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Conversations about the media economy, and how to think clearly when things get messy.
This is Puzzle, Problem, Mess. Conversations about the media economy and how to think clearly when things get messy. In this episode, I'm delighted to bring you a conversation with Doug Shapiro about the foundational changes underway in media. Doug is a US based independent consultant and adviser, writer, speaker, and lecturer, as well as a senior adviser at Boston Consulting Group. He has spent his entire career in and around the media business, including fourteen years as a media equity analyst and twelve years at Time Warner and Warner Media.
Dan Fahy:Doug has also just finished work on a book, Infinite Content, AI, the Next Great Disruption of Media and How to Navigate What's Coming, which is due to be published by MIT Press in early twenty twenty seven. Watch out for that one. Doug also writes The Mediator on Substack. I'll put a link in the show notes. And if you do only one thing after listening to this episode, you must take a look at Doug's Media Mental Model, which I'll also link to.
Dan Fahy:It's an exceptionally useful catalog of structural changes underway in the media business, bringing together Doug's writing across the different forces reshaping the industry. Do check it out. And now here's Doug Shapiro. Doug Shapiro, thanks very much for joining the podcast today.
Doug Shapiro:Yeah. Well, thank you for having me.
Dan Fahy:You've mentioned in recent conversations you've had that some of the disruption we're seeing today is in fact sort of a lagging indicator of the prior disruption in content distribution. And you're talking about changes that are ahead of us being much more profound than perhaps the changes we've seen in the last decade. Do you want to talk a bit about that? Why is that?
Doug Shapiro:Sure, of course. Yeah. And I think that is a good place to start. So the reason I write that and say that is because of the breadth of what Gen AI can do, which I don't think is necessarily well understood. I think a lot of the focus is on a relatively important but a relatively narrow application.
Doug Shapiro:So to your point, current state of media was really defined by two technological innovations, two related ones, digitization and the internet. And everybody knows that. And before digitization, there was no common language between different forms of media. They were all siloed. A radio signal doesn't talk to newsprint, doesn't talk to a movie reeler or whatever.
Doug Shapiro:And so each form of media had to have its own supply chain and form factor. Yeah, you watch the movies in a movie theater and listen to the radio on radio and all that. And what digitization did was it created this universal language for all media, and the internet created a universal transport mechanism, a universal network. And that really changed the architecture of the media business as we know it. And there were a lot of changes associated with that, but the most important one is that it caused the cost of distribution to become effectively free.
Doug Shapiro:It dramatically reduced the cost of distribution. And of course that birthed Netflix and YouTube and TikTok and Steam and Spotify and all of the things that currently compete for our finite time and attention. But the thing about digitization is that it's only concerned with the syntax. It's only concerned with the grammar or rules for how information is represented. It doesn't care at all.
Doug Shapiro:It's very intentionally agnostic to what the information means. And so if you think about, I don't if this is necessarily the right word, but if you think about the primitives, the things you can do with digitization or what I call computable info, what happens when information becomes computable? There's a pretty small list actually. It's things like you can copy it, you can store it, you can compress it, you can transmit it. There's this, like I said, relatively small number of primitives.
Doug Shapiro:So if you think about GenAI in the context of that, GenAI at... Operates at a higher level of abstraction. It is very much concerned with what information means. That's what, Gen AI models are maps of meaning. That's basically what they are, is that they are a mathematical representation of meaning, which is inferred from the relationships in the data or the patterns and structures within the data.
Doug Shapiro:And so when you have machines that understand, or what I refer to as computable meaning as opposed to computable information, the list of primitives is actually very long. It's very much open ended. And most of what people focus on is the create primitive, that you can make new stuff for very low cost. But it's not just create, it's create and coordinate synthesize and summarize and convert and translate. And you start making this list, then you realize that there isn't really a logical end to it.
Doug Shapiro:Each of those primitives have potential implications for the media business. And so we talk a lot about the create primitive, again, the idea that GenAI is gonna reduce the costs of creation, but it's actually only one application of it. So that's what I meant at the very beginning when I said, I think that a good place to start is to understand that just the sheer breadth of how much generative AI may change the media business.
Dan Fahy:Great. And just one other thread on that before we move into the sort of broader topics. You've also mentioned that that AI might bring about a change in preferences. You say one of your themes is disruption brings about changes in preferences and taste. Do you want to talk a little bit more how can you see any early signs of what preferences this might be bringing about or changes in preferences in relation to TV and film?
Doug Shapiro:It is a general a general consequence of disruption is that it often changes the consumer definition of quality in a way that can be surprising, I think, especially for the people who have been in a business or a domain for a long time. And the analogy that I always use is Airbnb, that when it came out, it just seemed like a really bad idea that anyone was gonna pay to sleep on someone else's couch. But what happened was over time, Airbnb introduced all these new attributes of quality, things like a quaint neighborhood or a working kitchen or more storage space or maybe a barbecue in the backyard or whatever it is. And for a lot of people, it actually changed their definition of quality in leisure travel and leisure lodging. And the first place they look when they go on a vacation or whatever, the first place they look Airbnb, right?
Doug Shapiro:So that's an example of a case where the definition of quality has shifted. And that has been happening in TV and film as well. It gets this question of how you define quality. Is quality some sort of platonic ideal of what is good or what is bad that someone, some expert or somebody has decided? The way I define quality is quality is revealed preference.
Doug Shapiro:Quality is what people actually do when given a choice. And so when you look at the shift of consumption away from, let's call it corporate media toward creator media, By inference, we're seeing a shift in the consumer definition of quality. And I used to work at Time Warner and we owned HBO. And HBO used to be the sort of prototype for quality in television. It had high production values, high budgets, well known talent.
Doug Shapiro:And those things are all still important, but now there are these new attributes of quality that have been introduced by the creator economy, things like authenticity, relatability, digestibility, meaning, is it low friction to find it? I don't know what you call that, discoverability, is it relevant to my sub community, whatever it is, there's all these new attributes of quality, a lot of which hinge on what I would call authenticity, parasocial relationships, community, stuff like that, some heavy social component to it. And so the unknown question is now we move forward and we're going to have AI affect the media business. Will it also change the consumer definition of quality? We don't know that yet.
Doug Shapiro:But one the interesting things about generative AI that I think also doesn't get discussed very much is the idea of new or Gen AI native use cases or applications, right? Most of what we talk about is still how do we use this technology to do the same thing we do today, but just for less money, but it's gonna enable all kinds of new stuff too. It's gonna enable when you can render video real time. You can have emergent stories or interactive personalized contextual stories. You can have multimodal entertainment where you have a book and you press a button and it's a movie, you press a button, it's a podcast, or you're listening to it as a podcast in your car, you go home and you could think of all these kind of fanciful things and who knows what's actually gonna achieve traction with consumers.
Doug Shapiro:But yeah, there is definitely the opportunity and the likelihood that GenAI native applications are not only going to compete on the same footing as existing media, but also will introduce new attributes of quality that are that can be uniquely satisfied or uniquely fulfilled by these new forms.
Dan Fahy:Great. And you mentioned your time at Time Warner, and I'm particularly interested in your view on how what you term the traditional intermediaries, how they fare in this. But your mental model on Substack is awesome. There's so many jumping off points there. I'll just choose a couple of those.
Dan Fahy:You're talking about this emerging abundance of content as the cost of content production sort of collapses in a similar way that content distribution cost collapse, leading to an abundance of content, and that will create new scarcities. And it's around those new scarcities that premium value can be built. Do you want to just expand on that a bit more, the notion of sort of emerging or reinforced scarcities as abundance, rolls out?
Doug Shapiro:Sure. And that... That's also... That concept is definitely not, specific to media. That happens all the time.
Doug Shapiro:You can probably go back to, you know, prior to the industrial revolution, manpower was scarce and land was abundant. And then after the industrial revolution, manpower was abundant and land was scarce. It was always this flip flopping of of what is abundant and and scarce. So when one thing, in... When one input into the value chain becomes abundant, the other, what are...
Doug Shapiro:What economists call complements, the complements around that good become scarcer and more valuable. And so if you think of examples like in agriculture, stick with that theme, when crop yields rose, food became more abundant. And so value shifted into distribution, food processing, brands, right? If you think about digital photography, digital photography basically made the cost of photography go to zero, right? And value shifted into what became relatively scarce, which was editing software, storage, and of course, photo sharing networks.
Doug Shapiro:Instagram has been a massive beneficiary of the plummeting cost of photography. So that's the general idea. The general idea is that when one thing becomes abundant, other things become scarce.
Dan Fahy:In relation to traditional intermediaries, how do you see that playing out? What are the things that traditional intermediaries have today that become more scarce? Or what are some of the emerging scarcities that you think traditional intermediaries are best place to own and chase after and try and unlock some of that premium value?
Doug Shapiro:Yeah, way that I think about the emerging scarcities is not only what becomes newly hard, what becomes newly cheap or what becomes newly possible. And so you can think about in a world of abundant content, some things become relatively scarce, like human provenance, proof that a human made it, or authenticity, or a brand, or the ability to market it. I mean, there's a couple of obvious things. One of the things I talk about is the idea of professional validation. So maybe we'll, I'll just introduce this idea, maybe we can kind of tease it out or not.
Doug Shapiro:But if you think about the music labels as a major music labels as an analogy, they went through a period of effectively content becoming infinite. The role that they played in the value chain shifted a lot in decade from, let's say, 2015 to 2025, because a lot of the things they used to do such as finance production and assemble talent and do the marketing and the distribution became democratized. It became possible for independent artists to do all those things themselves. They could record their own stuff. Billie Eilish can can record a multi platinum album in her brother's studio.
Doug Shapiro:You can market on your own socials. You can self distribute on Spotify or SoundCloud. But what the labels did a good job of doing was still reasserting their value in the value chain. And so today, almost every new artist that emerges in music emerges out of the tale of self distribution. They start on TikTok or YouTube or Spotify or SoundCloud or whatever.
Doug Shapiro:Once they have a hit, pretty much they all go and then sign with Universal or Warner or something. And part of the reason for that is that they want the professional validation. And so for the existing intermediaries, that is one potential source of scarcity. But there's a lot of areas, there's a lot of things that they can still do that are not going to be democratized by technology.
Dan Fahy:Yeah, great. And you've got a long list on your sub stack that and they're all fascinating. There's two that I really wanted to tease out a little bit with you. One was this and you mentioned it, compelling original stories, human authenticity, providence and craft, And that that presents a challenge perhaps for traditional intermediaries in that they're they're hooked onto the big scale content, mass production values, for them to pivot into more craft and providence. How do you see that sort of tension between what a traditional intermediary does at scale and this notion of craft and authenticity?
Doug Shapiro:I think it's definitely a challenge. And if you think about it, to back up again and think about disruption more broadly, what generally happens in disruption is that you have incumbents who have established some sort of definition of value for consumers, and then the upstarts come, the insurgents come, and they always start at the bottom of the curve. They always pick off the least demanding customers or customers that have actually been priced out of the market altogether, and then they keep marching up the performance curve, they keep getting better and better and better. Again, you could think about Airbnb, initially they were really appealing to customers who couldn't even afford a hotel room, and then it was those who could afford a cheap hotel room and they kept marching up the curve. And today, you could go on Airbnb and you can rent a luxury villa that comes with a chef and all these, I forget what they call it, some kind of Airbnb experiences.
Doug Shapiro:Anyway, they've gone all the way to the top of the curve. At least for leisure travel, they have not... They really can't compete for business customers, but that's it. Let's put that to the side. So anyway, there's always this dynamic where the insurgents come from the bottom and keep moving up the curve.
Doug Shapiro:So the question becomes, incumbents get kind of backed into a corner, they get backed up the curve, How big is that high end of the market? Like how big is that high end of the market that the insurgent can't get to? So that becomes the question here too, is let's say that there is this resilient top end of the market for franchise IP, very scarce experiences, big blockbusters, or something that that the insurgents can't attack even with the help of AI, the question is simply, well, okay, great, but how big is that market? And the further complication is that for most of the companies that play in that market, their business is largely funded by that mediocre middle that's going to be commoditized. There's not a lot of companies that only play in the very high end of the...
Doug Shapiro:There's A24 or there's little niche producers that might only play in the very high end of the prestige end of the market. But for large media conglomerates, large media companies, there's very few that can say they do that. And so that becomes the challenge is, or to put it a different way, is the thing that makes that stuff at the top end attractive. It's scarcity, also the thing that inherently caps the size of the market.
Dan Fahy:Really interesting. If I could
Doug Shapiro:just roll back to one
Dan Fahy:of the other scarcities that you touched on, and it's this notion of validation. You talk about the music labels. And if we just roll if we take a lens that's more global, I think a lot of your thinking and a lot of why I read your thinking tends to focus around the big studio broadcaster streamer entities. But if you look at a more national level, say in Europe or where I am today in Australia, there's there's a there's a middle class of media institutions that are national in nature that have in the past provided that form of professional validation. And they're all under strain of of similar sorts.
Dan Fahy:But do you see that the the sort of scarcity of validation might end up having a bit of a barbell effect where you've got fewer and fewer genuinely validatory institutions and the middle the middle, perhaps the national validators, national broadcasters sort of over time lose their validation impact?
Doug Shapiro:It's hard to say. It's hard to say. I think it really depends on the the value of the validation is directly correlated to the value of the brand. And so I think it's a hard thing to say. By their nature, most big national brands are going to have somewhat middle of the road or big national broadcasters are going to have somewhat middle of the road brands because they have to operate at scale.
Doug Shapiro:And so the structural risk is that those brands lose value over time and that the validation value is not that great, but that's kind of a hard thing to say. What is the value of the validation from the BBC? I mean, the other thing is, I don't wanna over rotate on this idea of the value of professional validation because most of, if we're talking about this content, I mean, again, it's hard to draw too many generalizations because traditional studios are in the business of cultivating, developing and producing an idea and owning the IP, and then distributing it, marketing, packaging, aggregating it, whatever, it depends if they're vertically integrated or not. And there's certain economics associated with IP ownership. If we're now talking about making a shift where they're not in the business of owning the IP, but they're in the business of attracting other people's IP and then monetizing marketing and whatever.
Doug Shapiro:That's a different business, different economics, different margin structures, different culture. So as a starting point, that's not an easy transition in and of itself before you even get to this question of, well, who still has a brand that even has any kind of validatory or whatever the word is. How many of these companies even still have brands that actually have some kind of validation value? So there's there's... Before you get to that question, you have an I think an even more fundamental question, which is how easy a transition is that to make?
Dan Fahy:Yes. This is a good segue actually to one of the other themes you've observed around as content supply balloons, it's possible that media becomes to be thought of as marketing as the as the gateway into the primary monetization rather than being, you know, a gateway into ancillary monetization. Do you want to just unpack that that notion of content as marketing a bit more? I think it's really interesting.
Doug Shapiro:Yeah. I mean, the idea there is that as supply increases, barriers to entry come down, is the Econ 101, The barriers to entry come down, new entrants will enter the market, there will be a flood of supply and prices go down, and then consumers become more price sensitive. And value shifts from this newly abundant thing into the compliments. And whoever owns the compliments in the value chain generally is incented to commoditize the abundant thing to drive value their direction. And so what ends up happening over time is that pricing moves toward marginal cost.
Doug Shapiro:In these perfectly competitive markets, pricing heads toward marginal cost. In media, marginal cost is zero. So when pricing heads toward marginal cost, it means pricing heads toward free. And if you, and so we're already seeing, we're already seeing that happen in the media business and we have seen it happen. So if you think about examples like, again, to talk about music, the value or the cost of record or price of recorded music has really plummeted.
Doug Shapiro:So if you think about how much you paid per hour to consume a CD versus how much you pay per hour to consume Spotify, Spotify is about one tenth. The cost of recorded music has fallen. And so the value has shifted to, in this case, largely to live events. It used to be that you would go on tour to promote the album, now you put out the album to promote the tour. If you think about what's happened in gaming, in triple a gaming, the the publishers will spend hundreds of millions of dollars on a game, and the only way they can monetize that kind of investment really is to charge a lot for the cartridges or discs.
Doug Shapiro:You know, you pay 80 US or 70 or whatever, 69.99 to buy the game itself. So you're... The the AAA game developers monetize the gameplay, but in mobile gaming, it costs orders of magnitude less to create a mobile game, and almost all mobile games are now free. They're all free to play, and they're not... So they're not monetizing the gameplay per se.
Doug Shapiro:What they monetize is status. You know, you buy like emotes or skins or digital goods or, you know, power ups or something like that. You know, they're monetizing something other than the gameplay itself. And what's happening in video, which is very interesting, I think, lately, is that you're seeing this really big swing back toward ad supported models. And all the SVOD players that were supposed to herald the end of TV advertising, you know, Netflix and Amazon and Disney plus, they all obviously now have ad supported tiers.
Doug Shapiro:You have just in the last couple weeks speculation that Disney Plus is preparing to launch an ad... A a free ad supported tier. Paramount Plus is making more content free. Peacock just did this deal with YouTube yesterday where they're gonna be bundling Peacock in with YouTube Premium, which is also sort of tacitly a shift toward ad support. So you're kinda...
Doug Shapiro:What what I think you're seeing across the media landscape is lower willingness to pay, lower willingness by consumers to pay directly for content. And so if that's where we're headed, then it means that the content itself is gonna have to increasingly be top of funnel for something else. And you say, well, what is that something else? And it could be advertising, it could be other forms of super fan monetization, like merchandise or events or early access or fan creation or whatever it may be, but that is a very, for a business that's used to the content itself being the profit center, not the cost center, that's a pretty big shift.
Dan Fahy:Yeah. Yeah, and those companies, you know, three of the companies you mentioned there, Disney, Paramount, NBCU, you know, within the sort of Peacock, Comcast family. But they're all they're all well schooled in franchise management. You know, that's in their DNA. They...
Dan Fahy:For for many years of leveraged theatrical releases, you know, theme parks, etcetera, consumer products. And for for a a traditional intermediary perhaps at a national level that's not really been in that franchise game. It's a big organizational pivot to make, isn't it? To get into that that that mindset or that cultural practice of franchise management.
Doug Shapiro:Oh, yeah. It's... I would say there aren't a lot. Even the big companies, are not a lot that you... I say would Disney does it well.
Doug Shapiro:And, you know, there's that famous image that Walt Disney drew in 1957 of the interlocking pieces of all the businesses and how they all kind of revolve around the, the IP. But they do it better than anybody. And again, I worked at Time Warner and I would say Warner Brothers was okay at it. It really tends to be... When I was at Turner, actually, for a short while, I oversaw this effort to create a centralized three sixty degree monetization group.
Doug Shapiro:So it was gonna be a central group that was gonna work with the brands, work with Turner Sports and CNN and Turner Entertainment to help develop the franchises and find other forms of monetization. And we were gonna have a, you know, a gaming expert and a merch and merch licensing expert and events experts and the I... You know, concept being maybe sort of like a internal centers of excellence that would then work with the brands to help develop these new forms of monetization. And it's really, really hard. It's typically an afterthought.
Doug Shapiro:It's typically something where those people don't have a seat at the development table. It's more like, okay, we made a hit. You guys go figure out how to monetize it now, which is not really the way to do it. The way to do it would be to think much more holistically from the very get go about how the content and these various other forms of monetization may work together in lockstep. I would say that you're right, it's very hard organizationally.
Doug Shapiro:I don't think a lot of companies do it well. And the other thing is it's labor intensive. It tends to be lower margin than the core business. So that's yet another reason to not get a lot of focus. When you think about content creation businesses, typically there's development people who have the highest status in the company.
Doug Shapiro:And if you said, okay, the live events or the merch person's going to now sit at the green light table with the other, you know, with the development folks and help them decide what to make or what not to make. You know, the head development people will look at like you had three heads. Like, what are you talking about? Like that? No, no, I do that.
Doug Shapiro:I tell them when to get involved. They don't tell me what to make or not make. So one thing I think is interesting is if you, in a lot of media businesses, the fundamental economic unit is the IP. You know, so you think about, like, gaming, they're they're... They'll run, games.
Doug Shapiro:In a lot of cases, they're organized around the gaming franchise. In music, they're, by its nature organized around the artist is the franchise. I think Mattel recently reorganized around its various franchises. That's not how most big media companies work, that they actually are organized around the distribution channel so that the content is in service of the distribution, not that the distribution is in service of the content. And so, you'd almost say, well, if you really were to do this well, you would organize a media company around its franchises.
Doug Shapiro:You'd have a creative lead and a business lead on every franchise. They would be incented to optimize the value of the franchise and decide how to distribute it and where to distribute it, all those kinds of things. You know, again, that's like a really radical idea and if any, I think for most big media companies, if they try to transition toward that, would, it would break them. Know, it's just like such a, this is a radical concept. But yeah, no, that's not, that's not easy in any way, culturally, operationally, yeah.
Doug Shapiro:It's, that's a super tough thing to do. If you think about content as top of funnel, it then by implication, the bottom of the funnel is always smaller than the top of the funnel, right? There's fewer people at the bottom of the funnel. What you're saying is we're gonna put out a lot of stuff or not a lot of stuff, We're gonna put out this stuff to a lot of people, but we realize we're gonna be monetizing some kind of super fans at a higher level. The...
Doug Shapiro:You know, that's just a lot a lot of media business that are not oriented to think that way, but it really means that you should be engaging those people on a continuous basis. You shouldn't be putting out a piece of content every five years. You can't put out a Fast and Furious every three or four years and hope the fans come back, you should really be figuring out how do we... It's almost that media would have just like a software did, media has to go from being a product to a service, an ongoing thing that you're giving the biggest fans the opportunity to engage with it continuously. Again, like these are all very these are all very challenging changes for for a media company.
Dan Fahy:Yes. And so I'm going to push you into highly speculative territory now on on exactly that theme. So let's just acknowledge that. But if you think about it, maybe ex US, you know, a national market in Europe or APAC or somewhere, and we're talking about the intermediaries needing to shift themselves to be able to leverage new scarcities or monetize compliments or as you say shift their thinking from a product to a service. A lot of them won't be able to make the shift.
Dan Fahy:What do you think it means for market structures in those markets?
Doug Shapiro:I don't think it's good. I think it's meaning I think that there's a that the I think the word the world's going is that it will, it will barbell. And in the sense that there will be value that shifts to this, you know, the scarce IP, scarce experiences, the few companies that can make this transition that can reorient themselves toward these emerging scarcities or the compliments that are getting more valuable on the one hand, and then it's gonna also shift to the entities, the platforms that control the consumer relationship and control the moment of consumer choice. And right now that is Netflix and TikTok and Spotify and Steam and Reels and YouTube, right? But the word barbell is probably not a good word because it implies that the two sides are of equal size.
Doug Shapiro:And I think the latter, the entities that control that moment of choice, that consumer relationship are positioned to be much, much more larger and much more powerful. And so the middle is gonna, I'm not sure, I don't see any way around it and I'm happy to have someone explain to me the opposing case, but the middle, I think, is gonna get really squeezed. And so it comes back to the question I asked or raised before, which is even for the companies that currently operate in that head, the head of the quality curve in that area scarcity, there's a fundamental... There are two fundamental questions, which is can you scale that, number one. And number two, if you're being funded in large part by that commoditizing middle, are are you you even even gonna be able to financially survive that transition?
Doug Shapiro:You know, so if you think about a broadcaster, right, a broadcaster historically has created value through aggregation, curation, distribution, all of those things are gonna be commoditized to be frank. And so can you, what do they do about it? Do they move upstream and to more content ownership, IP ownership? Maybe, but that's financially quite challenging. Do they get much better at aggregating or curating?
Doug Shapiro:Do they end up, and that gets to your question about having a brand that a validating brand, a curating brand, maybe that's a possibility, but also, I think that there's a question about what's the competitive moat around that, how powerful is that? I mean, we could, one, going back to the very beginning, we talked about this idea of computable meaning and all of the different primitives associated with that, but one of the primitives is coordinate, that what AI is gonna be able to do is help people find stuff. And if you think about an AI coordination, so for the most part, coordination happens at the level of the platform, and a lot of the value actually that these platforms have in owning that moment of consumer choice is because they are, that is a coordination role, it's not just distribution, but it's coordination. So there's a really big question about whether that coordination migrates to a new AI coordination layer and maybe it's ChatGPT, maybe it's Anthropic or whatever, but you could imagine this thing that knows you really well because you're talking to it all the time, it understands your preferences, it understands your context, it's reading your email, it knows you have a long car ride tomorrow, it knows your boss sent you a kind of, you know, a crappy email today and you might be in a bad mood, whatever and it's it's interests may be much more aligned with yours.
Doug Shapiro:You may say you know what I'm really feeling bad, I've been scrolling too much on social, can you please direct me toward this kind of content? Or it may say, you know, you haven't actually watched Paramount plus in two months, maybe you want to cancel it. Know, the Paramount plus UI is probably not going to advise you to cancel Paramount plus So, you know, in theory, AI coordination layer could be a much better mousetrap, a much better consumer experience. And so if you're in the media business and your main function is curating, that could be completely disintermediated by AI and, you know, way before the consumer gets to you, they've already made decisions long before they show up at your door or deep link into your library of content. And you become basically sort of a nothing more than kind of like a content API call or a content backend, which is no place you wanna be.
Doug Shapiro:If you don't own the IP, then your value has been entirely eroded. So yeah, I don't know if that's a particularly uplifting place to end, But yeah, I mean the world, you know, and it's kind of, it's hard for people to get their heads around, but again, it gets back to what I said at the very beginning about why these changes maybe even, why the media business may change more in the next decade than it has in the last two.
Dan Fahy:Thanks, Doug. So, Doug, given given there are these tectonic shifts underway as you frame them, what's your advice for someone who's starting their career in media or mid career in media and can see or sense this happening around them? How should they think about career?
Doug Shapiro:It's a good question. I think for one thing, they should not be afraid of AI. They should work with the tools, learn how they're being used. All the gray hairs like me who are running these media businesses are gonna need the help of people who know what they're doing. And so I think there's an opportunity to, there's an opportunity to become even more valuable by really understanding these things.
Doug Shapiro:I know p... There's a lot of kind of visceral emotional rejection of AI and it's not art and it's slop and all these kinds of things. I, I encourage people not to put their head in the sand and pretend it doesn't exist because I think in a lot of ways I think we've been in this very binary black and white world is bad or it's good, whereas it's gonna be, I think in a few years, it'll be like debating whether electricity was bad or good. It's gonna be diffused into everything. You know, you're gonna be working on video where you're in Premiere Pro and you're combining real footage with something you made in Blender and then something generative and then it gets all mashed together and rendered out.
Doug Shapiro:At the end, no one's gonna know what was AI, what wasn't AI. So that would be number one, is just to embrace the tools because I don't think they're going away. The second thing, I think it's helpful to think about these scarcities, this idea of what will be scarce as content is abundant, to think about some of these potential tectonic shifts in where one sits in the value chain. Again, when you think about the platforms and how much value they've created by owning both the distribution and the coordination, if that coordination gets unbundled and moves to another level, what does that mean? What does that mean for Netflix?
Doug Shapiro:What does that mean for Spotify? What does... Whatever. Just so to be mindful of how bargaining power may shift up and down the value chain. And I guess the third thing is I would encourage people to be willing to be fluid in their career decisions that we may be entering an era where one just needs to kind of be willing to move more quickly and not stay at a place for a decade and see what happens.
Doug Shapiro:And I don't I don't know. I mean, does it does feel to me like the the pace of change is accelerating and it and it's it's I think everyone should be going into their career with their eyes open about that.
Dan Fahy:Doug, thank you very much for this. This has been a incredibly rich conversation, and there's there's lots and lots in this for, for people to mull over. So thanks for your time this morning.
Doug Shapiro:Alright. Great. Thank you, Dan.
Dan Fahy:That was Doug Shapiro leaving us with so much to think about. Thanks for listening. I'm Dan Fay. Original music by Lee Rezavir and So Cow. And if you like this episode, please pass it on to a friend or colleague.