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- Business 3.0 #004: 🤖 The AI Content Revolution: Unpacking the Dynamics of Supply and Demand of Digital Content in a Generative AI World
Business 3.0 #004: 🤖 The AI Content Revolution: Unpacking the Dynamics of Supply and Demand of Digital Content in a Generative AI World
Jonathan Sadlowe
June 28, 2023
Read time: 5 mins
The world of digital content creation is undergoing a seismic shift.
With the advent of Artificial Intelligence (AI), content creation has been democratized.
Platforms like Canva, for instance, use AI to help novice designers create professional-grade graphics, resulting in a 3.5 billion designs created in the calendar year of 2021, and 135 million people using the platform each month in 2023, up 240% since 2020.
However, a looming question casts a shadow over this new AI-infused horizon:
As the supply of content rises dramatically, is the demand for it falling?
It's a question rooted in the basic law of supply and demand.
A study from Microsoft found that the human attention span is decreasing, with the average person's attention span now at 8 seconds, down from 12 seconds in 2000.
This brings to mind the "paradox of choice" theory proposed by Barry Schwartz. This theory is evidenced in a study published in the Journal of Personality and Social Psychology, which found that too many choices can lead to decision paralysis and decreased satisfaction.
In our new digital landscape overflowing with content, the paradox of choice is a real consideration.
Before we draw hasty conclusions, let's take a pause.
AI has not only made content creation easier but also content consumption. For instance, YouTube's AI-driven recommendation algorithm drives more than 70% of total watch time on the platform, illustrating how the right content is finding us, and not vice versa.
Nevertheless, AI's transformative impact on the digital landscape has incentivized a favoritism for volume. In fact, YouTube creators uploaded 500 hours of video every minute in 2022, a sharp increase from previous years.
But does this mean we are sacrificing the quality of content at the altar of quantity?
An emerging trend indicates a shift from a content-centric model to a creator-centric one.
A recent report found that 61% of Gen Z users prefer creators who interact with their followers, indicating a shift towards valuing the connection between creators and their audience.
We're moving towards an era where the authority, authenticity, and uniqueness of content are treasured.
According to a CMO Council report, 90% of customers say authenticity is important when deciding which brands they like and support, suggesting audiences are evolving from being mere consumers to becoming active participants in the content journey.
After thoughtful analysis, here's the crucial point to understand:
An abundance of content does not necessarily herald a decline in demand.
According to an Insider Intelligence report, adults in the US spent an average of 13 hours and 11 minutes per day consuming media in 2022, a rise from previous years.
This suggests that we're not necessarily seeing a decrease in demand, but a shift in how demand is understood and evaluated.
The currency of the future may not be attention, but trust, loyalty, and a sense of community.
So, the question isn't whether demand for content will decrease, but rather how it will evolve in the face of AI and an exponentially increasing supply.
The answers to these questions will shape not just the digital landscape, but also our social interactions, culture, and understanding of value.
I’ll try to tackle that topic in a future newsletter.
That’s all for today, friends.
See you next week.
Jonathan
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