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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