December 19, 2018//-The convergence of digital technologies and the creative economy is having a disruptive effect on society in ways that would have seemed hypothetical.
We are witnessing the emergence of a Fourth Industrial Revolution, where technology is more accessible, more widely used and more seamlessly integrated than ever.
The impact of artificial intelligence, augmented and virtual reality, and blockchain for creative activities is spilling over into domains such as politics, individual behaviour and law. These fields have always contextualized creative activities, but are less often shaped by them directly.
It speaks to the nature of change that the effect is being felt so strongly in both directions. The findings in this paper represent the outcomes of a research project that examined the impact of these technologies on the creative economy.
The project has considered how production, distribution and consumption of creative content might change, as well as the impact this could have on society. There are different ways of conceptualizing the creative economy.
Many participants have a stake in it: creative job-holders, industries that monetize creative activity and governments that design policy to encourage creativity and economic growth.
For the purposes of this paper, the creative economy is defined as the portion of the economy containing jobs that rely on knowledge-based and non-repetitive skills as their key attributes. This encompasses creative endeavours such as music, film and television, gaming, advertising, publishing and literature, as well as architecture, design, arts and fashion.
While this paper is not exhaustive in its coverage of these activities, it has tried to be illustrative, and has outlined how certain advancements of the technologies could be applied more broadly to the creative economy.
Change, positive and negative, is occurring at an exciting and dizzying pace. Development is mostly driven by large companies, predominantly in the United States and China.
There are, however, small and dynamic start-ups globally that are generating interesting opportunities for creators and creatives alike. Rapid development makes future-oriented thinking more important, yet harder to accomplish.
The race to innovate and serve users with engaging content sometimes takes precedence over considerations of how the creative economy could flourish or affect individuals.
The creative economy and the platform economy are converging, redefining the relationship between creators, publishers and technology companies, and introducing difficult governance issues.
Publishers can use technology to expand audiences, but technology platforms – companies that match businesses with customers – also have a large impact on the way content is discovered.
A few providers are responsible for the majority of referral traffic, and just five companies take in almost 80% of global mobile advertising revenue.
This is redefining the relationship between publishers and platforms. As platforms become more involved in editorial decisions (influencing and deciding what type of content is seen and why), publishers’ accountability moves towards technology platforms.
Frameworks for governing this new dynamic are not yet sufficiently developed. Blockchain is the least advanced of all the technologies – while it holds promise for the creative economy, it requires further development.
Blockchain is exciting many creators because of its potential to change the control artists have over their work, in particular remuneration, production rights, third-party monetization and data transfer of creative work.
However, not enough use-cases exist to be confident in the ability of the technology to promote positive change. In addition, the costs of developing these use-cases, in terms of resources and inertia, may be too high to be feasible for creative applications.
Artificial intelligence (AI) is changing value chains for creative content from start to finish, which is having positive and negative impacts on society.
AI helps creators more effectively match content with audiences by learning and classifying users’ preferences, thus enabling providers to recommend specifically tailored content.
AI is being used to create content in creative industries, including music, art, fashion and film. It can likewise aid production by performing tasks that are too difficult or time-consuming for humans.
These positive advances are disrupting value chains across the creative economy, but they also have negative impacts. For example, disinformation and misinformation on social media are exacerbated by algorithms that encourage viral sharing. As a result, the appropriate level of responsibility of AI developers is being debated.
Augmented and virtual reality (AR/VR) can transform storytelling and the way content is experienced, but business incentives to do so may not fully align with individual well-being. AR and VR – immersive technologies – can dramatically alter the experience of content consumption.
They have the capacity to promote new and meaningful feelings, skills and understanding, which can make content more powerful than when presented through traditional media.
As the cost of immersive technology decreases, creators are enabled to redefine storytelling and narrative content in an entirely new medium. In the current environment, consumers are spending an increasing amount of their leisure time using screen-based devices.
Given that immersive technology has the potential to be more engaging and capture more intimate personal data from users, there are risks that the business incentives of developing immersive media may run counter to practices that protect individual well-being.
Multistakeholder collaboration is required for change to be effective. There are reasons to be excited by the adoption of emerging technologies in the creative economy, but also some negative implications that are worth considering.
Initiatives exist that try to mitigate harmful outcomes, but addressing them in isolation may leave important voices out of the conversation.
The World Economic Forum is providing a platform for the public and private sectors, as well as academics and civil society, to come together and address the issues holistically.
In many cases the Forum’s Center for the Fourth Industrial Revolution is at the forefront of the discussions. At the same time, there is always room for more informed debate, and recommendations of where attention could be concentrated have been provided for each technology.
Report findings
Artificial intelligence is changing value chains for creative content
Exciting developments using AI have been seen throughout the creative economy, and are described below.
Many take advantage of progress in machine learning to analyse huge datasets to learn specific behaviours, thereby allowing computers to recognize patterns and “learn” new actions without being explicitly programmed.
AI is helping creators more effectively match content with audiences. Algorithms based on neural networks learn and classify a user’s preferences – from movies streamed on Netflix, music listened to on Spotify or products purchased on Amazon. Providers can then recommend content tailored to a specific user. AI aids production itself by performing tasks that are too difficult for humans.
In advertising, it is used to contextualize social media conversations to understand how consumers feel about products, and to detect fraudulent ad impressions. Services such as Amper or Jukedeck compose music with AI, enabling small-scale creators to use high-quality music for their podcasts, videos and games at low cost.
Automated mastering software such as Landr provides near-studioquality processing and rendering for between $50 and $300 per year. In particular, AI that generates text is widespread in journalism and is used by publishers to expand the range of offerings.
The Associated Press has used AI to free up around 20% of reporters’ time while increasing output tenfold.The Washington Post developed its own tool, Heliograf, to cover sports and political news.
In its first year it generated about 70 articles a month, mostly stories it would not have dedicated staff to. More disruptively, machine learning has begun to create original content.
The implications have been felt across multiple industries. In music, AI has produced instrumental sounds that humans have never heard before.6 The same team taught a neural network to draw sketches of animals and objects and generate sophisticated images from photography.
In fashion, researchers have generated new designs. And in film, scripts have been written, complete with stage instructions, for a science fiction movie.
Other technologies have the potential to disrupt the value chain, though it will take time for the implications to fully emerge.
Notably, augmented and virtual reality offers an entirely new medium for creators to work with. Because this technology has the potential to become the “envelope” for all content, it is likely to redefine narrative conventions that have existed for decades.
Other benefits are detailed below.
At the monetization phase, blockchain has the potential to change the level of control artists have over their work.
As outlined below, the technology could allow artists to programme their intellectual property rights, revenues and royalties into smart contracts that quickly and transparently allocate revenue to contributors.
By removing the intermediaries between artist and consumer, blockchain may solve data and money issues in creative content – knowing precisely how much to pay artists based on actual consumption and eliminating complexity in paying them.
The technology could also affect production rights, third-party monetization and data transfer of creative work, enabling the repurposing of creative content while safeguarding the intellectual property of artists.
Immersive technology is transforming creative experiences
Content at the point of consumption is being dramatically altered by immersive technology. According to one poll, 46% of audiences associate virtual reality with novelty experiences and 60% with high-end gaming, but artificial and virtual reality have the capacity to provide truly transformative experiences by promoting new and meaningful feelings, skills and understanding.
Immersive media could transform content as wide-ranging as humanitarian stories and workplace diversity training by providing users with situational perspectives that can help avoid stereotypes and false narratives.
Other studies have detailed how experiences of content changes when participants use different immersive devices. The right combination of story and device could make content more effective than if presented through traditional media.
Many high-end immersive devices currently require high-spec stationary computers to power them, at a cost of several thousand dollars. With predictions of VR headsets declining in price by about 15% each year15 and becoming untethered to PCs, it is conceivable that immersive technologies will become progressively more available to mass-market consumers.
According to one VR film-maker, this could herald a new way of remembering, not just creating. “Think of everything you forget about a birthday party when you’re a kid.
[With widespread VR content capture], the rig would capture everything … It is going to be interesting to see what happens when we aren’t able to forget anything any more.”
However, this promise may be challenged if our dependence on mobile technology is replicated with AR and VR. Evidence from the past decade shows that while our overall leisure time is increasing, we are spending more of it using screen-based devices.
Smartphone users interact with their devices an average of 85 times a day; 46% report they could not live without them. Potential overuse leads to other concerns, outlined below, and might also affect the creative economy.
Studies have shown how off-screen performance is interrupted by digital devices, and, recently, research found that just the presence of a smartphone can reduce cognitive capacity.
Immersive devices, which could be at least as engaging as smartphones, may end up being inhibiting. The extent of the problem is starting to be acknowledged by social media companies.
Facebook has highlighted research showing how social media can affect well-being, and suggests that changing user habits may help limit negative impacts.
The creative economy and the platform economy are converging
While these technologies have varying potential to change how content is produced and consumed, they are being applied in a dynamic environment.
Publishers have used technology to find bigger audiences for their content, but have less direct control over how that content is discovered.
Instead, technology platforms are the main referral sources for digital publishers, with Facebook and Google responsible for about 70% of online referral traffic.22 This relationship is affecting the editorial (what type of content is seen and why) and monetary (where the revenue accrues) elements of information and entertainment content.
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