The AI pivot

March 16th, 2023

Together with

Tarantino’s swan song. According to THR, the king of non-linear storytelling is set to direct his final film, The Movie Critic, this upcoming fall. And as you can imagine, the news is melting our feeds. While it’s great to see Quentin step away from the camera on his own terms, the possible curtain call does leave a tiny cinematic hole in our hearts.

In other news… AI appeases Wall Street, T-Mobile buys Mint Mobile, and Sony gets a KO with Crunchyroll.

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MEDIA

AI raises the stock // Illustration by Kate Walker

Companies bet on Wall Street’s bet on AI

The Future. It seems like every tech and media company is jumping on the AI bandwagon to appease Wall Street. While some of the integrations are novel and show promise, others are a bit gimmicky or dangerously unready for primetime. Moving fast without due diligence to how it will affect the company, the industry at large, or customers can often lead to a lot of heartbreak and backtracking. AI may be the future… but it maybe shouldn’t be everyone’s future.

Media meets the momentCompanies are pivoting hard to AI.

  • Endeavor CEO Ari Emanuel used AI firm Speechify (which Endeavor has invested in) to generate the opening remarks of the company’s last earnings call.

  • CAA, through its Connect Ventures, was behind a recent fundraise into Deep Voodoo — a deepfake firm founded by South Park creators Matt Stone & Trey Parker. 

  • Spotify has unleashed its AI-powered “DJ” on listeners to help curate personalized radio shows.

  • Snap debuted a ChatGPT-powered chatbot called “My AI” for Snapchat+ users… which is already causing a lot of controversy over how it talks to teens.

  • BuzzFeed is using AI to write content and create personalized quizzes (yes, BuzzFeed quizzes are getting new life), which led to its stock price doubling.

Future financedAI may have a lot of kinks, but it’s the flavor of the month for Wall Street, with Morgan Stanley calling it a “$6 trillion opportunity” and Bank of America declaring that the tech is  “at a defining moment — like the internet in the ’90s.” So stock-price-obsessed companies feel they have no choice but to rush to integrate AI or get caught up in the narrative that they’re behind the times. 

But some in Wall Street seem wary of jumping headfirst into AI after realizing they were a little too blinded by past innovations like streaming, crypto, and the metaverse. Goldman Sachs analysts Eric Sheridan and Kash Rangan warned that it might be just another “hype” cycle.

BUSINESS

Minting money // Illustration by Kate Walker

Ryan Reynolds mints a billion on Mint Mobile sale

The Future. T-Mobile is acquiring the Ryan Reynolds-backed Mint Mobile for over a billion dollars and keeping Reynolds on as their pitchman. The deal is another example of how Reynolds has leveraged his celebrity, comedic chops, and business acumen to turn underdog brands into hot-ticket items. It may also cement that sticky, viral marketing may be the only way for startups to break out in today’s business climate.

Teed upIt looks like Ryan Reynolds’ marketing magic has worked again.

  • T-Mobile is buying Mint Mobile in a cash and stock deal valued at $1.35 billion.

  • T-Mobile will keep the Mint branding and add the company to its other prepaid offerings, like Metro and Connect (the company has 21.4 million prepaid subscribers overall).

  • Reynolds, a part-owner, will stay on in a “creative capacity,” according to WSJ, and will still appear in ads.

T-Mobile, now the second biggest wireless operator in the US, won’t necessarily gain any new customers in the deal since Mint Mobile already resells service using T-Mobile’s network.

Message receivedBut what T-Mobile does get in the deal is major marketing chutzpah, with CEO Mike Sievert saying that “over the long term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile.”

It’s no wonder that the deal is keeping Reynolds around. His Maximum Effort marketing banner has leaned on what the actor calls “fastvertising” to make every one of its produced ads go viral. That led to Maximum Effort getting acquired by MNTN in 2021 (where Reynolds is now chief creative officer) and his Aviation Gin selling to Diageo in 2020 for $610 million.

Talk about in demand.

TOGETHER WITH SHORTFORM

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Case in point: Shortform is a more practical way to learn the things you’ve always wanted to know. 

They might like us as much as we like them, because Shortform is offering our readers a free trial and a 25% discount (that’s $50 off or three months free!).

ENTERTAINMENT

Sony gets a KO with Crunchyroll

The Future. While many in the entertainment world thought Sony paid way too much for Crunchyroll in 2020 ($1.18 billion), it has turned out to be a steal. Now combined with Sony’s Funimation, Crunchyroll has become a moneymaker for the company, winning the love of both creators and audiences. Considering that anime fandom has become something of a lifestyle, Crunchyroll’s diverse offerings could put it at the center of the ecosystem worldwide.

Anime is here to stayCrunchyroll has what every streamer wishes it did.

  • A flywheel of offerings. It’s not just the biggest anime streamer in the world but is also the biggest theatrical distributor in North America. It also has a live-events division, a merch division, and upstart mobile gaming and music divisions. 

  • A tiered approach. Crunchyroll offers a free ad-supported version and three paid ones that range from $7.99 to $14.99, with the most expensive giving subscribers perks to all the flywheel offerings.

  • A passionate fanbase. With 300 million fans, anime has become one of the most popular art forms in the world. Crunchyroll only has 10 million paid subscribers (and is already turning a profit), so there’s a lot of room for growth.

  • Expanding reach. While Crunchyroll has its biggest following in the US and in the under-25 age group, popularity in every age cohort is growing, and the company will soon expand into the hot market of Southeast Asia.

While every major streamer is making moves to get into anime, Crunchyroll has some big advantages: its deals cover the whole flywheel of offerings, it shares revenue and data with creators, and Sony is a Japanese company, after all.

Everyone will have an anime division soon enough… but Crunchyroll is already ahead of the curve.AI appeases Wall Street, T-Mobile buys Mint Mobile, and Sony gets a KO with Crunchyroll.

IN PARTNERSHIP WITH THE GIST

A new way to win in sports

Sports news is a bit biased — only 5% of it covers female athletes. That’s why we’re fans of The GIST. They’re a women-led sports newsletter leveling the playing field by tackling sexism in sports like a true MVP.

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Today's email was brought to you by David Vendrell.Edited by Nick Comney. Publishing by Sara Kitnick.

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