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Thursday, April 19, 2018

TECH SPECIAL .....How do emerging technologies affect the creative economy?


How do emerging technologies affect the creative economy?
Research suggests some ways artificial intelligence, augmented reality, virtual reality, and blockchain are reshaping creative work.
New technologies are reshaping the way we live and work, and their effects naturally touch the creative economy—art, journalism, music, and more. As artificial intelligence (AI), augmented reality, virtual reality (VR), and blockchain continue to emerge as powerful forces, could they be used to greater benefit?
Our paper, Creative Disruption: The impact of emerging technologies on the creative economy, presents the findings of a joint project, conducted by McKinsey & Company and the World Economic Forum, which studied the impact of these technologies on the creative economy. The project team conducted more than 50 interviews with experts from Asia, Europe, and North America, as well as three workshops in China and the United States with World Economic Forum constituents. Given the varying maturity of the different technologies, it is too early to state definitively how they will change the creative economy. Instead, our paper outlines opportunities and concerns for each technology and presents suggestions for where attention could be concentrated. The rest of this article, extracted from the full report, summarizes some of our key findings.
Artificial intelligence is changing value chains for creative content
Exciting developments using AI have been seen throughout the creative economy. Many take advantage of progress in machine learning to analyze huge data sets to learn specific behaviors, thereby allowing computers to recognize patterns and “learn” new actions without being explicitly programmed.
AI is helping creators to match content more effectively with audiences. Algorithms based on neural networks learn and classify a user’s preferences—from movies streamed on Netflix, music listened to on Spotify, or products purchased on Amazon. Providers can then recommend content tailored to a specific user.
AI aids production itself by performing tasks that are too difficult for humans. In advertising, it is used to contextualize social-media conversations to understand how consumers feel about products and to detect fraudulent ad impressions. Services such as Amper or Jukedeck compose music with AI, enabling small-scale creators to use high-quality music for their podcasts, videos, and games at low cost. Automated mastering software such as Landr provides near-studio-quality processing and rendering for between $50 and $300 a year.
In particular, AI that generates text is widespread in journalism and used by publishers to expand the range of offerings. The Associated Press has used AI to free up around 20 percent of reporters’ time while increasing output tenfold. The Washington Post developed its own tool, Heliograf, to cover sports and political news. In its first year it generated about 70 articles a month, mostly stories it would not have dedicated staff to.
More disruptively, machine learning has begun to create original content. The implications have been felt across multiple industries. In music, AI has produced instrumental sounds that humans have never heard before. The same team taught a neural network to draw sketches of animals and objectsand generate sophisticated images from photography. In fashion, researchers have generated new designs. And in film, scripts have been written, complete with stage instructions, for a science-fiction movie.
Other technologies have the potential to disrupt the value chain, though it will take time for the full implications to emerge. Notably, augmented and virtual reality offer an entirely new medium for creators to work with. Because this technology has the potential to become the “envelope” for all content, it is likely to redefine narrative conventions that have existed for decades. Other benefits are detailed in the full paper.
At the monetization phase, blockchain has the potential to change the level of control artists have over their work. The technology could allow artists to program their intellectual-property rights, revenues, and royalties into smart contracts that quickly and transparently allocate revenue to contributors. By removing the intermediaries between artist and consumer, blockchain may solve data and money issues in creative content—basing precisely how much to pay artists on actual consumption and eliminating complexity in paying them. The technology could also affect production rights, third-party monetization, and data transfer of creative work, enabling the repurposing of creative content while safeguarding the intellectual property of artists.
Impressive technology is transforming creative experiences
Content at the point of consumption is being dramatically altered by immersive technology. According to one poll, 46 percent of audiences associate virtual reality with novel experiences and 60 percent with high-end gaming. But artificial and virtual reality have the capacity to provide truly transformative experiences by promoting new and meaningful feelings, skills, and understanding.
Immersive media could transform content as wide ranging as humanitarian stories and workplace-diversity training by providing users with situational perspectives that can help avoid stereotypes and false narratives. Other studies have detailed how experiences of content change when participants use different immersive devices. The right combination of story and device could make content more effective than it would be if presented through traditional media.
Many high-end immersive devices currently require high-spec stationary computers to power them, at a cost of several thousand dollars. With predictions of VR headsets declining in price by about 15 percent each year and becoming untethered to PCs, it is conceivable that immersive technologies will become progressively more available to mass-market consumers. According to one VR filmmaker, this could herald a new way of remembering, not just creating. “Think of everything you forget about a birthday party when you’re a kid. [With widespread VR content capture], the rig would capture everything…. It is going to be interesting to see what happens when we aren’t able to forget anything anymore.”
However, this promise may be challenged if our dependence on mobile technology is replicated with AR and VR. Evidence from the past decade shows that while our overall leisure time is increasing, we are spending more of it using screen-based devices. Smartphone users interact with their devices an average of 85 times a day,  and 46 percent report they could not live without them. Potential overuse leads to other concerns and might also affect the creative economy. Studies have shown how off-screen performance is interrupted by digital devices, and recent research found that just the presence of a smartphone can reduce cognitive capacity. Immersive devices, which could be at least as engaging as smartphones, may end up being inhibiting.
The extent of the problem is starting to be acknowledged by social-media companies. Facebook has highlighted research showing how social media can affect well-being and suggests that changing user habits may help limit negative effects.
The creative economy and the platform economy are converging
While these technologies have varying potential to change how content is produced and consumed, they are being applied in a dynamic environment. Publishers have used technology to find bigger audiences for their content but have less direct control over how that content is discovered. Instead, technology platforms are the main referral sources for digital publishers, with Facebook and Google responsible for about 70 percent of online referral traffic. This relationship is affecting both the editorial elements (what type of content is seen and why) and monetary elements (where the revenue accrues) of information and entertainment content.
On the editorial side, technology platforms can influence—intentionally or not—the types of content that flourish. Companies provide incentives, including money and advice, which sway publishers toward creating content that works well on their platforms. This is not always content with high artistic or civic values but, rather, content that is likely to spread quickly online.
Proprietary AI algorithms ensure that certain formats are prioritized in consumer searches and feeds. Facebook and Google, for example, have developed technology that reduces loading times for content, but the technology requires that content adhere to its standards. In doing so, the platforms exercise “explicitly editorial” judgments on content and design standards—decisions that used to be the province of traditional media. 
The monetary benefits of this new relationship do not accrue entirely to content creators and publishers. Five companies take almost 80 percent of global mobile-advertising revenue, and by some estimates almost 90 percent of the growth is going to just two companies, Facebook and Google.
It is uncertain whether this relationship between publishers and platforms will continue; some adaptation is happening. But the status is clearly changing, and in the process the responsibility for damaging content is moving away from publishers and toward other entities. One of the challenges of AI is that it lacks a conscious will and is unable to explain its output. Instead it must rely on the data it receives and the algorithms used. This may seem trivial in the context of machine-generated music or art. But when the technology can determine what editorial content appears in front of users, the ability to inform and shape public opinion grows, and the potential risks of opacity in decision making become bigger.
As demonstrated by the disinformation and misinformation that affected various elections in 2016 and 2017, the platforms are struggling to respond. They have made progress in supporting initiatives that address media literacy and provide resources for quality news companies to develop better content. However, it must be asked whether certain types of content persist because the current business models favor them. At the start of 2018, perhaps in recognition of the issue, Facebook announced a change in its News Feed to prioritize content from family and friends in place of brands, businesses, and media.
A parallel trend is the use of mobile-technology design techniques that may have unfavorable effects on users. Software designers often employ user data to personalize services and expand businesses, and that in many cases has made content more useful to consumers. The most successful companies have been able to do so rapidly. As a result, companies have an incentive to keep users engaged with their websites and apps in order to collect more data. Engineers combine data-driven behavioral insights with psychological techniques to nudge and persuade individuals to spend more time on their devices. Academics and industry insiders have detailed examples of persuasive in-software design. This is being driven by AI but has applications across a number of different mediums and could influence the way that software is designed for immersive technology.

If the creative economy is to benefit society, the policies of the public and private sectors must align with consumer interests—something that can be achieved only through conversation and collaboration. This is easier said than done; in the full report, some common ground is identified as a potential starting point for discussion.
By Claudio Cocorocchia, Jonathan Dunn, Stefan Hall, and Ryo Takahashi
https://www.mckinsey.com/industries/media-and-entertainment/our-insights/how-do-emerging-technologies-affect-the-creative-economy?cid=other-eml-alt-mip-mck-oth-1804&hlkid=e2902adc873d429e811b590a5aa61fed&hctky=1627601&hdpid=1cb9540b-92e8-4260-8558-944eac0ec900

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