AI is disrupting the media industry, leading to potential reductions in content costs. Amazon, YouTube, and Netflix are positioned to benefit, with AI enhancing personalized content and recommendations. Morgan Stanley estimates Amazon could save significant amounts in production costs, projecting a $24 billion programming budget by 2025. While AI may reduce costs by 30%, studios might only see a 10% reduction in overall programming expenses. Investments in AI tools will incur costs but are expected to yield long-term savings. Meanwhile, expenses related to sports content are projected to increase.
YouTube and Netflix look poised to keep their gold and silver medals in the streaming wars as AI upends Hollywood, allowing for more personalized content and supercharged recommendations. But Amazon Prime Video is well-positioned for bronze, if not an even better spot on the podium.
AI could eventually bring down costs of making scripted TV and films by 30%, wrote Ben Swinburne, who led the team of Morgan Stanley analysts.
Leveraging Gen AI tools will not be free. Technology adoption may incur investment costs either from licensing the technology or developing in-house productivity tools. However, the net effect could be a reduction in production costs.
Sports costs will keep climbing.
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