Last Monday I wrote about Meta CEO Mark Zuckerberg’s vision of “hundreds of millions” of small businesses becoming creators faster than creators are becoming small businesses. The assumption is that creators need to interact with their communities 24/7 the same way “hundreds of millions of small businesses” need to deliver “some combination of sales and customer support” 24/7, 365 days per year.
And, last Thursday I wrote about how Zuckerberg believes that “individual creators or publishers tend to overestimate the value of their specific content in the grand scheme” of Meta's artificial intelligence (AI) language learning model (LLAMA). He added an important caveat: “There are going to be certain partnerships that get made when content is really important and valuable.”
This vision reads like an exponentially larger version of a market dynamic the Interactive Advertising Bureau (IAB) has described as “The 200 vs. the 10 million”. In the past, the television marketplace offered a fixed supply of linear inventory to a fixed demand of buyers. 200 “retail-cartel” advertisers supplied 88% of U.S. network television revenue (the term “retail-cartel” applies to the brick-and-mortar retailers who have historically bought from networks).
But, Meta, TikTok and Google also have been proving over the previous six or seven years that over 10 million advertisers in the U.S. are willing and eager to spend on direct-to-consumer advertising. Those platforms have been democratizing the competitiveness of smaller brands in the advertising marketplace and pushing both advertiser supply and demand away from television.
They also have been pushing creators into the same territory that Hollywood studios and creators have long inhabited. Zuckerberg’s vision goes one step further in believing small businesses can occupy that territory, too, and in a model that blurs the lines between publishers and advertisers.
Ironically, that outcome may be better for individual creators and publishers than an initial read of Zuckerberg’s take suggests.
Key Takeaway
Creators and publishers worried about their IP being ripped off by Meta's AI models should rethink their opposition. Meta CEO Mark Zuckerberg is implicitly offering them a lifeline.
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“Alternative Television Universes”
IAB Executive Chairman Randall Rothenberg discussed some of the moving pieces of this dynamic in a since-deleted 29-tweet-long thread three years ago. I quoted some of it in an April 2022 essay offering “Five Recommendations for Streaming CEOs” after Netflix’s stock decline.
He wrote about how FASTs (free-ad-supported-TV services) like Tubi and Pluto livestreaming libraries of studio programming were creating “alternative television universes”. Genre-focused apps like Starz, Crunchyroll and AMC’s Shudder have built “niche universes”. The outcome will be “many multiple ‘televisions,’" each one striving to keep its own audience - an audience smaller than historical norms - locked in and blissfully unaware of those other televisions inhabiting other dimensions in different space-time continuums.”
Meta’s vision of “hundreds of millions” of small businesses as creators fragments this vision further and at an exponential scale. On Instagram, over 200 million business accounts are posting videos and photos. In the attention wars, small businesses can be “alternate television universes” on Meta’s platforms.
Audience Demand
But, this framing does not fit neatly into Rothenberg’s “many multiple ‘televisions’” concept. In one sense, Instagram is “many multiple ‘televisions’" because social media feeds competitively capture attention with video. Netflix regularly discusses this dynamic in its letters to shareholders.
Roughly half of U.S. adults (47%) say they use Instagram, according to a January 2024 report from Pew Research. 78% of 18- to 29-year-olds in the U.S. say they use the platform. That drops to 58% in the 30 to 49 age group. In both groups, a majority of Americans engage with social media as a form of television.
The more videos creators and small businesses produce for Instagram—manually or using AI—the less attention is available for television in the traditional sense of someone watching it in their living rooms.
On the other hand, algorithm-curated feeds of photos and videos randomly mishmashed together are not television. Netflix and FASTs have leveraged the medium of the internet to reimagine how consumers can watch and interact with their favorite shows and movies. But, Instagram and other Meta products simply seek to capture consumer engagement and attention with media and advertising by any means necessary.
“AI Television Universes”
Netflix defines its competitive challenge as capturing “time and attention” away from the likes of YouTube and Netflix. It also includes social media in that list of challenges and has included Instagram in that list.
So, a feed of AI-generated content from a small business on Instagram or another Meta app will certainly compete with “alternative television universes” like Netflix, FASTs and YouTube. I wrote in “The Media Revolution Will Be Prompted“: “The longer the long tail of competition, the harder it is for Netflix to win the attention and engagement” of its 280 million subscribers.
YouTube recently introduced a new Connected TV interface for creator content that blurs the line between premium streaming and YouTube creator content. It aims to help YouTube to capture more “premium” upfront and connected TV spending. YouTube is on televisions is capturing more than 10% of monthly TV consumption in the U.S. according to Nielsen— whereas Instagram is on mobile devices only.
But, that offering is still narrower than Zuckerberg’s vision for turning “hundreds of millions” of small businesses into creators: There are 125 million TV households in the U.S. (Nielsen), over 1 billion television households globally, but over 3.27 billion daily active people engaging on Meta apps.
Nothing either Zuckerberg or Meta management have presented suggests they aim to capture actual television screen time with AI-generated content the same way that Netflix or YouTube have been.
This may be because legacy media streamers, Netflix, YouTube and Meta each define their target advertisers differently.
A Question of Scale
In August I wrote about “The New Economics and Technology of Consumer-Driven Storytelling” and how "emerging business models like Inkitt and Fable are further innovating the payment mechanisms for consumers to compensate creators and IP holders."
On this point, it is worth noting that “hundreds of millions” of small businesses becoming creators offers IP holders better opportunities for compensation at scale than either of these platforms, or professional amateur creators leveraging AI.
The early years of radio and television broadcasts relied on sponsors to finance shows to reach millions of people. Back then it was a handful of major corporations, and today it is “hundreds of millions” of small businesses. Those small businesses can "sponsor" popular IP by producing AI-generated content but without the “show” as a vehicle.
There is a calculable return on investment for a small business using public domain IP or licensed IP to sell goods and services. There is also a sophistication to the marketing tools given to marketers within the Meta ecosystem—and YouTube and Amazon ecosystems—that professional amateur creators are purposefully not given.
This may be the more logical—and financially better—future than putting that IP in the hands of amateur creators.
Legacy media companies, Hollywood creators and creators more generally who worry about being ripped off by Meta and generative AI may want to rethink their opposition. Zuckerberg is implicitly offering them a lifeline.