AI video generation wastes 90% of what you pay for

AI video generation platforms have a significant hidden cost that many users may not anticipate: the payment structure often forces customers to pay for unusable content. Jack Wallen’s experience testing an unnamed AI video generation service reveals that approximately 90% of generated videos were unusable, despite consuming valuable credits. This pricing model creates a substantial efficiency problem that businesses should carefully consider before investing in AI-generated video content.

The core issue: AI video generation services typically charge users based on the number of videos generated rather than the number of satisfactory videos downloaded.

• When testing one such service, Wallen found that roughly 9 out of 10 AI-generated videos were completely unusable for professional purposes.
• Even though most outputs were worthless, each generation consumed paid credits regardless of quality or usability.

The financial reality: Using a simplified example of $100 for 100 credits with each video costing 10 credits, users effectively pay $100 for just one usable video when factoring in the 90% failure rate.

• The company justified this model by explaining that the computational costs of running these AI systems are extremely high and must be passed to consumers.
• When Wallen suggested charging only for downloaded videos, the company declined, citing operational expenses.

Why this matters: This hidden inefficiency significantly impacts the true cost-benefit analysis for businesses considering AI video generation.

• What initially seems like a cost-saving alternative to traditional video production may actually represent poor value when accounting for the high percentage of unusable outputs.
• Companies under economic pressure might mistakenly view AI video generation as a budget-friendly option without understanding the actual cost per usable video.

The bottom line: Consumers should thoroughly test these services through free trials before committing financial resources.

• For many businesses, hiring traditional video production companies might ultimately be more cost-effective despite higher upfront pricing.
• Users need to evaluate whether getting what you pay for only 10% of the time represents a worthwhile investment.