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AI Set to Become ‘Single Biggest Driver of Change’ in the Industry, Says AlixPartners’ Mark Endemaño, but Keep an Eye Also for ‘Spandex and Spray Tans’

  2024-04-09 varietyMarta Balaga52140
Introduction

It’s confirmed: AI is going to be “the single biggest driver of change facing the industry,” said Mark Endemaño at MipTV

AI Set to Become ‘Single Biggest Driver of Change’ in the Industry, Says AlixPartners’ Mark Endemaño, but Keep an Eye Also for ‘Spandex and Spray Tans’

It’s /confirm/ied: AI is going to be “the single biggest driver of change facing the industry,” said Mark Endemaño at MipTV.

According to AlixPartners’ managing director, the creative industry is “leading innovation and looking for ways to make it work.”

“Seventy-two per cent of execs say that they are ‘early adopters’ and as an industry, totally, 25% expect to take up with AI in the next year. There are inevitable employment challenges on the horizon, however. The estimate is that by 2026, up to 21% of jobs could be impacted in some way in the film, TV and animation space.”

Mentioning OpenAI’s introduction of the Sora text-to-video model – “It’s right for all these shockwaves to resonate” – Endemaño also mentioned another company, currently developing a proprietary tool that “goes from storyboard animatic to a 7-minute animation with a click of a button.”

“That is mind-blowing. They are on track to deliver it in July. It’s incredibly exciting and pretty scary as well.”

Just like the entire conversation surrounding AI at the moment.

“What’s the reality of adoption of AI? I think junior entry roles will be the most impacted, and that’s our training ground. That’s how we bring people in! On the other hand, young people will be the first to adapt to using this stuff and these tools don’t operate themselves…Yet.”

“If I think of it optimistically, if we are automating the boring stuff, then we have more time for the truly creative things. But there needs to be some kind of legal reckoning. Is this effectively industrialized plagiarism? Is this the world’s biggest IP heist happening in plain sight? I do think it’s true and I have felt that for several years.”

The former Disney exec Endemaño also opened up about other challenges in his keynote speech “Back to the Future – Bridging the Past and Present to Shape Tomorrow’s TV Landscape.”

“I called this ‘Back to the Future,’ because I do think that so many of the current hot topics we are seeing right now are reflective of the topics that were there in the past. They are not exactly the same, but there is a strong indicator of what’s to come,” he told PvNew.

“We seem to be at a pivotal point in the industry. From the production perspective, it’s clear that the content market is starting to move to a steadier state. The SVOD expansion is slowing and major streaming markets are approaching maturity – in North America, it’s now at 73% of the penetration of the marketplace. In Western Europe, it’s at 55%.”

Which is why streamers are looking to expand into areas where they can get more success.

“There has been a 29% decrease in premium pay TV in the U.K. But actually, all the streaming services are pay TV! We just substitute one type of it with another. Data shows that in Western Europe, on average, there are 2.6 subscribers per household. In North America, it’s 4.4. When you have higher prices and subscribing to one service is not enough, all of this paints a picture of a market that’s at its tipping point.”

From 2014 to 2023, the content accessible to the average person in the U.K. grew 12 times, he noted. But sometimes, “infinite choice can be no choice at all.”

“The U.S. majors have gone from being ‘Content Kings’ to loss-making streamers. The content studios have surfed the way of ‘Peak TV’ and now are worried about what happens on the other side. The platforms have gone from taking all the risks in licensing content and now are aggregating apps.”

Possible solution? More effective distribution through partnerships.

“The studios going into the streaming world were really quite naïve. There was this sense they would be able to go directly to the consumer. The truth is, it just doesn’t work that way. There is a symbiosis that’s required and that’s the direction of travel.”

The return of windowing also can’t be ignored.

“once upon a time, in 2015, when I was running international distribution at Disney, my job was to get as many people to see Disney’s content and to make as much money from it as possible. Then, we could hear a handbrake screech. I had to tell my teams not to do three to four year deals, but to do one-year deals or no deals until we decide exactly when we will be entering these markets.”

“Things are becoming more pragmatic again. Is streaming consolidation inevitable? There comes a day of reckoning when you have to be able to economically prove that this makes sense.”

“Social media went from nothing only 10 years ago to right now being at 160 billion. The anticipation is that in three years, it will be a quarter of a trillion. Meanwhile, broadcast TV and pay TV are melting ice-creams. The advertising market continues to be disrupted by the streamers needing to look for hybrid models, and the rise of FAST channels is quite extraordinary. In the U.S. this year, we estimate the revenue to be about 5 billion from FAST channels alone. We have seen that wave move across the U.K. now, Germany and Spain. That trend will continue as well.”

Still, at the end of the day, the challenge remains the same: it’s all about finding the next hit.

“It has always been the classic conundrum for the creative community, but what makes it more challenging now are two big factors: the average consumer’s attention span is shrinking, so the average daily long-form viewings decrease by 21% since 2014. And community viewing has evolved. People still want shared experiences, but there is a 24% decline.”

So what is it all about?

“Spandex and spray tans,” he said.

“We have ‘WWE Raw’ on Netflix – the 10-year, $5 billion deal and the concept of what they call a ‘non-fiction sport.’ It’s a very smart part of their strategy to expand and get past this logjam of subscription saturation. That’s not until January – in the meantime, they have the exclusive Jake Paul-Mike Tyson fight.”

“I love the fact that they said: ‘Yes, we said we are never going to do sport, but what are you going to do?’ But it’s not sport as we know it – they are looking for a different perspective.”

Another example of “spandex and spray tans” concept comes from BBC.

“‘The Gladiators.’ It’s all about proven IP and about family co-viewing,” he added, also mentioning “Traitors” and “Death in Paradise.”

“This is not a show you would talk about in the same context as ‘Succession,’ but a hell of a lot more people watch it! It’s not sexy, but it is super successful. And there is nothing wrong with that.”

(By/Marta Balaga)
 
 
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