could compel payment. In 1944 a union withheld its labor, a fund was paid, and a contract could compel. Today an animator can refuse the scanning of her likeness without losing the job. The same agreement permits the producer to require her to use AI in covered work.
The Animation Guild agreement runs through July 31, 2027, and either side can serve notice to renegotiate by May 1 of that year. That negotiation is the next concrete opportunity to change these collectively bargained terms. Any promise of fair terms made before then can be put to the same three questions.