{"id":602256,"date":"2023-12-23T17:05:00","date_gmt":"2023-12-23T14:05:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/more-ai-less-metaverse-a-hollywood-consultants-2024-forecast\/"},"modified":"2023-12-23T17:05:00","modified_gmt":"2023-12-23T14:05:00","slug":"more-ai-less-metaverse-a-hollywood-consultants-2024-forecast","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/more-ai-less-metaverse-a-hollywood-consultants-2024-forecast\/","title":{"rendered":"#More AI, Less Metaverse: A Hollywood Consultant\u2019s 2024 Forecast"},"content":{"rendered":"
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\n Generative AI was one of the biggest topics of debate in Hollywood and beyond over the past year, and heated discussions are expected to continue in 2024.<\/p>\n

\n As the Americas media<\/a> & entertainment leader at major accounting and consulting firm EY, John Harrison tracks changes, opportunities and challenges in the industry closely. \u201cMedia companies in all sub-sectors are actively experimenting with tools and solutions infused with artificial intelligence,\u201d Harrison and his team wrote in his forecast for next year. \u201cThe media industry has been built and rebuilt via M&A over many years. Looking ahead to 2024, company leaders will game<\/a> out all strategic paths forward. However, pulling the trigger on a deal will require conviction on clearing some high hurdles.\u201d\u00a0<\/p>\n

\n Harrison spoke to The Hollywood Reporter<\/em> about the entertainment industry\u2019s AI challenges, the diminished metaverse, and how chatter about a possible deal for Paramount Global has brought media M&A talk back into the spotlight.<\/p>\n

\n What do you expect to be the key theme<\/a> of CES in January 2024?<\/strong><\/p>\n

\n I don\u2019t want to ruin it, but the theme will be AI, just like two years ago everything was about the metaverse.<\/p>\n

\n You also mentioned in your 2024 preview report that AI will continue to be on everybody\u2019s mind. Tell me a bit more about what you are expecting on that front in the new year?<\/strong><\/p>\n

\n There\u2019s a tremendous amount of excitement around AI. And I think media companies, in particular, are embracing it, but doing so in a measured way. So there are a lot of pilot projects, a lot of internal SWAT teams that have been established to really identify what is our strategy for AI going forward, trying to understand what the use cases are for the technology<\/a>. <\/p>\n

\n We bucket things into two categories. One is unlocking productivity. So, how do we take all of our back-office functions and infuse them with intelligence or automation to allow us to run our company more efficiently and effectively, and fundamentally cut costs, but also cut employee time, free up employee time to focus on higher-value projects? There are a lot of, whether it\u2019s in finance or HR, productivity elements. I think that\u2019s more near-term. <\/p>\n

\n And then there\u2019s a lot of focus also around propelling growth. For media companies, that is how do we inject AI and really Generative AI into the creative process? Whether it\u2019s idea generation for stories or, more likely, because there are some protections around that now coming out of the labor deals, can we do faster editing, can we do faster dubbing and versioning? And can we personalize content recommendations more effectively to keep our users engaged, especially on streaming services? So, it\u2019s around productivity and it\u2019s around certain ways to propel growth going forward.<\/p>\n

\n In the Hollywood labor talks, there was fear that AI could replace creatives. So, do you think there is broader consensus now that everyone should ensure it is more about AI freeing up more time for everybody to focus on the creative process?<\/strong><\/p>\n

\n It\u2019s evolving so quickly, so who knows what it will look like 12 months from now, or 24 months from now. But right now, I think there\u2019s a view that there are really interesting tools and solutions that will be based on the technology that will improve processes, especially in media where cash flow is at a premium. Companies are very disciplined about how much money they\u2019re burning on this right now and making sure that they\u2019re just being disciplined with their investment.<\/p>\n

\n You mentioned the metaverse which was all the rage in media and entertainment a while back, but it seems to have gone really quiet on that front in 2023. Am I right or am I missing something?<\/strong><\/p>\n

\n It\u2019s been very quiet. If anything, the announcements out of companies have been going the other way where the metaverse teams that were established two years ago or three years ago, have been either redeployed elsewhere in organizations or they\u2019ve just been eliminated altogether. So I think that the excitement has faded. <\/p>\n

\n I think there are still groups within the strategy teams within the media companies that are keeping an eye on developments, especially with VR and AR and whether there\u2019s some sort of creative element, whether it\u2019s in gaming or sports broadcasting, that could come into play down the road. So companies are keeping a finger on the pulse but not necessarily putting a whole lot of time energy and, most importantly, capital behind the metaverse right now.<\/p>\n

\n What has heated up as of late though has been media and entertainment M&A talk, driven by reports that Paramount Global and its owner National Amusements could be in play. What\u2019s EY\u2019s take on the rationale for further consolidation in the industry?<\/strong><\/p>\n

\n I do believe the rationale remains intact for deals for media companies, you do mass content and mass sports rights and you can inorganically scale direct-to-consumer businesses to get to profitability. Transactions are a great vehicle for cutting costs and driving efficiencies into the business. And as you get bigger, you do improve your positioning versus some of the digital native mega players in the industry. So I do believe there will be a final round of industry consolidation. <\/p>\n

\n I don\u2019t know if it will happen in 2024 or 2025, because there are some hurdles out there. I think there\u2019s an argument for a rationalization of the portfolio [such as the sale of shuttering of small cable networks] in advance of transactions that probably makes M&A easier to execute. We could see some pre-emptive moves around the portfolio, whether it\u2019s asset sales or spins for businesses that are noncore, but still have value. So there could be buyers outside of media, financial buyers for some of these assets that then result in a media company being more primed for a deal. But those carve-outs, those sales and spins are not easy to execute. They oftentimes result in costs, and they have tax consequences. So there\u2019s been a ton of speculation around asset sales, but it\u2019s easier said than done to actually execute those types of transactions. <\/p>\n

\n The other hurdle that everyone is super-focused on is the regulatory environment, both here in the U.S., but really globally. Media is an industry where big deals tend to get a lot of attention from the regulatory authorities. 2024 is an election year in the U.S., the political environment is very uncertain here. So I think any company that takes a move to make a big splash in M&A has to be comfortable that they can navigate through a 12- to 24-month review process that does have an uncertain outcome. And they must be able to navigate that period when you\u2019re probably going to have some inertia because you\u2019re in the midst of a merger review. <\/p>\n

\n Can you do the operating activities you need to do to keep positioning your business for growth while you\u2019re hung up in a merger review? So, there\u2019s a little uncertainty around regulatory and how that impacts the overall deal calendar. <\/p>\n

\n Speaking of uncertainty, the advertising market and its outlook have remained a question mark throughout much of 2023. What\u2019s your expectation for 2024?<\/strong><\/p>\n

\n I think there\u2019s a little bit more clarity around the trajectory of the macro backdrop, or the economy. And the risk of a hard landing, at least based on how our economist is looking at the marketplace, the risk of a hard landing has been reduced. So there\u2019s a view that the consumer is in a better spot, and the broader economy is in a better spot, certainly than people were thinking six to 12 months ago. <\/p>\n

\n From an advertising perspective, marketers want to reach consumers in a number of different ways. There\u2019s real concern about the health of the linear ecosystem in terms of viewership outside of live sports, which continues to be a massive draw for advertising. And the ad services from a streaming perspective have yet to scale. So, overall, there are plenty of outlets for advertisers to reach consumers, but it\u2019s getting more and more difficult to reach them in a scaled or broad-reach way. <\/p>\n

\n Anything else you feel is important to note?<\/strong><\/p>\n

\n In terms of the economy, the risk of a hard landing, like we talked about is, is lower. But the reality is that there\u2019s been massive inflation in entertainment. Everything requires a subscription, going to the movies<\/a> with your kids is $100, if you go to a game or a concert, it could be multiples of that. And I think media companies are very aware that media and entertainment spending for consumers, fundamentally, is discretionary. And so I think that the 2024 focus on bundling, on promotions, on innovative partnerships to really highlight the value of entertainment content, alongside another part of a bundle, whether it\u2019s wireless service, or e-commerce or something, will be creative. There\u2019s going to be a lot of very creative structuring in the offering and the value that\u2019s delivered to consumers. That will be through commercial partnerships, and it could ultimately drive strategic outcomes for these companies as well.<\/p>\n<\/p><\/div>\n

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Generative AI was one of the biggest topics of debate in Hollywood and beyond over the past year, and heated discussions are expected to continue in 2024. As the Americas media & entertainment leader at major accounting and consulting firm EY, John Harrison tracks changes, opportunities and challenges in the industry closely. \u201cMedia companies in…<\/p>\n","protected":false},"author":1,"featured_media":602257,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.hollywoodreporter.com\/wp-content\/uploads\/2023\/12\/GettyImages-83832815-H-2023.jpg?w=1024","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[124783,141199],"class_list":["post-602256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-mediaa","tag-international","tag-openai"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/602256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=602256"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/602256\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/602257"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=602256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=602256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=602256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}