It’s been a tough year in the media business:  bad ratings, declining revenues, mass layoffs, and unprecedented labor unrest. 2023 will be a year everyone wants to forget, and we still have four months to go.

Much of the tension can be attributed to the industry failing to adequately prepare and adapt to changing viewing habits.  The rise of streaming, at the expense of traditional television and movie theater consumption, didn’t exactly come out of nowhere.  The trends have been evident for years.  Yet judging by the narratives of their CEOs, the major media companies seem to have been caught off guard by these changes and are now at a loss about what to do.

Media CEOs are under a lot of fire these days. If you’re going to sit in the big chair and cash the oversized checks, taking the heat when things don’t go well is part of the deal.  But it’s more than just part of the territory, in this case the criticism is justified. There’s no question that the industry’s current predicament with streaming is in large part the result of failed leadership. 

Amid this chaos, the industry and these CEOs been given a gift.  Right now it doesn’t feel like much of a gift, but for these CEOs it could restore both the financial fortunes of their businesses as well as their tattered reputations.

This gift is the AI revolution, or more specifically the growing array highly advanced applications that make it possible for computers to generate stunningly life-like copy, images, and video.

AI is a huge bone of contention in the writers’ and actors’ strikes.  I bet if the studios could push a button and eliminate AI they would. (Or maybe they would push a button and have AI replace all the writers, but that’s a post for another day.)  It’s causing nothing but headaches.  And I certainly understand the concerns of the actors and writers.  No one wants to be replaced by a machine.  Yet if history has taught us anything there is no stopping the use of technology once it’s discovered.

AI is here to stay and if the industry ignores it like an unwanted guest at a party, or worse, attempts to exterminate it like a kitchen rodent, we will miss a golden opportunity. Unfortunately the industry’s recent track record with technology isn’t a source of hope.

Twenty years ago, traditional media sat back and ignored the threat that search and social media presented. Right under everyone’s noses (including mine, I worked for in traditional media at the time) Google and Facebook wiped out billions of dollars in revenue from traditional publishers and media.  In hindsight it didn’t have to happen. Search is a means to an end for people. It’s useless without the data and content provided by publishers. Think of what the business would look like today if Google, Facebook, and other companies like them had to pay a toll every time their algorithms mined publisher’s sites?

Chat GPT and the other AI platforms are cut from the same cloth as search and social media.  They are advanced, sophisticated software programs designed to fulfill the requests of users.  Yet for all their ingenious coding and algorithms, they are at heart nothing more than dumb machines.  They require data and information to work their magic. Without them they can’t learn.  And none of that data belongs to the technology companies that are creating these astonishing AI tools. 

Perhaps this isn’t the best metaphor, but it reminds me of the auto business.  Mercedes, BMW, and Ford can build the most advanced, desirable cars of all time, but without fuel they’ll never get out of the garage.

The massive libraries of intellectual property owned by the studios, publishers, creators, and sports leagues represent the most valuable source of data for AI.  They are akin to the ever-abundant oil fields of Saudi Arabia, to carry forward the car metaphor.

If Microsoft, Google, Apple, or any of the tech companies pioneering AI today want to access that data they should have to pay, and pay big.  Without it all their coding wizardry isn’t much more than an interesting science experiment.

Media CEOs can’t fix cord cutting and despite what they say publicly everyone in the business knows that streaming will never be as profitable as the old business models.  The business is shrinking.  But AI represents a massive growth area.  I’d much rather see Bob Iger, David Zaslav and the other CEOs focus their considerable talents and energies on AI as opposed to the streaming business. 

The strategy for success in the streaming business isn’t a mystery – higher subscriptions prices, more advertising and disciplined content investments.  I’m not sure the boards of the major media companies need to allocate eight, and sometimes nine, figure payment packages to their CEOs to figure this out.  It would be much more worthwhile to their long-term financial prospects to get a strangle hold on AI now, before it’s too late.

AI also requires a change in mindset for those of us outside the boardroom.  Too many creators look at it as the enemy.  As I said, I understand and sympathize with this position.  Unfortunately, there is no escaping that the combination of reduced content budgets, which is inevitable given streaming economics, and the march of technology will lead to less job opportunities.

But while AI may cost some people their jobs, it also provides an unprecedented opportunity for those creators who master the technology to dramatically improve their productivity and value.

Here’s one example AI experts have talked about: The New York Times could build a proprietary version of ChatGPT, or some other large language model AI tool, for its most popular columnists to help increase their productivity.  Maureen Dowd could publish twice as much as she does now if she used ChatGPT to create first drafts.  It wouldn’t surprise me if the Times already is working on this.  It also wouldn’t surprise me if Maureen Dowd and their other top columnists completely reject this idea.  (For the record I have no idea how Maureen Dowd views AI, I’m just using her as an example.).

But make no mistake, there will be many writers and creators who won’t hesitate to use it.  Those who master AI will be the ones most in demand, not just in the future, but increasingly the present.  As a group we in media need to stop thinking of AI as some sort of dystopian Borg nightmare and learn how we can master it to make us better.

To be clear, the industry must set clear guidelines protecting people’s images, likenesses, and work.  And it would be a shame if the technology diminishes creative risk taking by relying on past franchises and long dead actors.  I love Mission Impossible as much as the next person, but I have no interest in seeing an AI-generated Tom Cruise in MI 15. 

The industry has a history of coming late to the technology party, largely to protect vested interests.  Many talented people in the business have paid dearly for the missed opportunities of the past. Yet history has brought us to another inflection point with AI, a chance at redemption for media CEOs, if you will. Handled properly, AI can lead to vast value creation for everyone involved.  It is there for the taking but only if we are willing to act boldly and decisively now, before the moment passes us by.