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As the Consumer Electronics Show (CES) approaches in January 2024, industry experts and analysts anticipate that the event will be dominated by discussions and exhibitions related to Artificial Intelligence (<a href="https://www.cryptopolitan.com/ai-conversations-with-art-at-ghent-museum/" rel="noopener noreferrer nofollow">AI</a>). This prediction aligns with the growing prominence of AI in various sectors, with media and entertainment being one of the industries at the forefront of AI adoption.
<h2 class="wp-block-heading" id="media-industry-s-embrace-of-ai">Media industry’s embrace of AI</h2>
John Harrison, the Americas Media &amp; Entertainment Leader at EY, highlighted the media industry’s increasing interest in AI. Media companies are actively experimenting with AI tools and solutions across all sub-sectors, but they are doing so cautiously, often starting with pilot projects and internal teams dedicated to exploring AI’s potential.
Harrison identifies two primary categories for AI application within the media industry:
Unlocking Productivity: This involves using AI to enhance back-office functions, such as finance and HR, with automation and intelligence. The goal is to improve efficiency, reduce costs, and free up employee time for more valuable tasks.
Propelling Growth: Media companies are exploring how AI, including Generative AI, can play a role in creative processes. This includes generating story ideas, speeding up editing and dubbing processes, and personalizing content recommendations to engage users on streaming platforms.
Harrison acknowledges the rapid evolution of AI technology and its impact on media processes, emphasizing the need for disciplined investment in AI projects, particularly in an industry where cash flow is crucial.
<h2 class="wp-block-heading" id="metaverse-fades-into-silence">Metaverse fades into silence</h2>
The buzz surrounding the metaverse, which dominated media and entertainment discussions in recent years, has notably quieted down in 2023. Harrison notes that metaverse teams established by companies have been either reassigned or disbanded, signifying a diminishing interest in the concept.
While some media companies continue to monitor developments in virtual and augmented reality (VR and AR), the excitement that once surrounded the metaverse has waned. The focus has shifted towards more practical and immediate applications of technology.
Media and entertainment mergers and acquisitions (M&amp;A) discussions have reignited, largely driven by reports suggesting that Paramount Global and its owner, National Amusements, may be open to deals. EY’s perspective on the industry’s consolidation rationale remains intact.
The potential to scale direct-to-consumer businesses through mass content and sports rights.
Opportunities to cut costs and drive efficiencies via transactions.
Improved competitive positioning against digital native mega players.
However, Harrison emphasizes two significant hurdles:
Portfolio Rationalization: Companies may need to divest non-core assets or businesses, but executing such transactions can be complex and costly.
Regulatory Challenges: The regulatory environment, both in the United States and globally, poses uncertainties for large M&amp;A deals. The year 2024 is an election year in the U.S., adding to the uncertainty, as regulatory approvals may be subject to a lengthy review process.
<h2 class="wp-block-heading" id="outlook-for-the-advertising-market-in-2024">Outlook for the advertising market in 2024</h2>
The advertising market, which has faced uncertainties in 2023, is expected to gain some clarity in 2024. The macroeconomic backdrop appears more stable, with a reduced risk of a hard landing, according to economic analysis.
However, challenges persist for advertisers:
Linear TV viewership, outside of live sports, has been declining.
Streaming services are yet to provide effective ad services at scale.
These challenges make it increasingly difficult for advertisers to reach consumers on a broad scale. Marketers are actively seeking innovative ways to engage with consumers in a highly competitive landscape.
In response to rising entertainment costs and the discretionary nature of media spending, media companies are exploring creative bundling and partnerships in 2024. This strategy aims to emphasize the value of entertainment content alongside other bundled services, such as wireless or e-commerce offerings. Such partnerships have the potential to not only benefit consumers but also drive strategic outcomes for media companies.

Key Themes at CES 2024: AI Takes Center Stage

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