Professional Documents
Culture Documents
Sylvia M. Chan-Olmsted
Introduction
Artificial intelligence (AI) has been touted by many in the industry as the
transformational technology of the digital age and the electricity of this century
that will power everything. It was even suggested that the adoption of AI is not
a matter of choice but of timetable and strategy because all companies today
must build AI capabilities into their businesses. The value of AI seems to be in
developing a foundation of competencies for companies rather than acquiring
a specific tool or technology. Further concluded that, because of the speed of its
growth in comparison to other technologies like computers and the Internet,
and the transformative impact of its utilities, companies today cannot take a wait
and see approach regarding AI to avoid risk. In essence, artificial intelligence is
an increasingly critical business mind-set and competency for companies,
including those in the media sector.
With the infusion of tech companies like Netflix, Amazon, Apple, Google, and
Facebook, the media industry has seen significant changes in audience behavior,
delivery platforms, content strategy, and business models. Within such a fluid
environment, media companies are seeking sustainable competitive advantages
that might help them survive and even prosper in a time of uncertainty. Artificial
intelligence, with its transformative promises, seems to be the next technology of
choice (Castelino, 2018). There has been abundant literature addressing the
applications and implications of AI, but few have focused on the media sector.
Given its unique market and consumer characteristics (Picard, 2005), and the
complexity of producing appealing content based on judgment, interpretation,
creativity, and communication (Gentzkow, 2018), it is unclear whether AI would
offer the same disruptive power and utilities in the media sector as in other tangible
goods industries. Also, the challenges of integrating AI into media companies’
content offerings and platform ecosystems might be significant considering the
unique social impacts of media products. This article offers a review of the utilities
of AI in the media industry, its role in the context of the value chain, and the
challenges in incorporating the so-called cognitive technologies in this industry.
The focus here is more strategic than conceptual.
AI business studies
Research in AI’s business applications is a relatively new area with limited
empirical investigations and theoretical development. Duan et al. (2019)
4 S. M. CHAN-OLMSTED
concluded that, while there are many industry reports and articles with
a strategic emphasis on AI applications, there are very limited academic
studies focusing on understanding the use and impact of AI from the
perspective of technology application and with rigorous scholarly investiga-
tion or theorization. Conceptually, scholars have suggested that the biggest
advance of AI is in improving perception (e.g., image/speech recognition)
and cognition (e.g., automate insurance claims) in business processes
(Brynjolfsson & Mcafee, 2017). Agrawal, Gans, and Goldfarb (2019) further
argued that AI’s biggest impact is in prediction in an uncertain world for
better decision-making. Overall, academic investigations of AI business
applications have often touched on machine-human bonds/communica-
tion/collaboration, innovative business models/ecosystems, labor market dis-
ruptions, and value creation in specific sectors (Bolton, Machova, Kovacova,
& Valaskova, 2018; Garbuio & Lin, 2019; Kelley, Fontanetta, Heintzman, &
Pereira, 2018; Valter, Lindgren, & Prasad, 2018).
In general, the literature suggests that AI can enhance the industry value chain
by changing relationships, reinventing business platforms, and expanding the
power of data. AI can also create positive impacts on workflow by improving
efficiency (e.g., automated decision-making), expertise/experience/effectiveness
(e.g., augmenting human experts), and innovativeness (e.g., identifying alternatives
and optimization) (Kelley et al., 2018). Duan et al. (2019) stressed that using AI for
decision-making, either to support/assist or replace human decision-makers, is
one of the most important applications in AI history; and there are research
opportunities in understanding and theorizing ways to measure AI use and impact,
the role of AI in decision-making, AI system implementations, and cultural/
ethical/legal implications of AI applications. In addition to addressing the business
value of AI, studies have also identified certain risks associated with the business
adoption of AI. For example, there are innate risks that might arise from inter-
pretability when machines communicating with humans; verifiability issues due to
statistical truth-based decisions (rather than literal or context-based decisions)
made by machines; and ethical dilemmas in business automation from the per-
spectives of different stakeholders such as the labor force and regulators
(Brynjolfsson & Mcafee, 2017; Wright & Schultz, 2018).
AI in media
In the advertising and media sectors, companies seem to be showing similar
enthusiasm toward AI. A market survey in Europe found that 80% of the
media practitioners agreed that AI would have significant impacts on their
industry (Shields, 2018). Specifically, while 62% believed AI would improve
decision-making, 47% thought it would improve productivity. However, one-
third of the respondents also felt not quite confident in their understanding
of AI and how it might be applied in their work. Less human control (47%)
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 5
and trustworthy insights (55%) were the two biggest concerns, also according
to the survey. Overall, few people felt that AI would have a negative impact
on their work or job availabilities (Shields, 2018).
Today’s audience has elevated expectations in every aspect of their digital lives,
thanks largely to tech firms like Amazon that offer responsive services and active
engagement. In such a data-driven and direct-to-consumer world, media need to
respond faster and better to audience expectations just like other tech company
counterparts (Raconteur, 2018). As media are now interwoven into consumers’
daily lives and technology bundles, media companies must deliver engaging
individual experiences to every consumer in context, in the moment, and all the
time. Consequently, human resource commitment is significant in this new reality
and the solution is logically the adoption of cognitive technologies.
In addition to alleviating the volume of work, AI can make the interac-
tion of media, content, audiences, and operations faster and better. To serve
the audiences as individuals, media companies must understand audience
sentiments/preferences toward content and characters, assess resonance,
and promptly align content with audience preferences. To accomplish
this, media companies must acquire insights from large datasets and act
on it in real-time. The traditional approach of collecting and interpreting
audience data is no longer agile enough for such a scenario. For instance, as
the appetite for online video on multiple screens increases, AI can help
media companies perform mass personalization of video content experi-
ences more efficiently and effectively. Gentzkow (2018) concluded that the
key impact of AI is and will be on the demand rather than the supply side of
media, especially in how content is matched to consumers. The application
of cognitive technologies offers better means of matching content with
demand, optimizing content management, and scaling the process of con-
tent delivery.
Led by tech companies like Facebook, Amazon, Apple, Netflix, and Google
with their expansion into the media sector, AI has been applied in various areas
of the media industry to make “smarter” products and services. For example, AI
enables Spotify’s and Netflix’s recommendation playlists; more effective content
management at media companies; and even chatbots to improve customer
experience. A survey found that the most common ways in which news media
are using AI globally were to improve content recommendations (59%), fol-
lowed by workflow automation (39%), commercial optimization (e.g., ad target-
ing and dynamic pricing) (39%), and intelligent agents to help reporters find
stories (35%) (eMarketer, 2018). Another survey of media’s AI adoption found
that cable systems or MSO (44%) had the highest adoption rate, followed by
cable networks (30%), and broadcast networks (25%) (Mayeda, 2018).
Strategically, how might AI be applied to improve a media company’s competi-
tiveness? Because of the emerging nature and newness of AI, most literature in this
area has been industry-based. Some suggested that these cognitive technologies
6 S. M. CHAN-OLMSTED
Media Audience
Figure 1. Generic value chain. Source: Adapted from Porter, M.E., 1985. The competitive advantage:
Creating and sustaining superior performance. New York, NY: Free Press.
Porter’s generic value chain suggests that business activities can be divided into
two general areas: primary and support activities. Primary activities involve the
physical creation of products or services, their marketing and delivery to buyers,
and their support and service after the sale. Specifically, these activities include
inbound logistic (i.e., supplier relationships and activities related to receive, store,
and disseminate inputs), operations (i.e., activities related to transform inputs into
products/services), outbound logistics (i.e., activities related to collect, store, and
disseminate products/services), marketing/sales (i.e., activities related to facilitate
the purchase), and service (i.e., activities related to keep the product/service work-
ing and satisfied after purchase). Support or secondary activities provide the inputs
and infrastructure to allow the primary activities to take place. They include
procurement (i.e., acquisition of inputs and resources), human resource manage-
ment (i.e., activities related to recruit, train, develop, and manage personnel),
technological development (i.e., activities related to the technology, systems, and
knowledge in transforming inputs into outputs), and infrastructure (i.e., activities
related to serve the firm’s needs and tie various parts together like accounting, legal,
and other general management functions). An analysis of the value chain enables
a firm to identify its cost and differentiation advantages (Porter, 1985). Critics of
Porter’s value chain have stated that the traditional model does not address the
global expansion of firms, is more applicable to physical products, focuses on one-
way, linear value creation, emits some new agents such as VC firms, and misses the
importance of value network with the emphasis of internal activities (Hasen &
Birkinshaw, 2007; Timmer, Los, Stehrer, & De Vries, 2013).
From a media perspective, all activities along the chain are not necessarily
vertically integrated as traditional value activities in this industry tend to focus
8 S. M. CHAN-OLMSTED
on acquiring and creating content and its marketing, advertising, and promoting
(Picard, 2002). Also, there is a significant symbiotic relationship between tech-
nology and media embedded in its product delivery and access. While Porter
acknowledged that technology is permeating the value chain at every point and
transforming the way activities are performed (Porter & Millar, 1985), the
original model has an organization-centric approach without addressing today’s
user-centric reality. Some have suggested that there needs to be a more user-
centric approach to incorporate the actions of external users, social media, and
interfaces affecting the internal value activities of media firms via a feedback
loop, and in the new media economy, an audience could also create value in
a media value chain via audience insights for advertisers or even user-generated
content (Chan-Olmsted & Shay, 2016).
The literature reviewed thus far has identified various potential utilities of AI in
media. However, the information is scattered and lacks systemic contexts. Given
the early stage of AI adoption in this sector, this article aims to analyze the types of
AI utilities in media and explore the strategic value of AI in media by examining
the applications of these cognitive technologies and discussing their implications in
the contexts of value chain through a qualitative text analysis approach. The
following general issues are reviewed: (1) how have media companies utilized AI
technologies? (2) What are the strategic implications of AI adoption by media
companies in the context of value creation? (3) What are the challenges of AI
application by media companies considering its strategic value?
AI adoption analysis
This review employed the research approach of systematic qualitative text
analysis to gain insights from the data collected. The qualitative approach
provides well-grounded, richer descriptions and explanations of the AI applica-
tions in industry contexts, as the primary aim here is to explore the use and
adoption of AI by identifying, analyzing, and reporting patterns/themes with
data (Miles, Huberman, & Saldaña, 2014). Specifically, thematic analysis, an
accessible and theoretically flexible approach to analyzing qualitative data, was
adopted. The qualitative analysis allows for the discovery of broad patterns and
themes from complex business activities, interpretations of various aspects of the
research topics; and enables more granular research analysis subsequently
(Boyatzis, 1998). Accordingly, this study follows the various phases of thematic
analysis, including data familiarization (texts from collected articles), code gen-
eration, theme development, reorganization and integration of themes, and
thematic interpretations.
The data collection phase involved a database search of the literature using
keywords such as artificial intelligence/AI and all associated cognitive technologies
discussed above, along with all forms of media (e.g., newspapers, news, TV, radio,
etc.) and top media and technology companies. The time period of 2015–2018 was
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 9
selected, as 2015 was often seen as the year that AI took off in terms of industry
applications with the shipment of Amazon Alexa and larger-scale applications of
machine learning (Clark, 2015). A total of 149 articles, news reports, and industry
whitepapers/reports were examined to identify media company-related applica-
tions of cognitive technologies. In particular, the media companies analyzed
include Netflix, New York Times, Washington Post, Associated Press, Apple,
Hulu, YouTube, Facebook and Amazon (only media-related aspects were ana-
lyzed), Quartz, the Weather Company, Sports Illustrated, Yahoo Sports, CBS, Fox,
BBC, Guardian, Disney, iHeartMedia, NBA, various OTT companies, and
a number of startups. The perspective of value chain is employed to offer
a framework for discussing the strategic implications of the AI applications.
Using the thematic analysis approach, codes and categories were constructed to
reflect the applications detailed in the materials under the proposed framework.
An iterative, inductive process of interpretive analysis with contextuality of the
applications was adopted to collate the coded categories into key themes that depict
common, recurring patterns. MAXQDA, a software program designed for com-
puter-assisted qualitative studies, was used to assist in managing the coding
process. The findings below are organized by the themes of AI applications and
the synthesized implications of AI in the media value chain.
brand is simply about personalized content with the help of AI (Lynch, 2018).
Netflix algorithmically adapts its subscribers’ user experience individually,
including the rows selected for the homepage, the titles selected for those
rows, the visuals for each movie, and the recommendations of other movies.
Besides video, using mostly NLP related technologies, news and audio compa-
nies have also applied AI for better content service to their customers. Quartz
has experimented with media and news app to find articles about events, people,
or topics using NLP. In audio, NLP has been used to help contextual searches for
evergreen content and audio discovery such as podcasts and radio stations’ on-
demand content (Cramer, 2017). AI-enabled content recommendations and
discovery is essential for audience satisfaction and relationship in an on-
demand content environment with increasing product volumes. Visual search/
discovery is highly desired by today’s consumers, especially the millennials
(Chadha, 2019).
Audience engagement
Cognitive technologies have also been applied for better and more meaningful
interactions with the audience. The improvement is most evident in three areas:
contextual interactions, timely engagement, and AI-powered assistants. For
instance, ML has been used to manage metadata generated by OTT providers
to generate insight for best consumer engagement practices (McNevin, 2017).
Washington Post’s Knowledge Map, applying cognitive technologies to correlate
massive and complex data, gives readers an easy way of catching up on ongoing
stories quickly and seamlessly with relevant background and additional info
when readers request it. News companies like the Guardian have used Chatbot
on Facebook to help users searched for news stories. The growing popularity of
voice-based virtual assistants is enabling intelligent interactions with the audi-
ence in content searching, discovery, and navigation when the assistant can
understand linguistic features, emotions, and user intent through AI technolo-
gies. Sports entities like the NBA league/teams have started to use AI in sport
through chatbots on social media and websites for game information, statistics,
and ticket sales inquiries (Cormack, 2018). Audience engagement in context,
real-time, and through AI-powered conduits can contribute to a deeper audi-
ence-media brand relationship in today’s fragmented media marketplace.
example, AI helps with video encoding and delivery for better video streaming
experiences. Similarly, for audio, iHeartMedia uses Super Hi-Fi AI to offer custo-
mized song transitions and adjust volume discrepancies like a live DJ would at the
scalable rate necessary for streaming. AI helps OTT services optimize many aspects
of the video ecosystem and experiences. AI can tailor content and branded
experiences to individual audiences (Castelino, 2018). AI applications help
media companies to improve their technical interface with the audience and
deliver better user experiences. The following five application themes are more
from the aspect of firm and strategy.
Message optimization
The optimization of messages here refers to the application of AI for persona-
lized message delivery, especially in the context of advertising/marketing cam-
paigns. When done right, this application benefits both the audience and the
media. For example, for video-related products, AI can index and analyze videos
in real-time, providing advertising partners a better match of message-audience
in context for content marketing purposes (Bragg, 2018). This also results in
better visibility, transparency, and accountability for the advertisers (McNevin,
2017). The same is applicable to audio products. AI enables digital audio ad
server to serve up the right message and offer new ways to track campaigns for
attribution tracking and modeling, elevating radio on even footing with digital
media (Cramer, 2017). The optimization of ad message delivery is so likely to
create better user experiences.
Content management
Beyond the optimization, AI offers extensive media content-related functions.
These functions can be examined from the perspectives of content aggregation,
extraction, tagging, monitoring, and control. The key here is in the enabling of
a machine to complement human decisions and behaviors, thus making the
content management process more effective and/or efficient. For instance,
BBC’s Juicer, a news aggregation and content extraction API system, takes
articles from the BBC and other news sites and algorithmically parse/tag to
make them searchable and useful for trend analysis. This way the BBC journal-
ists can focus on reporting than content management. AI in content manage-
ment seems to a major and early application by media companies. An industry
survey found that 47% of the respondents use AI for automated metadata
creating, generating, and attaching metadata tags to clips to simplify content
searches and accelerate retrieval of clips. This is especially important for those
with large media content collections. As high as 77% of the companies with large
content libraries indicated that they use AI for this purpose (Mayeda, 2018).
Another aspect of content management is in the identification, monitor-
ing, and quality control of the content. The same industry survey shows that
36% of the media companies use AI as a means of quality control and
12 S. M. CHAN-OLMSTED
Content creation
AI does not only help with the management of content but it can also create media
content. Furthermore, AI can identify the content that offers the best ROI. From
the creative process perspective, AI can be used to automate various activities like
plot identification, scene selection, and scripting for post-production work. For
example, Hollywood studios have used AI to perform the content translation and
trailer production with key plots (Bragg, 2018); NLP to convey meaning from data
for story writing, and other algorithms for data visualization. IBM Watson in 2016
produced a cognitive movie trailer for the Fox horror movie Morgan (McNevin,
2017). Using ML and NLP, The Weather Company also produced a cognitive ad
for Toyota. Disney Research invested in a system to automatically learn the
association between images and the sounds they plausibly make (e.g., car and car
engine sound). The results of such research are expected to be applied in sound
effect systems or used to serve specific segments of audiences.
From the perspective of news content creation, Associated Press has used
automated writing technology to produce earnings stories and to cover more
minor leagues baseball games (Alpert, 2016). Washington Post used a data-
crunching program called Heliograf to expand its election coverage. As
Heliograf offers more comprehensive coverage with predetermined parameters,
geo-targeting, and other alerts, the Post reporters were able to focus on covering
high-profile races. The Post has also tested headline writing tools named Bandito
(Alpert, 2016). Money.net and Controvert Media, a couple of news startups,
have worked on the development of automated news feed of machine-generated
data-centric stories (Alpert, 2016). Yahoo Sports implemented Automatic
insights, an NLP platform, that generates human-sounding narratives from
data to create stories about sports teams or fantasy sports teams. Reuters used
semantic technology, Graphiq, for its data visualization in real-time to provide
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 13
data-driven news stories. Associated Press and Forbes have used AI to create
news content using templates and fill-in-the-blanks to collect relevant data and
keywords and generate unique content (Bernazzani, 2017). Using AI, Forbes was
able to recommend article topics for writers based on their previous articles and
headlines based on the sentiment of their images. Additionally, Forbes is
implementing an AI story-writing tool that creates rough article drafts for
contributors to polish up (Willens, 2019). AI applications in this area have
enabled a better division of content creation between humans who can focus
on creating deeper insights and machines that can deliver more comprehensive,
data-based, and timely content.
Audience insights
Effective audience engagement typically begins with better audience insights. This
application addresses mostly the perspective of a media strategy than audience
benefits. For example, AI has provided better attribution tracking and modeling in
audio (Cramer, 2017). The application of cognitive technologies makes program-
matic advertising and marketing forecasting possible with the audience data
(Faggella, 2018). AI-enhanced pay-per-click advertising can uncover new ad chan-
nels, test out more ad platforms, and optimize targeting because of the audience
data generated and analyzed. Online media can design a personalized website
experience using consumer data for relevancy and preferences. The AI-powered
customer insights facilitate many marketing-related decisions. For example, mar-
keters have used AI algorithms to create customer personas based on massive data
sets, including geo-specific events, onsite interactions, referral source, psycho-
graphic factors, purchase behaviors, and past communication, in designing
media campaigns for different customer segments (Karlson, 2017). Disney, using
deep learning and facial scanning software on a few thousand test subjects,
attempted to track audience emotions in real-time to help them make decisions
on a film’s potential (Locker, Loucks, & Sallomi, 2018).
Operational automation
This application underlines the many functions presented thus far. It is discussed
independently because of the multiplicity and frequency of its use. The key benefit
here is the automation of mundane tasks to make typical media operations and
processes more efficient. For example, Reuter’s News Tracer tracks down breaking
news, so reporters are not tied down to grunt work. It uses the power of cognitive
computing and ML to extract insights from the stream of social media. It runs
algorithms on a percentage of Twitter’s daily tweets to find breaking news. It then
reverses engineering how a journalist would verify whether a piece of info was true
by delving into the identity of the profiles and networks. To process and analyze
more data faster, The New York Times uses AI to perform content tagging and
annotation, while Associated Press automated their content versions process,
reducing 800 h a week in copy amendments time. AI is now an important part
14 S. M. CHAN-OLMSTED
Our review shows that, from the perspective of primary activities, AI applica-
tions by media companies can add value to all phases of product creation,
marketing, distribution, and service (see Figure 1). Specifically, AI offers
media companies a more efficient means of identifying and storing raw materi-
als such as images, videos, sounds, and other data during the inbound logistic
stage. At the other end, AI also offers value to media companies by providing
timely interactions with the audience to enhance their consumption experiences
which were lacking in the past under the legacy one-way media systems.
Observations of the current AI applications in the industry suggest that AI is
likely to create the most value in the rest three types of primary activities:
operations, outbound logistics, and marketing/sales, because of their abilities
to reinvent the content creation process (operations), enhance the distribution
of the final product to consumers (outbound logistic), and to improve persona-
lized marketing of the product through better audience insights and engagement
(marketing/sales). From the perspective of support value-generating activities,
AI applications seem to involve mostly technology development-related activ-
ities. Specifically, AI offers a better means of managing and processing the
overall information/knowledge base of media companies as the volume, types,
and speed of data continue to increase. Overall, the value of AI at this point
seems to rest largely in the improved perceptive power and efficiency through
primary activities. However, it is important to also differentiate the content
creators from distributors in this assessment. The value of perception and
cognition appears to be especially important for content creators in enhancing
their operation efficiency (improved perception) and effectiveness (augmented
content decisions). For content distributors, the value of AI centers on being
more effective and innovative in marketing and service through improved data
and cognition.
While the value chain framework identified the area of potential value that
might be created by cognitive technologies for media companies, a more specific
way to visualize AI’s contribution to the media value chain is to examine its
impacts on the workflow of a typical media company (see Figure 2;
PricewaterhouseCoopers, 2013). With improved NLP and metadata processing,
Operational Automation
Mutliplatform
Preproduction Post production Consumption
distribution
Content creation & content management Augmented experience Audience discovery, engagement, messaging, & insights
Figure 2. Media workflow. Source: Adapted from Game Changer: A New Kind of Value Chain for
Entertainment and Media Companies, by PWC, retrieved November 28, 2018, from https://www.pwc.fr/fr/
assets/files/pdf/2014/01/pwc_value_chain.pdf. Copyright by PwC.
16 S. M. CHAN-OLMSTED
media companies are improving this workflow and increasingly capable of per-
forming real-time transcription, translation, and even deeper content analysis. In
this adapted media workflow, AI can play a role from pre-production, production,
post-production, to distribution and consumption through the applications men-
tioned earlier. While operational automation can enhance the workflow from
preproduction to consumption, content-related AI applications contribute to the
production phase of the workflow. AI functionality in audience insights, discovery,
messaging, and engagement, on the other hand, enables more effective workflow in
the delivery of media experiences. Finally, it is important to note the power of AI in
turning the notion of economies of scale inside out. The arrival of platforms/
technologies for rent (e.g., Amazon’s AWS) and AI is diminishing the advantage of
size in production, distribution, and marketing. AI in the media value chain can
potentially change the competitive parameter for this market, reflecting the inno-
vation and optimization value of AI proposed by Kelley et al. (2018).
altered by the introduction of AI, there is a need for change management. Humans,
in an AI environment, must work differently and engage in a deeper analysis to
deliver more complex, thoughtful decisions. There seems to be a shortage of
competency for the AI integrated phase of workflow in the media industry.
Conclusions
AI is becoming a general-purpose technology applicable to many industries just
like the Internet (Castellanos, 2018). Its utilities and transformative power are so
significant that, for media companies, the decision is not about whether to adopt
the cognitive technologies but when and how to establish an AI foundation to
improve their existing operations and identify new business opportunities. The
concern also does not rest on if AI might do evil things (Browne, 2018), but on
how to harvest the power of AI transparently and equitably.
Overall, this review is consistent with prior literature in that the value of AI in
media can be seen mostly in perception and cognition improvement and from
the operational aspects of automation, insights, and engagement (Duan et al.,
2019; Locker et al., 2018). Specifically, automation is about using information to
reduce inefficient, tedious, and repetitive tasks from humans. The use of ML has
helped the New York Times to moderate more comments for its articles faster
than human moderators alone. The automation provides value in reducing the
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 19
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