Latest / The Media Odyssey / H1 2026 PART 1: BUBBLES, BALLS, & BIG AGGREGATION
Transcript
- Marion Ranchet: [00:00:00] Welcome to the Media Odyssey podcast. That is Evan Shapiro. Evan Shapiro: And that is Marion Ranchet. Marion Ranchet: This week on the pod, we're gonna do a bit of a deep dive on a couple of key trends from H1 that we've written and discussed at large. Evan Shapiro: And we're gonna spend so much time on these individual trends and a brand-new cross-screen attention index that I launched recently that we're gonna split this episode into two halves. So this is the first half, and then at the end of the next half, you can come back when you're on the beach or at the pool or at a barbecue and watch or listen to the second half. Sometimes you get into a workflow and you're like, "Ugh, I have to go to work again." And then every time I see you on Riverside, which is the platform we use to record this, it's just, it [00:01:00] just brings me back to that first conversation we had about why we wanted to do this, and the reactions we get from the audience really are incredibly gratifying. So thanks everybody for listening, for sending us your comments. We do take everything you tell us about this podcast to heart because we put the audience at the center of everything. And so if you have suggestions for us on how to make this better, or topics that you want us to cover, please let us know. We really enjoy the interchange with the audience. Marion Ranchet: And I think one thing that is nice about the pod and with you is it does take us a few minutes to get a bit of a higher road on stuff, right? Because I think every day we're on LinkedIn, Substack, and everything. It does allow for a bit of that perspective. And as H1 just came to an end, we thought it would be nice to take a quick look at the key trends from H1. We've, there's some of those that we've covered over the last few weeks, [00:02:00] may that be, vertical video, micro dramas. We talked about Netflix getting into podcasts, all of those things. We won't get into those. Those are clearly trends from H1, but we wanted to do a mini deep dive on a few things that kind of stood out for us that perhaps we didn't anticipate. So let's get started. I think one that is unavoidable, and we've covered this one over and over again, but it is the topic of AI, the AI bubble, something you feel strongly about. Evan Shapiro: Yeah. So this is one of my big predictions for the year is that the AI bubble was gonna burst, and what you're seeing is a, a bunch of financial experts, economists from around the globe basically getting on board with AI is currently in a bubble, and that there's a ton of warning signs that this is looking like 1999 and the dot-com bubble, which burst and really [00:03:00] destroyed the American economy. There are a couple of components to this. First of all, right now AI infrastructure investment in the United States is two-thirds of GDP. That's scary, right? And almost all of the demand, Scott Galloway covered this on his podcast earlier, or last week, and almost all of the demand for AI compute is coming from just two companies. Marion Ranchet: Yeah Evan Shapiro: which have kind of cuckoo valuations. OpenAI obviously being one of them. They lost thirty-eight billion dollars last year. They lost thirty-eight billion dollars last year. They're losing, they're burning somewhere around four to five billion dollars in cash every quarter. Then there's Anthropic, which is the new darling, and everybody's trading their pre-IPO stock off the market. And again, they're at a trillion dollar valuation, and [00:04:00] they're not profitable. We don't necessarily understand how much money they're burning, but we are about to find out when they go IPO positive. But if you want to look at the biggest warning sign, it's SpaceX. Marion Ranchet: Yeah. Evan Shapiro: SpaceX famously launched the most valuable IPO in the history of business, rising to two trillion dollars, immediately after the IPO. But since then, the valuation has dropped thirty-four percent. And then, Musk offered a bond. So they just raised a trillion dollars or whatever it was, in the market, on their IPO, and then they went back to the market for twenty-five billion dollars more on a bond offering, and that bond offering popped for a second and then fell like a fucking stone. And so this is a company that is really, if you wanna see how AI bubble bursts, it's the SpaceX bubble at this point, and it's gonna be followed by these two other IPOs that are coming in the second half of [00:05:00] this year. This is an irrational investment, and it's being propped up by Nvidia. Nvidia pumps money into the market so that other people can use it to buy chips from Nvidia and computing from a couple of different companies, and then it's this circular economy. It looks exactly like Cisco and the dot com bubble. And this is not just my opinion. I'm an amateur economist. I am listening to professional economists from around the world, including Alliance in Germany, which just called it a bubble this week. So this to me is one of the major problems with the current US economy is if things continue as they are, if the AI bubble bursts, it's gonna take down the entire US economy with it. Marion Ranchet: Yeah, and you mentioned you had another example of a company that is actually closer to our business in a way, indirectly, which is Oracle. Evan Shapiro: Yeah. So Oracle, [00:06:00] which is owned by sugar daddy Larry Ellison, who is personally backing his son's potential $111 billion acquisition of Disco Brothers, he has lost, personally lost $100 billion in net worth, in the last year. Oracle is down 40% year on year, and it's all about this overinvestment in AI infrastructure. Which is one of the reasons why and this came out this week, there are 12 states that are suing to block the Paramount Nepo Baby Disco Brothers merger. And there's a number of different reasons that they're using, which is anti-competitiveness, but also kind of collusion to get Donald Trump CNN. But what's about to happen is, on October 1st, Paramount owes David Zaslav and Warner Brothers Discovery $650 million every quarter that deal doesn't close, whether or not the [00:07:00] deal closes until they pull out. So that, that's gonna happen on October 1st. And now with this lawsuit, there's almost no way that the deal closes before October 1st. So Larry's gonna be on the hook for tons of cash going out the door. Secondarily, this lawsuit's gonna cause the Ellisons to expose everything that they've been talking about behind closed doors to the court in order to defend themselves in this lawsuit. And so the AI bubble and media's kind of future are intrinsically tied together, and this is problematic for the entire industry. If that deal doesn't go through, as much as I don't think it should for anybody, the shareholders of Paramount, the shareholders of Warner Brothers, everybody's gonna suffer at the end of the day on that. But if it doesn't go through, think about the hole that's gonna leave in the media world. We've already frozen in place waiting for the deal to close, and if the deal doesn't close, oh, my goodness. The [00:08:00] AI bubble kind of winds throughout almost everything at this point. Meta's business model, Microsoft's business model, Google's business model, they're all tied to this irrational inflation called, it's, actually chipflation. And here's one other component to this, 90% of the companies who have invested substantially in AI in the last two years are reporting almost no reward for it. There's a small, like 3 to 5% increase in productivity or decrease in costs. But on the flip side, they're all reporting that the costs of AI are far outweighing any of the benefits that they've gotten. So there's this, I think AI, I use AI all the time. We'll talk about how I used it later in this podcast. I think it's a powerful compute tool, but if you could look back at the dot-com bubble burst, the internet's an important part of the world right now, right? The internet, it didn't go away because the bubble burst. Marion Ranchet: No. Evan Shapiro: [00:09:00] It just got rid of all the irrationality in the market and then forced everybody to find real businesses. I think we're on the precipice of that, and I think it's gonna happen in the next six months. Marion Ranchet: Yeah. It will act as a cleansing. What's fascinating about the fact that you're saying, that the US, economy is so tied to the AI bubble. I will say that, most of what is being done, on AI is coming from the US, from you guys, right? To some extent in China, et cetera, but, for many countries it's a big no-no to use those. And so in Europe there's, a lot of discussion, right? We feel powerless. It feels like what's gonna happen now is the same that happened with the internet. That is that, someone else is gonna build it, and whatever we're gonna be building, we're gonna be building on rented rails, right? So right now, all of the internet is on big tech. So similar conversation are happening with AI. You have Mistral AI in France who's [00:10:00] pushing for a European playbook, and that sovereignty. The question, what I wonder is perhaps it's a good thing that we're a bit on the outside looking in right now. Then that cleansing happens, provided that we've done the job in the meantime to actually fund and support European companies building, AI model, AI technologies, et cetera. Perhaps we could, we could come out, I wouldn't say winning, but perhaps with a bigger stake than what we're seeing in the internet. Evan Shapiro: Yeah. I think that there's a number of things happening in the United States that is going to basically shift the center of economic power on the planet Earth away from America and towards Europe in particular. And perhaps, Latin America or South America in particular. But I don't know if that's necessarily gonna happen because you guys tend to, [00:11:00] I'm not gonna say over-regulate, 'cause I'm a big believer in regulation, but sometimes you just get in your own way with regards to growth. Yeah. And, it's really remarkable how United States really controls the entire big tech world. Marion Ranchet: Yeah. Evan Shapiro: Google, Meta, Amazon, Microsoft, these are all American companies. And it, I do think there's an opportunity for Europe to step into the void that my president is creating. The US economy is in real trouble right now because of him, not because of other macroeconomic forces, but because of this forever war he decided to start in the Middle East. The price of gas in the United States is now $7 in some places. Yeah. Smartphone sales are falling because the cost of phones is, are rising so dramatically. The cost of everything is higher in the United States, and it's really having a deleterious effect on the United States economy. So I do think Europe has an opportunity, if they can keep themselves together to step into the void and [00:12:00] become the better trading partner than the United States. Marion Ranchet: So I'm gonna make a comparison with the defense budgets, right? Yeah. So the fact that, again, thanks to your president, we've had to rethink the relationship with the US, when it comes to the NATO collaboration. And you're seeing countries, I'm thinking France, I'm thinking Poland particularly, because they're on the first, they're on the front, so to say. All, everyone is boosting, increasing, the budget dedicated to defense, understanding that, we've been, again, over-reliant on you guys, for that. The thing is, it does take time, and when you're speaking to experts, everyone is saying it's gonna take at least 10 years to actually start seeing the benefits of that. And as we're seeing right now, there's something new popping up every six months, that is challenging us there. So when it comes to our ability to build somehow a European [00:13:00] AI model, if we decide now and invest money now, are we gonna be able to see the result, the fruit of that, quickly enough? That remains to, to be seen. One thing that I wanted to talk about, just to wrap this section on, AI, is the topic of AEO, GEO, GEA, which is essentially the version, the new version of SEO, SEA in the Gen AI, worlds. And what matters there, again, is that it feels like, from a consumer perspective, let's take it to the consumer for a bit. Those LLMs, those models are becoming this link between, us, the consumer, and whatever output, and data and insights, we want. And we've seen it with the news publishers, as often they were hit the first when it came to the internet. The same is going now, right? Their organic traffic is going [00:14:00] down, et cetera. They need to find a way to exist within this whole new, wild world. And what I've been seeing that's been quite interesting is that you're starting to see company here on this side of the ocean. I don't know what's happening on your side. But whether that's news publishers, ad sales house, technology companies who are trying to figure out how to make sure that, us as content creators as a whole, whether you're a big media organization or just us as creators, we can be surfaced within there and can be attributed within those ecosystem. How we can see the traffic going our way and not just have, our data and whatever we're doing being, let's be honest, in a lot of cases stolen to be trained on. And so it's gonna be interesting to see. You, mentioned that we over-regulate. I agree. It has sometimes the impact that it stifles innovation. But at the same time, what we're seeing, and The New York [00:15:00] Times was, really adamant in June during the WAN-IFRA News Summit. They said that OpenAI is essentially stealing from everyone. And then on stage, the OpenAI guy said, it's our way or the highway. "We're gonna find a way. You can work with us, or we're gonna find a way to scrape your content." He was responding indirectly to The New York Times. At the ecosystem level on the bubble, let's see what happens. At the media and entertainment level, I do think that we all need to figure out how to make do with this new equation, and I think it means that a lot of companies need to figure out, their, AI strategy, as a whole. Evan Shapiro: Yeah, and I think there, are a couple of components to that. First of all, Sam Altman is the devil he's just, he's a sociopath. And if all you need to do is read Ronan Farrow's article about him in Vanity Fair, it's a, I don't know, 100,000-word treatise [00:16:00] on just what a liar he is. He's incapable of telling the truth. Even when he's asked about how he plays ping pong, he tell, he immediately goes to a lie. And so don't trust anything OpenAI says. Marion Ranchet: No. Evan Shapiro: On the flip side of that, he's not wrong in that this is the new internet. And so just when we hear public broadcasters say, attribution on YouTube is the real problem. When we put our stuff up on YouTube, we see the attribution go down," my answer is just get better at YouTube. I'm sorry. Marion Ranchet: Yeah. Evan Shapiro: You have to get better at marketing, and it's the same thing. I am in the midst of training LLMs on my voice and then making sure they attribute everything I say to me. And if you go to any LLM at this point and you say, "Who coined the term the affinity economy?" All of them will say Evan Shapiro, and then they will point to my newsletter in the results. There is a way to train these models to give yourself the attribution that you want, [00:17:00] but you have to have people native to the products- Marion Ranchet: Yeah ... Evan Shapiro: working at your companies. It's really crucial that companies start hiring people who are, A, younger than 100. And two, that they're, that they grew up using these products so that they can actually shift the genetic code of these companies to win the AI battle, not lose the AI battle. Yeah. It's hard. I'm not saying it's easy, but this is, these are the table stakes of the next era of the internet. The, it, you have no choice. Marion Ranchet: No. Evan Shapiro: It's like saying, "I don't like oxygen." Then too bad, you're dead. And this is going to be, by the way, these LLMs are paying enormous fees. Reddit's whole business right now is selling its metadata to LLMs, and they're doing quite well as a result of that. So it is crucial that every company, especially companies that [00:18:00] practice in any kind of intellectual property, not just media and entertainment and not just news, but architecture firms and pharmaceutical firms and anybody who writes, you have to understand these products. You have to train yourself on them, and you have to make them bend to your will, not the other way around. Marion Ranchet: So it's interesting you mention that because a bit of promo for SME Live taking place on September 10th, we're actually gonna do a live episode together. For those listening to us, we're in Amsterdam for IBC. Come with. You can see us live. But so in the morning, I'm actually starting the day with a couple of sessions called AI in Action because I'm kind of sick and tired of the, the decks, the telling. I wanna start showing. So I've actually asked several companies, to do exactly that. There's gonna be someone who's coming to say that, if you're using AI as is, but to the point you were making, without building a knowledge [00:19:00] foundation based on whatever your company is doing, then the results are gonna be subpar. Plus, whatever's gonna come out is gonna be biased towards big tech because those are trained and built by big tech. So of the value of doing exactly what you're doing, that knowledge, center, not starting from scratch with a B2C product that you and I could be using, you need to use your own version of a product, of a whatever. So I'm gonna have several of those, a subscription management system who's building an agent to actually do one of the most important thing in media right now, which is understand how to acquire, retrain, and retain subscribers, things like that. So be there, we start at 11:00 that day Evan Shapiro: Yeah. I will be there. I can't wait, so I'm looking forward to it. Marion Ranchet: I know you'll be there. You may miss those because I think you have something in the works for- Evan Shapiro: I have. I, yeah, I'm doing the World Skills Summit that morning with IBC, so that'll be very exciting. But I will move right over from that, [00:20:00] to, Marion Ranchet: Good luck ... Evan Shapiro: the, to your, Streaming Made Easy event that is now a tradition. And by the way, people love your event. They absolutely, they came away from last year's saying, "This is one of the most valuable things I've ever done." Yeah. And I've talked to a ton of people who are looking forward to this year. Marion Ranchet: Nice. I have a bit of that second album, you know, after a great first album. Evan Shapiro: Sophomore album. You're worried about the slump. Marion Ranchet: Yeah, exactly. Evan Shapiro: Yeah. I get that. Marion Ranchet: And see, I'll try to- Evan Shapiro: I get that. That's all I think about all day. Marion Ranchet: Yeah. I'll be like Radiohead. I'll try to be like Radiohead. Now, in terms of other trends that we've been seeing, I think, there's a lot of stuff. I'm gonna throw one. How about creators? Is this still the hot new thing, or it's business as usual? What are you, what have you seen in H1? Evan Shapiro: Yeah, I think, you were at Cannes Lion. There were more creators there than ever. It was really the creator Cannes Lion, I think, more than AI, more than anything else. That seemed to be the hot topic there. And [00:21:00] creators are gaining more power and becoming more famous. It's now the center of every conversation. Unilever's CEO, and they've made major investments in creatordom, he just said that they're gonna have a creator in every zip code so there is this real recognition that the center of cultural gravity on the planet Earth now lives with creators. On the other hand, I don't know, you look at how much Accenture Song paid for Whalar- Marion Ranchet: Yeah ... Evan Shapiro: Agency. and, you look at the price last Cannes, that Publicis paid for Influential, and I'm not sure that the thread is necessarily being held together in the way that we would think it would. Meaning, I think there's just the way media does, which is they just sheep, right? They herd towards whatever the smart person's doing in front of them, and so they're just following the [00:22:00] crowd as opposed to really understanding how to work with creators. If you talk to Shira Lazar or anybody else who really is an advocate around creatordom, every conversation with a creator is, "how little can we pay you to do all of this work?" And there isn't necessarily the actual appreciated value in the work that creators do. Marion Ranchet: Wow. Evan Shapiro: On the other hand, I think creators aren't necessarily understanding how much they're being exploited by these major brands and by these agencies, and they're taking these brand deals very often at the detriment of their own relationship with their own audience. And you're seeing the efficacy of creator posts actually diminish on an ongoing basis. On the flip side, when you look at brands who are actually acting like creators, so the Kit Kat Heist, which, I think won a Cannes Lion award, Coaches campaign around Explore Your Story and reading, I think that's really gonna be the major move [00:23:00] over the next 12 months and I've talked to Neil Waller about this extensively. I think he believes the same thing, which is creators are actually going to become brands, and brands are actually gonna become creators. And this is gonna create a new environment around the creator economy by probably the middle of next year. By next Cannes Lion, I think the whole conversation is gonna shift towards a more blurred line between creators and agencies. They're actually gonna be seen almost as the same thing. Marion Ranchet: Yeah, I agree. I think, one of the predictions I had for this year, was the rise of the corporate creator, and by that I meant companies acting as creators but also empowering their staff to embody the brand, right? So true believer in that because one thing, where I have my doubts in terms of trad media and creator partnerships is I think there's a scale challenge. I [00:24:00] think it feels very manual and hard to scale right now. And, media is, and, even creators, they need to go fast, but their speed is not necessarily the same. How they work is not the same. And so I think there's a bit of a mismatch. So for sure, I think each side will actually learn from the other, but only a few partnerships will really truly win, the way that I see it. Evan Shapiro: Yeah, I think you're absolutely right. We, I had a really cool panel, which is actually up on my Substack, with, Wayne Davison from Little Dot, Ross Martin from Known, and this amazing creator who talks about brands and marketing, Joel Marlon-Arsen. And Joel has this really cool theory around employee-generated content, and we discussed that at length. The Staples Baddie is a really good example of this, but he has a ton of examples on his TikTok feed. ColdestJoel is his, [00:25:00] handle on Instagram and TikTok. Check it out. It's really smart. But I do think, I think you're absolutely right, and I was just talking to a, a client of mine yesterday about really leaning into employee-generated content. Marion Ranchet: Yeah. Evan Shapiro: Not just hiring creators as contractors, but hiring creators in-house. Marion Ranchet: Yeah. Evan Shapiro: The same way you used to hire someone who got a marketing degree, hire someone who earned their own creator degree online and bring them in-house and put them at the center of your culture. That, I think, is the next big wave of creatordom is stop treat, stop using creator like it's its own thing. Act like it's, "Oh, he's a marketer. She's a, she's an advertiser." Creators and advertisers and marketers and writers and directors, all you need to do is look at Obsessed, and, or Obsession and, and, Backrooms and all of these creator movies that are actually crushing it at the box office right now, and you can see that the training of a creator [00:26:00] is the same thing we used to use film school or journalism school or marketing degrees for. And I think that's really the next great move of creatordom. Marion Ranchet: On to the next trend, which I think I'm both depressed and excited by it, which is the state of kids media. So it's you talk to the ecosystem and you can feel, people's despair, right? When it comes to seeing commission being down, it's being harder to put together projects, et cetera. But three things, and actually I think we've had one per- two maybe, person on, on the pod speaking about that. But so we've had the team from ToonStar proving that you can make do with the ecosystem and actually play with it to be able to produce amazing content with the right mix of human and AI [00:27:00] production tools. And do that in a way where you're consistently iterating, et cetera. And then we've had, one, we haven't had them on the pod, I did a piece on, my Substack. You actually did something with them at Stream TV, which is the team from LUMI, who's like, "There's a way to make money on YouTube. We're gonna make money on YouTube for kids media." And the last one, is actually, Super Awesome, which is a UK company, who's been handed the keys to advertising for below 13 segments on Roblox, which is, you know, around 35% of the platform, if you look at those people who actually, agreed to pass and verify their age. So again, mixed feelings, but, going into H2 a bit hopeful to see some companies really trying to tackle this. Evan Shapiro: Yeah, so we had Common Sense Media, who I did that [00:28:00] kids landscape report with, and we had PBS Kids on stage with us. and you couldn't make it, so Jamie sat in for you, and that's one of our episodes that we released very recently on the state of, the kids' content economy. And you're absolutely right. There are a number of different things at, play here. Netflix, Amazon, the rest of the streamers have really started to pull back, not to start it. They have pulled back dramatically on kids' content commissions in the last number of years. The main reason for that is what they see is they're, they don't need to order new shows. They can just keep using the same shows over and over again 'cause kids are pretty stupid, and they watch the same thing every day. But on the flip side, parents are really just desperate for good quality, kids' content from trusted sources, and they're turning more and more to YouTube as that platform. But simultaneously, YouTube has really destroyed the [00:29:00] economics of distributing kids' content on their platform by basically not demonetizing but really making it very difficult for kids' content channels to monetize through advertising on their platform because they're afraid of regulation, and I understand why they're afraid of regulation. At the same time, they're not caretaking. They are the biggest kids' channel in the world, and they have not taken care of that ecosystem. It is not a priority for them. And I have done everything I can. I know they listen to me. You know they listen to me, and I have done everything I can to hold their feet to the fire with regards to their responsibility for fixing this. It is their responsibility to fix, this issue. On the flip side, the streamers are just making a huge error here. Yeah. They're putting all their money into sports, which is enormously expensive and does not retain users. People come in for the game, and then [00:30:00] they cancel. And it's not a retention tool. It's a, nice pop. It looks great on the quarterly earnings when we can say we broke our streaming record because of that one football match or that one home run derby. I watched the home run derby, on Netflix last night, but then it's a back to the baseline phenomenon. Kids' content is the retention tool. It is absolutely the acquisition and retention tool, and I think all the streamers, most especially Netflix, has really missed the mark here. I think they're hurting their business by not investing the way that they did just five years ago in kids' content. Marion Ranchet: Yeah, they're focused on, licensing, over and over. They do now tap into creators that got famous on YouTube and thinking that it's gonna take people off YouTube onto Netflix. It is bringing a lot of eyeballs, whether that's, Mark Rober, Miss Rachel, amazing results, but [00:31:00] there's, why not nurture talents themselves? They know how to do that. They've proven that they know how to do that. So I think it's good. Evan Shapiro: And if you look at, and if you look at our friends at BBC Studios, who we just had on the pod recently that we shot at Cannes Lions, they're crushing it with Bluey, and they're growing new IP in the kids' space. In fact, they're building out their entire, what they call affinity vertical for kids and family. That is, that's the model. Follow that model. It's very, and by the way, they're happy to license you their content. It's the business they're in. So I just think that the world really needs to reexamine, especially the the media elite, needs to reexamine its relationship with kids' content. That said, ToonStar just signed a huge deal with Fox. You're right, Disney just signed a big deal with Animage and this JV that they have with Hasbro around Lumi. So there are signs there, and ToonStar really does have an excellent model [00:32:00] for animation. When you look at how much Disney just spent on the live action remake of Moana, which is tanking- Marion Ranchet: Yeah Evan Shapiro: absolute disaster, and then you look at how quickly ToonStar can make brand new IP in animation inexpensively, effectively, profitably, that to me, there, there's a great model there. So that's the end of the first half of this season finale episode. If you haven't had enough of us yet on the season finale of season two, go over to the part two season finale of the Media Odyssey Podcast.