2023: Year in Review & Looking Ahead
Five key trends at the intersection of media and innovation that we can’t stop writing about all year
As the year winds down and festive spirit surrounds us, it’s a prime moment to reflect on the past year and review the most significant trends that have emerged at the intersection of media and innovation. Driven by the meteoric rise of generative AI, 2023 has been a year of major developments in tech and media, with ongoing trends culminating in major landscape shifts in OTT streaming, social media, and immersive technology. Moreover, despite mounting economic uncertainty, consumers are nevertheless doom-spending on fun products and experiences that make them feel better. All these developments are setting up a dynamic innovation landscape as we head into 2024.
The Rise of Generative AI
First thing first — generative AI is undoubtedly the headliner of the year in innovation. Ever since ChatGPT’s public launch in November 2022, the tech industry has been reshaped by an explosion of tools and a surge in consumer interest, particularly among younger generations. This has prompted nearly all tech giants and VC firms to invest heavily in the space, while also activating some new competitors, and we have been tracking its development all year long, with a dozen articles that you can find on our Generative AI landing page.
We first pondered about ChatGPT’s marketing implications back in February, right before the AI arms race kicked off in earnest in the spring with early rounds of Bing vs. Bard as Microsoft and Google rush to integrative generative AI into search. Soon, more big tech companies, including Meta and Amazon, started to play catch-up with the category leaders, namely OpenAI, its main investor Microsoft, and its main rival Google. The latest generative AI products from Google & Meta illustrate how far this sector has come in just a year. Now, a full year since its public debut, the mobile app versions of ChatGPT have topped 110 million combined installs and have reached nearly $30 million in consumer spending, per the latest tracking data from data.ai.
Yet, as the year winds down, generative AI seems to be taking a pause after a year of rapid growth. The recent saga of Sam Altman vs. the board of OpenAI highlighted a growing divide between the different fractions in AI development, as tensions over ethics, risk, and regulation become intertwined with the race for technological advancement and commercialization. Following the incident, OpenAI stopped letting new users sign on for its paid premium tier a week after the major upgrades to ChatGPT it rolled out at its first developer conference, while also postponing the launch of its GPT Store to 2024.
Looking ahead, while the commercialization push will likely persist, expect a more nuanced approach from both the tech companies and the consumers in 2024. Also, keep an eye out for the debate over open source vs. closed AI models, more AI products trained on licensed data from publishers, as well as an emerging class of AI-oriented wearable devices, such as the Humane AI Pin, and the Meta’s latest Ray-Ban Glasses.
Streaming Landscape Shift: Ads, Rebundling & Interactive Ads
2023 is the year that Hollywood became disillusioned with the streaming model. The streaming wars are now over, and Hollywood is scrambling for a new way forward. After years of high-growth but unsustainable spending, the industry is facing high churn rates, lower profits, and disillusionment with the ad-free subscription model. This has led to an industry-wide reckoning, with media giants implementing major cost-cutting measures, restructuring, and rethinking their strategies.
This landscape shift in entertainment distribution was also spotlighted and exacerbated by the historical double strikes that ground Hollywood to a halt this summer. When we observed the WGA strike’s effects on the Upfronts in May, it was clear that media companies were doubling down on ad-supported streaming to make up for the relatively thin profit margins of streaming services, which contributed to a key motivating factor — the loss of residuals for writers in the streaming era — behind the strike.
Looking ahead, most media companies are leaning on ad-supported tiers to supplement their revenues while trying to figure out new ways to recreate the cable bundle on streaming. Verizon recently introduced a new package for customers that combines ad-supported versions of Netflix and Max for a mere $10 monthly fee, and there’s buzz about Apple and Paramount discussing a joint bundle of their streaming services, potentially offering consumers more content at a lower cost. Earlier, Disney had reached an agreement with Charter to allow its cable subscribers to add Disney+ and ESPN+ to their cable packages. These experiments in re-bundling reflect an industry-wide shift in content delivery and monetization strategies.
Meanwhile, a parallel development in streaming is the efforts to make streaming ads more interactive and effective, which could receive a further boost in 2024. Unlike traditional TV ads, interactive ads can provide valuable data on viewer engagement and other metrics. With streaming services like Amazon Prime Video and Peacock continuing to experiment with interactive or shoppable streaming ad units, they will allow viewers to interact with the brand content for immediate purchases or deeper engagement.
Social Media Pivot: Decentralization & Social Commerce
This year, the social media landscape was in flux from start to finish. As Twitter gradually implodes under Elon Musk’s hazard-prone leadership, a number of alternative platforms have sprung up, yet no one has truly broken through into mainstream consciousness besides Meta’s Threads. We speculated about Threads’ long-term prospects after the success of its initial launch in the U.S., and more recent data suggest that the app is still slowly building momentum, hitting “just under” 100 million monthly users in late October. Plus, the app’s recent launch in European markets should help the platform to continue its growth trajectory.
As user fatigue with the centralized giants of social media deepens, 2023 has witnessed a small but significant rise in the popularity of decentralized platforms, such as Mastodon and Bluesky. These blockchain-powered networks offer a fresh alternative, as they respond to the growing user fatigue with centralized social media and their misuse of user data. The desire for a more equitable, user-centric digital social experience can be a powerful force. However, major adoption hurdles remain in terms of scalability, user friendliness, and content moderation for decentralized social apps.
While brands and marketers grapple with the shifting competitive landscape of social media, a related strategic pivot is also happening in social commerce. After the initial push for live commerce failed to gain much traction in the U.S., platforms like TikTok and Instagram are ditching livestream-heavy tactics and focusing on user-friendly tools like shoppable posts and creator collaborations. As social media remains the primary discovery mechanism for many consumers, innovation-minded brands should continue testing these new social commerce tools in 2024.
Taken altogether, the chaos and uncertainties indicate that social media is entering an era of interregnum, as the existing paradigm starts to shift beyond recognition, yet the future remains out of focus. Previously dominant platforms are starting to give way to new alternatives, with ongoing experiments in decentralization and business models. Perhaps 2024 will bring some clarity on the paths forward.
Mono-Culture Revival: Barbenheimer & Funflation
After years of cultural fragmentation driven by algorithmic feeds, 2023 saw a much welcomed revival of mono-cultural events. Evidenced by the box office phenomenon of Barbenheimer, as well as the stadium-filling tours of Taylor Swift and Beyoncé, consumers showed an increasing appetite for shared cultural experiences that unite large audiences. This trend marks a shift from the individualized, niche content consumption that had been prevalent, indicating a renewed demand for shared experiences. When people participate in these mono-cultural moments, social media becomes a megaphone, amplifying the shared experience and creating a sense of belonging that transcends algorithms and echo chambers.
Of course, it also helps that, in this post-Marvel world, consumer brands are emerging as the new hot IP, and a new wave of branded blockbusters, of which Barbie is a prime example, is about to flood the pop culture scene. Moreover, the critical success of Barbie proves that smart filmmakers can leverage familiar brand IP to tell interesting stories that hopefully transcend beyond simply being entertaining, feature-length commercials.
Naturally, brands want in on the action, but keeping up with the fast-changing online culture has not been an easy task. As our own Katy Geisreiter argues in her piece dissecting the brand-centered cultural trends, it turns out that the best method for marketers to deal with the chaos of today’s pop culture is to lean in to your audience and empower them to take actions, especially offline actions that bring people together.
This collective yearning for shared cultural experiences also points to some interesting changes in consumer behavior amid economic uncertainties, which we wrote about earlier this year and were further reflected in the holiday shopping trends. Looking ahead, the curious phenomenon of “funflation” and more recently, “doom spending” will continue to shape consumer spending amid rising economic anxiety and geopolitical tension. By embracing the power of shared experiences and authentic connections, marketers can ride the wave of this cultural shift by creating branded experiences that foster connections and empower consumers to find joy and purpose even in uncertain times.
The Dawn of Spatial Computing & Immersive Tech
Lastly, 2023 is a monumental year for mixed reality technology, or, as Apple likes to call it, spatial computing. The unveiling of the Vision Pro headset at Apple’s developer conference in June heralds a potential turning point for both augmented reality (AR) and virtual reality (VR) technologies, especially in regards to their prospects of moving beyond mobile and growing into standalone media channels. At its iPhone 15 launch event in September, Apple also shared more information about the proprietary immersive, 3D video format to be used on Vision Pro.
Apple’s official entry into mixed reality hardware is also reigniting the tech industry’s interest in the VR sector. For almost a decade since Facebook (now Meta) acquired Oculus in 2014, Silicon Valley has been endeavoring to make virtual reality (VR) a mainstream technology. Despite these efforts, VR has not yet become a widespread consumer technology. Meta, rebranded from Facebook, continues to dominate the VR hardware market, leading with a 50.2% global market share as of Q2 2023, At its Meta Connect 2023 event in September, new Quest 3 headsets were announced, along with a new set of Ray-Ban glasses that promises to incorporate generative AI models into its user interface.
Will the Vision Pro be an iPhone moment for immersive experiences? It’s too early to tell, but 2024 will surely bring more clues to how the immersive tech sector will shake out. Apple’s entrant in the space, and its competition with Meta, could help move the market closer to the point of mainstream adoption among demographics that have been resistant so far.
Although Vision Pro won’t become available until early next year, there is still plenty for innovation-minded brands to do in preparation for its arrival. Branded assets need to be upgraded to 3D ones, and existing mixed reality experiences should be converted into compatible formats. In any case, its positive impact on the VR market should not be overlooked.
