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The Medium delivers in-depth analyses of the media marketplace’s transformation as creators, tech companies and 10 million emerging advertisers revolutionize the business models for “premium content”.

In last week’s “Disney+ Technology, YouTube Creators, Generative AI Tools & ‘Free Money’”, I originally used a different quote from Kara Swisher’s 2019 interview with IAC Chairman Barry Diller. I switched it out for another quote while editing, and this week it seems more relevant:

“…Amazon’s business model has nothing to do with anything anybody who’s been in the entertainment business has lived with their whole lives, which is, we have one job. We entertain the folks. If they like what we do, they buy a ticket or subscribe to this or get that, and then they get that in a fair exchange for their creative ability being essentially exchanged by somebody who says, “I’ll buy that thing.” Amazon’s model has nothing to do with it.”

Diller’s lament echoes Clayton Christensen’s concept of “jobs to be done”. 

“When we buy a product, we essentially ‘hire’ something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we ‘fire’ it and look around for something else we might hire to solve the problem.”

With an Amazon Prime subscription, the “job to be done” is free next-day or two-day delivery and entertainment is a perk. Amazon’s model has since had few imitators.

I wrote last Thursday that there is a market fear—some of which I discussed in “The Media Revolution Will Be Prompted”—that generative AI will soon emerge to do a better job of entertaining consumers than streaming. But, Christensen’s framing suggests that generative artificial intelligence (AI) will disrupt a fair exchange of value for creative ability because it can be hired to do the job human creators do. That is the dynamic we are witnessing play out now.

For these reasons, Diller has been beating the drum for the argument that copyright law and fair use—which under copyright law permits limited portions of a work to be used without a license or compensation—must be redefined.  He believes AI companies have “sucked up" all available content on the internet for training their language-based models and that "violates the basis of the copyright law.” His campaign reflects the existential dilemma media conglomerates now face.

Key Takeaway

The unfortunate reality for the market and for shareholders is that, even if media conglomerates have fewer reasons to exist, there are no other entities with the incentives or resources to defend their intellectual property from OpenAI and other AI companies.

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Total time reading: 4 minutes