I envisage a world where your browsing Netflix, and based on past preferences some of the title cards are generated on the fly for you. Then based on what you click, the AI engine warms us and generates the film for you in real-time. Essentially indistinguishable from the majority of Hollywood regurgitation.

And because the script is just a series of autogenerated prompts, its like a choose your own adventure book, you can steer the narrative the way you want if you elect to. Otherwise it'll be good enough to keep most monkey brains happy and you won't even be able to tell the difference most of the time.

I know it's impossible to perfectly predict future technology, but I believe AI will exist alongside traditional filmmaking. You'll NEVER get something with the emotional impact of Up or Schindler's List from an AI. You'll be able to make fun action or fantasy movies though, and like you said, fully customized for the viewer. I imagine it'll be like CGI vs traditional animation now - you only see the latter for passion projects, but for most uses, CGI works well enough.

This is already starting to happen for digital illustration. With better models and enough images saved, you can already train a model to replicate the art created by an artist.