Netflix doesn’t think about its audience in terms of traditional demographics, instead it aligns them with ‘taste clusters’, which are formed by thousands of metadata tags on its programmes.

We have replicated Netflix’s approach to content analysis: layering its ‘mood tag’ and genre metadata with viewing data to identify what makes a Netflix hit.

Suspenseful, dark scripted dramas perform best globally, licensed high-volume sitcoms drive viewing in the UK, while unscripted TV has thus far underperformed.

AI integration into production tools throughout media industries will deliver increased productivity for professional content creation. Generally available tools will also improve quality and production speed for individual user-creators.

Roadblocks include the uncertain copyright status of models and their outputs, attitudes of creative workers and consumers, and the AI tech underdelivering versus what was promised. The need to integrate new tools into existing processes is perhaps the biggest brake.

There are stark differences by sector: the opportunities are greatest in games, where costs have ballooned and software engineering is core. Marketing is furthest in exploiting AI, while audiovisual production is more cautious.

On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Salesforce, the Financial Times, and Adobe. 

With over 580 attendees and over 40 speakers from the TMT sector, including leading executives and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry. 

This is the edited transcript of Session Four, covering: artificial intelligence, the new phase of online advertising, and closing remarks. Videos of the presentations are available on the conference website.

On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Salesforce, the Financial Times, and Adobe.

With over 580 attendees and over 40 speakers from the TMT sector, including leading executives and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry.

This is the edited transcript of Session One, covering: the evolution of streaming models, and public service broadcasting in the digital age. Videos of the presentations will be available on the conference website.

There were no flashy announcements this quarter as Disney highlighted its streaming business—the Entertainment component reaching profitability—with its turnaround offsetting the decline in the embattled Linear segment

In a reasonably stagnant UK SVOD market, Disney+ continues to grow household reach and engagement across almost all age demographics. One driver is its top content, which is more likely to be completed and rewatched than competitors'

Disney is searching for new technology leadership. Its current structure is segmented and depowered, requiring a single leader responsible for overarching technology direction to best combat streaming costs and reach platform scale efficiency

Big news publishers are pursuing licensing deals with AI companies, chiefly OpenAI. Not all publishers will see a substantial return; while some news may be important for training AI models, not all publisher content will be

Litigation is a threat point when negotiations stall (see the New York Times), but the copyright status of Large Language Models (LLMs) is uncertain. In the UK, there has been no government intervention (on copyright or otherwise) that could facilitate licensing 

Publishers’ bargaining position is strongest when it comes to up-to-date material that could be important in powering some AI consumer products. They should seek deals to support their journalism, while bearing in mind the risk that new products may get between them and their readers

 

Netflix's Q1 revenue was up 15% YoY (to $9.4 billion) bolstered by firm global subscriber growth and the continued momentum of 'paid sharing'. Operating margin is forecast to be 25% across this year (up from 21% in 2023)—approaching the realms of legacy linear media—but transparency will be diluted as the company stops reporting subscribers and ARPU

UK subscriptions and overall engagement are mostly flat; growth by older viewers is masking declines by the young

Even with the strikes driving viewing towards UK content, licensed programming remains a relatively minor factor in Netflix’s library

Shareholders have voted down director nominees proposed by Trian Partners and Blackwells Capital, providing a convincing, but hard fought, victory for Bob Iger and the current board

The proxy battle surfaced useful ideas and recommendations that Disney should implement: appointing a Chief Technology Officer to the C-Suite would help the company better respond to technology-first competitors and AI

After months of distraction, Disney leadership can now focus on important unresolved issues: completing the acquisition of Hulu, achieving profitability in direct-to-consumer services, and what to do with Linear Networks

News UK and DMG Media’s joint venture to combine their printing operations has been given the green light by the Competition and Markets Authority (CMA), concluding the supply of services to third parties would not be adversely affected                                                                                          

The CMA concluded that the printing operations of the two publishers were not particularly close competitors for third-party customers. Geography and spare capacity—as we have long argued—were far more influential factors                                                                                          

The CMA’s green light is a timely reminder of the importance of industry collaboration for the profitability of the news industry’s print era, with useful indicators for the evolving online market