Whilst the mere mention of AI can add billions in marketcap to an already farely huge IT and software company, the general users scratch their balding and/or botoxed foreheads. Everyone in the Media Intelligence industry, be it MMOs or pure play analysis companies, has implemented AI in their daily workflows and adapted their procedures to the – sometimes limited – capabilities of AI.

We are as an industry a few steps ahead in the practical usage, as we also started earlier with AI implementation than the ChatGPT moment everyone else woke up to. But there is one industry trend which I like to put in the limelight with two metaphors from the “old world“.

If you have a robotic lawn mower, you will experience its tendency to get stuck or to be drawn off course by items on the green. It generally dislikes odd shapes. Frustrated by the 90% performance, the user ends up adapting the garden to be rectangular. Without any freshly cut borders to flower beds. One will use it less, as something will always be left behind on the grass, reducing the mower performance again. The human adapts to the inflexible machine, because the human world is too complex for the machine.

The second picture is the one of a digger which is almost free of charge and at your constant disposal. Homo ludens (the gaming human) will start to dig holes and pile up dirt. For the fun of it and for the faint chance of striking gold/oil or unearthing anything else potentially useful. In the end, there are many holes. A wrecked garden – which is definetly not robo-mow suitable or presentable. And then the guy giving you the digger, tells you that actually you used all your credit and need to pay to level the ground again.

That point has not yet arrived in AI for the general user, but for corporate heavy users (e.g. Uber) very much so, and it has reacted with cuts to AI usage.

What do those stories tell us about the Media Intelligence Industry?

Competiton from startups

Firstly, there is still intensive competiton from newly formed startups, which regularly launch new products searching for a client with the matching need. As long as the venture money is ample and the vision intact, clients might give it a go. As many clients were disappointed before, the pool of potential users is decreasing. The time necessities to consume and then make use of the data is even more limited in an economic downturn.

If the client makes this investment, they will come up with tons of question, remarks and fingerpointing on mistakes. This keeps the providers in the red ink and reduces the already limited (“AI doesn’t cost anything and can do everything“) willingness to pay for a 92% experience.

Still the market is searching for the right innovation and so startups are being gobbled up by the leading MMOs and disappear regularly, and their approaches get included into the big suites until non-recognizable. In comes the next startup...

Other MMOs see new approaches and ideas on how to analyse the data. A few brainstorming sessions later, the product extension is designed and – thanks to AI – quickly programmed in proprietary code.

The innovation circle speeds up

This effect does not only reduce the importance of startups and other one-trick-ponies, but also diminishes the timespan over which innovations need to break even and earn a ROI. The product idea is not protectable and can be  “reinvented“ in proprietary code by everyone else in a matter of days.

This increases the innovation circle ever more, which leans on MMOs‘ budgets at the same time the client is budgetstrapped. Annual client meetings are discussing price reductions rather than new products. New features need to be included still, as the competition might offer the same as a freebie on top.

This hyped up innovation circle, which is mostly not supporting the core business, chips away at the financial basis.

The Differentiation dilemma

If one is using AI in a financially rewarding way, it almost always reduces costs and does not provide new revenue streams (see above). In the service industry the main cost item is human labor. Extended to the extreme, you have a highly efficient streamlined AI process, which is optimized only towards cost reduction. So the only remaining USP is price.

But as there is always someone around with a bigger boat, competing solely on price is a fool’s game. A normal competitor, a venture financed startup, a state owned enterprise or just a company giving away for free a service, that you made the core of your offering to the market see you defenceless. If price is the only argument left, you lose.

The differentiation is in the service and in the human part, where not everyone in a hinterland with internet connection can compete with you on the same level.

For the Media Intelligence industry the case is clear. AI is there to be used as a tool to perform a service quicker, better and more flexibly. There we use every new technology to our advantage. In the 150-odd years of the industry we experienced many life-changing and potentially industry-destroying technologies, like the VCR, the Xerox machine, MP3, the internet and now AI. They never destroyed anything, but in the moment they hit the market, the potential was there. So we hopped from Hype Cycle to Doom Cycle to Adoption.

AI again has the theoretical potential to change/destroy everything. We had our share of AI dystopia in the movies as kids (Terminator or Total Recall anyone?) Now again scientists and philosophers warn of the negative potential, rightly so.

As long as the human is kept at the center of all efforts – which should be easy as the human is footing all the bills – AI will be what it is supposed to be. A tool for the advancement of mankind. AI might be in the loop, but the human is the responsible, culpable and paying master.

Nowhere else is this so obvious as in communications. AI does not need human communication and so there will never be a comms analysis done just for the AI (it could do it for itself, but for what use?), but always for the human client.

This human client still, and in service industries increasingly, wants to interact with a human service provider. As long as we do not forget the human centricity, we will keep communications alive as an industry. When the AI stays in the human loop and not the other way around, all theoretical takeover scenarios stay in the movies.