Future Development Trends of the Media Industry: Media Emerges as the Strongest Direction for AI Applications
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"Internet+" continues to drive the evolution of traditional economic forms and accelerates the integration of the digital economy and the real economy under the impetus of innovation. The media industry is actively advancing digital transformation, increasing the proportion of the digital economy, with a clear trend toward industrial digitization. First, the planning, editing, and publishing of traditional media will move toward a comprehensive upgrade integrating cloud computing, big data, and 5G technology, while building an AI middle-platform architecture tailored to business processes and application scenarios. Second, the media industry is increasingly embracing internet thinking, promoting the shift of traditional advertising models toward new models such as e-commerce ads and information flow ads, which are oriented toward traffic conversion.
2023 Overall Landscape of China's Media Industry
Research data shows that the global media industry's output value reached $2.2 trillion in 2021, a year-on-year increase of 6.5%. The growth of the global media industry has recovered to a level above global GDP growth, becoming an important force driving global economic recovery. In 2000, the total output value of China's media industry was only 150 billion yuan, breaking through 1 trillion yuan in 2013, 2 trillion yuan in 2018, and remaining positive in 2020 despite the impact of the pandemic. Through top-level design and specialized governance, the state has guided the healthy development of the media ecosystem. The total output value of China's media industry has grown steadily, with the digital economy in media flourishing as the scope of media expands, demonstrating strong momentum in building a strong network nation and digital China. In 2021, China's media industry showed restorative growth, with a total output value of 2,971.03 billion yuan, and the growth rate increased from 8.40% in 2020 to 13.54%, returning to the double-digit growth level of 2019. From a segmented market perspective, internet advertising, internet marketing services, mobile data and internet services, online games, and online short videos and e-commerce are the five industries with revenues exceeding 100 billion yuan, all maintaining stable growth.
From the perspectives of market, technology, and capital, the mobile internet market, after experiencing explosive growth in its early stages, will gradually enter a phase of adjustment and segmentation. New technologies such as artificial intelligence, virtual reality, and autonomous driving will influence the future development trends of the media industry. Meanwhile, the strong capital advantages of internet companies are becoming increasingly prominent, and they will ultimately shape the future overall landscape of China's media industry.
The more thoroughly the internet penetrates, the more it can capture non-mainstream long-tail demands. Technology can bridge distances, bringing together users with similar personalized needs across a wide range and forming profitable business models. The future trend of media market segmentation will differ from the past. On the basis of verticalization and specialization, "personalization" and "community-based" segmentation models will gradually emerge. Future corporate competition will no longer be about traditional price wars, brand competition, or sales channel competition. Instead, competition between ecosystems in the internet era will become a critical factor determining corporate survival. In the internet era, platform providers are the most crucial builders of ecosystems.
Currently, the global media industry is in a period of stable development, with an annual growth rate of around 5%, accounting for approximately 2.4% of global GDP. Particularly, the development of the internet in China has largely kept pace with the world, driving the continuous growth of digital media. Therefore, although non-digital media remains the primary revenue source for the global media industry, this landscape is likely to undergo fundamental changes in the next 3-4 years.
<u>Media Emerges as the Strongest Direction for AI Applications</u>
The digital economy is surging. Although the concept of the digital economy is not new, the first quarter of 2023 saw ChatGPT skyrocket to fame, the release of the Overall Layout Plan for Digital China Construction, and the establishment of the National Data Bureau. The convergence of industrial technological revolution and policy-driven initiatives has propelled the digital economy into a wave of unprecedented momentum.
Since the 14th Five-Year Plan period, the continuous expansion of 5G commercialization has brought new development opportunities and growth drivers to the media industry. News and information, particularly internet-based video content, are the most significantly impacted sectors. The live streaming and short video industries are set to experience explosive growth. With the elimination of technical barriers for short video creators and the high-bandwidth, low-latency features of 5G, these industries will flourish further. This sector is also the most immediately affected vertical by 5G, presenting opportunities for new dark horses to emerge. In the 5G era, new forms of communication carriers, such as VR and AR, are expected to appear. The widespread application of low latency will significantly enhance user experience, making information acquisition through devices like VR increasingly common. News and information content will become more diverse and enriched.
China's media industry still faces significant challenges in film and television production—not due to technical equipment limitations, but rather the difficulty of perfectly integrating high-quality productions with commercial success. In the gaming sector, the lack of innovation is a pressing issue. The media industry encompasses cultural output, making the essence of spiritual civilization its most critical aspect. The operation of business models should shed some of their浮躁 (restlessness). The threats to China's media industry mainly come from two sources: For the book publishing industry, the diversion of audiences by new media has placed traditional publishing under considerable competitive pressure, with book distribution and retail sectors feeling the challenge from online bookstores like Amazon and Dangdang. For new media industries (e.g., online advertising, movies, public relations, and cable TV), which are in their early growth stages, the vast market potential allows them to rapidly capture market share, while traditional media, with its high market saturation, faces new challenges.
At the beginning of the new year, many local governments outlined their digital economy development goals through their First Meeting of the Year, tailoring construction blueprints to their regional characteristics.
On the industrial front, ChatGPT, hailed as the iPhone moment for AI, has captured widespread public attention and sparked a capital race. In February, OpenAI's chatbot ChatGPT reached 100 million monthly active users, becoming the fastest-growing consumer application in history. The concept of AIGC (AI-Generated Content, using AI technology to create content) has also gained immense popularity. Currently, major Chinese tech companies like Baidu, Alibaba, and SenseTime have launched their own large AI models, marking the beginning of an industry-wide competition.
The digital economy is undoubtedly the keyword of the first quarter, with many analysts predicting it could remain the main theme throughout 2023. Data seems to support this trend: On April 6, Wang Jun, Director of the State Taxation Administration, announced at a press conference that the core industries of the digital economy grew by 14.1% year-on-year in March, accelerating by 7.3 percentage points compared to the previous year. Among them, digital element-driven industries and digital technology application industries grew even faster, increasing by 24.5% and 19.8% year-on-year, respectively.
Regions Launch Digital Economy Competition
Policies such as the "Opinions of the Central Committee of the Communist Party of China and the State Council on Building a Data Foundation System to Better Leverage the Role of Data Elements" (known as the "Data Twenty Articles") issued at the end of 2022 and the "Overall Layout Plan for the Construction of Digital China" released in February 2023 have continuously catalyzed the development of the digital economy.
The "Overall Layout Plan for the Construction of Digital China" states, "By 2025, a horizontally connected, vertically integrated, and strongly coordinated unified advancement framework will be basically formed, and significant progress will be made in the construction of Digital China. By 2035, the level of digital development will rank among the world's leaders, and major achievements will be made in the construction of Digital China."
While central policies provide the top-level design, local governments are also making strategic moves in the digital economy. A review of local government work reports reveals that "increasing the added value of the core digital economy industries" is a common goal. In this "championship" of digital economic development, each region strives to achieve outstanding results: Beijing aims for a 6.5% growth in the added value of the digital economy in 2023, accounting for about 43% of GDP, with the core industry's added value reaching around 25% of GDP; Yunnan targets a more than 20% increase in the operating income of its core digital economy industries; Jiangsu aims to exceed 5.5 trillion yuan in the scale of its digital economy; Chongqing seeks a more than 10% growth in the added value of its core digital economy industries; and Hunan aims for over 15% growth in its digital economy, with the digital economy accounting for more than 33% of its regional GDP.
Current data shows that some cities have already achieved notable results. In the first two months of the year, Ningbo added 130 new large-scale enterprises in its core digital manufacturing sector, achieving an output value of 680 million yuan, a year-on-year increase of 29.6%, contributing to a 0.3 percentage point increase in the overall industry's output growth. Meanwhile, Chongqing's Yuzhong District saw a 31% year-on-year increase in software business revenue.
However, regions need to avoid "herd behavior" in their investment and layout strategies for the digital economy. The understanding of the digital economy includes digital industrialization, industrial digitization, data elementization, and digital governance. Li Lei, Deputy Director of the Institute of International Economics at Nankai University, explains that industrial digitization can be understood as the digital transformation of traditional industries. Traditional industries apply digital industrialization technologies to improve production efficiency and further reduce costs. This requires tailored transformations based on industry characteristics to enhance productivity in traditional sectors, avoiding a "one-size-fits-all" approach.