#59 - Reality Check

After months of hype and inflated expectations, generative AI is undergoing a bit of a reality check. User numbers have declined , analysts question its business viability and even tech leaders are uncertain if they can achieve the standards set for generative AI: accurate, creative and all-knowing.

That disillusionment is a natural phase of the hype cycle and it’s mainly a mismatch of expectations and what the technology can deliver. The results of generative AI are still inconsistent and far from reliable.

However, despite these current challenges, the potential remains vast. Already today generative AI serves as a brainstorm partner, a format converter, a coding assistant, and so much more. That’s not going away and will only improve. The real promise is in what it unlocks rather than what it replaces.

A prime example is Google Labs’ recent experiment, TextFX . It’s designed to help rappers, writers, and wordsmiths. Not by writing songs but as a playground of creative text and language possibilities.

IN FOCUS/AI

In the race for AI innovation, the initial leaders are gradually being overtaken by Big Tech/Media who are using all their resources.

• Apple is spending up to 22.6$ billion in research on AI and is reportedly developing an AI assitant to run locally on your iPhone .
• Meta is preparing chatbots with different personas .
• Disney launches an AI taskforce .

Tech companies are also looking for new ways to continue using data from the web undisturbed to train their AI models.

• OpenAI launched a new web crawler called GPTBot to browse the internet and collect information. Publishers who prefer to block this are advised to add a line of code to their site.
• Google says that AI systems should be able to mine publishers’ work unless companies opt out.
• Google is also introducing an new experiment called “SGE while browsing,” . It basically will summarize articles for you. It is up to publishers to mark their content as paywalled content.

Meanwhile publishers are trying to negotiate with AI companies over the use of their content. Notable absentee from the table is the New York Times who want to go their own way and are also considering legal action against OpenAI.

AI/TOOLS & RESOURCES

• OpenAI's New Tools: GPT-4 is being explored for content moderation .
• AI Guidelines for Journalists: The Associated Press updated its standards to guide journalists on AI coverage.
• Google's AI Initiatives: Google has released an AI handbook for marketeers.
• McKinsey's Digital Insights: McKinsey reviews the state of AI.

VIDEO

After years of discounted subscriptions, streamers now focus on profitability by trimming expenses and increasing prices.

• Major streamers plan to raise ad-free tier prices by around 25% in the next year.
• Disney has already doubled the cost of Disney+ from its 2019 price of $6.99.

To compete with Netflix, RTL launches a new "all-inclusive" platform , promising German subscribers a one-stop-shop for video, live-sports, music, podcasts, audiobooks and digital magazine subscriptions.

In the US, traditional TV viewership has dropped for the first time below 50%. According to Nielsen, streaming now represents 38.7% of Americans’ viewing time. That’s a paradigm shift.

Meanwhile in the UK, fewer households have subscription streaming services for the third quarter in a row, dropping below two-thirds for the first time in two years, according to new data from Barb .

AUDIO

Google and Universal Music are discussing licensing artists' voices and melodies for AI-generated songs. This move comes as the music industry deals with "deepfake" songs created using AI that imitate artists' voices without their permission.

And a new Spotify's study on so-called super-listeners finds that just 2% of fans drive an average of 18% of all streams for an artist on Spotify.

NEWS

The New York Times has revealed a remarkable 9 million digital subscribers . The focus on bundles as a key growth strategy is evident, while getting a standalone news-only subscription from the NYT is getting tougher.

Also:

• How short-form video is helping The Economist gain young users.
• How Buzzfeed is using AI to boost engagement as social traffic wanes.
• The American Press Institute on newsletter strategies to build retention, trust and revenue.

GAMES

Netflix is expanding its reach beyond streaming with the introduction of a game controller app that enables users to play games on their TV screens. This move into gaming is in line with the evolving landscape of digital entertainment, where gaming seamlessly intersects with various other categories.

Notably, BBC News' flagship podcast, Newscast, has ventured onto Discord, a platform typically associated with gamers . This move has enabled real-time interactions between hosts and their audience, influencing on-air editorial decisions.

Meanwhile, Snap Inc. is introducing a groundbreaking feature called "City Scale," allowing to add interactive layers over buildings and locations, blending augmented reality and location-based experiences.

SHORT

• TikTok ads AI labels and is making its algorithm optional for users in the European Union.
• Meta, Microsoft, and Amazon are working together to disrupt Google Maps.
• Google says 2 billion logged in monthly users are watching YouTube Shorts.
• Twitter's rival Threads is already unraveling.
• The number of paid subscriptions managed by Apple (1 billion with a 71% profit margin ) is now twice as many as the number of subscribers to Disney+, Netflix, HBO combined.

TRENDS, SHIFTS & IDEAS

The values gap: The?World Values Survey Association has released the 2023 edition of its famous World Values Map plotting?traditional values versus secular-rational values?and?survival values versus self-expression values. The latest edition seems to indicate that Western values are steadily diverging from the rest of the world’s.

The racial generation gap: Gen Z Americans will be the last generation with a white majority in the US and will give way to a post-2012 “majority minority” generation Alpha, according to a?new study ?of updated?US census data .

The media gap: The latest UK Media Nations report reveals that 16-34-year-olds spent 28% of their video time with broadcasters. At the other end of the spectrum, among adults aged 75+, broadcaster content accounted for 91%.

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That's it for this extra long edition - feel free to share it with friends and colleagues.

Ezra