I opt out of gen AI + Will gen AI ever be profitable?
Super Mario $1 billion, social media leads to suicide?
The Agenda:
Opinion
ANNOUNCEMENT: I opt out of generative AI. [AI, IP]
Will generative AI ever be profitable? [AI]
How to actually invest in gen AI. [AI, IP]
AI makes coding jobs irrelevant? [AI]
Gen AI hype - let’s hear from both Elon and the critics. [AI]
Super Mario makes a super $1 billion. [IP, Japan]
Street Fighter: The Movie (again?). [IP, Japan]
Mega Man: The Movie? [IP, Japan]
Japan’s new economic spearhead: gaming, anime, manga? [IP, Japan]
Saudi Arabia’s new economic spearhead: gaming, anime, manga? [IP, Saudi Arabia, Japan]
South Korean IP: Netflix spends a super $2.5 billion. [IP, South Korea]
Social media’s harmful content, France regulates? [Tech Regulation]
Want a job? Consider cybersecurity. [Tech]
Apple wins against Fortnite. [Tech]
Twitter: Pay per article? [Tech, Media]
Coachella globalizes music. [Music]
The recession-proof beauty industry. [Fashion/Luxury]
Coinbase sues SEC. [Crypto]
Manga
Business Samurai #78: “Peaceful Maintainers of Peace” [Coffee Distribution Arc #30]
Monday Motivation
Shock people, in a good way! (Satoru Iwata, the late former CEO/president, Nintendo)
I wish everyone in business was your friend, but we all know that’s not true. If it’s not straight-up competition, it’s psychological warfare. Don’t worry, at least we’re all friends here in Cross Platform, right?
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Opinion
AI
ANNOUNCEMENT: I opt out of generative AI. [AI]
Just to be clear, I would like to publicly state that I opt out of generative AI. That means that all of my work, all of my intellectual property - everything I write for Cross Platform, all of my fine art, and, of course, everything I create for Business Samurai - including but not limited to my manga art style, my plot, my beloved characters - and everything else I have ever created and uploaded to the Internet, is not authorized be me, the creator, to be used in any of the data sets used by any generative AI product.
A recurring theme of Cross Platform is that everyone should determine how they (and their children) can premiumize themselves, their business, and their work. Which is why I focus so much on companies, industries, and even countries - like Nintendo, the luxury industry, South Korea - who are financially successful in premiumizing themselves, to provide value to you, the reader.
Following this North Star, we all become figurative luxury companies. This comes with the same challenges that luxury companies face. In the example above, plagiarism via illegal use of intellectual property as an input into generative AI tools, is, in my view, a digital version of what luxury companies face in the physical world: counterfeiting. Like I said last week about Nintendo, you have to be protective of your brand.
[Premiumization. Artisanship at scale.]
Will generative AI ever be profitable? [AI]
Turns out the creators of all that Internet content that form the data sets of these generative AI products want to get paid for their work. Who would’ve thought? Big players who want to get paid include Reddit, Twitter, and the News Media Alliance, and of course, there are the lawsuits. There may be impending regulation, as seen in the European Union. Interestingly, OpenAI, owner of DALL-E 2 and ChatGPT, has recently not made the data on which it trains its products available to the public, even as competitors are doing so. Hmmmm…
Meanwhile, these first-to-market gen AI companies now have to deal with 1) open-source competitors, and 2) the rise of “ethical” gen AI. I’ve already talked about Databricks, Adobe, and Nvidia, and it appears there are more coming to market.
The analogy of “platform + content” is instructive here. These gen AI tools are effectively platforms that take existing content and generate “synthetic media” (see below) out of it. On the supply side of content, first-to-market gen AI players are facing licensing fees and lawsuits. On the demand side for synthetic media, they are facing open-source and/or “ethical” competition. Let’s not forget that currently, running gen AI is quite costly. All other things equal, it appears they could be squeezed.
What could happen next?
One scenario is a potential race to the bottom, with survivors being near- to medium-term loss leaders as part of a larger corporation. Or maybe the sector could rationalize and achieve sustainable margins, with the most successful players providing the best value for money, so I continue to wonder if the quality of data set would be a key differentiator in the future.
[UGC is difficult.]
How to actually invest in gen AI. [AI, IP]
Given my writeups above, how could one invest in gen AI and make money? Perhaps one way is to invest in the supplier of content to gen AI. Getty Image’s stock recently spiked on news that Trillium Capital made an approx. USD 4B offer to buy the company. As some have noted, there was an “ethical” AI dimension to this offer, given Getty’s recent partnership with “ethical” gen AI firm Bria and banning of some AI-generated content. Getty rejected the offer.
Anyway, just something to think about.
[The importance of IP in the digital economy.]
AI makes coding jobs irrelevant? [AI]
From Insider, a good article about how gen AI could affect coding jobs, with positive and negative scenarios regarding the demand for human programmers.
The article does advise programmers to focus on what AI can’t do. So, focus on premiumizing yourself.
[Premiumization.]
Gen AI hype - let’s hear from both Elon and the critics. [AI]
Perfect timing. Last week, Adam Conover had a talk with two representatives of what I consider the “anti-AI hype” camp, Emily Bender (who used a term I find useful, “synthetic media”) and Timnit Gebru, while Bill Maher had a talk with a rep of what I consider the “pro-AI hype” camp, Elon Musk. I recommend you watch both videos to get the story from both sides. But I did want to highlight that both camps did touch upon the subject of AI as a means for humans to achieve longevity and/or effective immortality.
IP
Super Mario makes a super $1 billion. [IP, Japan]
Yup, it’s official, it’s crossed the USD 1B mark and is currently the 10th largest animated movie globally. Also broke records in Japan, including largest opening weekend for an animated studio movie. Let’s see how it continues to perform.
Last week, I talked extensively about Super Mario and Nintendo, a company that has deeply influenced me as both a creative and businessman. Some new comments from Miyamoto-sensei: 1) the negative critic reviews contributed to the movie’s notoriety and buzz, and 2) the movie has “humanized” Mario the character, who, previously, was “puppet-like” in the games. This second comment, in my view, signals the transformation of the Super Mario IP as it expands from the gaming medium to the scripted content (film, TV, etc.) medium.
[The importance of IP in the digital economy.]
Street Fighter: The Movie (again?). [IP, Japan]
A Street Fighter movie has found its directors, just as Street Fighter 6 is about to launch. Don’t know yet if it’s going to be live-action or animated. BTW I preferred the Jean-Claude Van Damme/Kylie Minogue movie to the Kristen Kreuk one.
Mega Man: The Movie? [IP, Japan]
Screen Rant brought up the fact that Disney owns the film rights to Mega Man, via its acquisition of 20th Century Fox. If Disney makes a movie out of the IP (another IP I grew up with BTW), could it be a serious competitor to Mario?
Japan’s new economic spearhead: gaming, anime, manga? [IP, Japan]
Given manga’s surging popularity in Japan and abroad, the Japan business federation, Keidanren, has issued a proposal to the Japanese government to focus on the “contents industry… as key exports.” The proposed goal is to quadruple overseas sales of Japanese content, currently at about JPY 5T, within ten years.
Can art be a significant driver to the economy of an entire nation? Well, BTS alone contributed significantly to South Korea’s GDP, so…
[The importance of IP in the digital economy.]
Saudi Arabia’s new economic spearhead: gaming, anime, manga? [IP, Saudi Arabia, Japan]
As many of you know, Saudi Arabia has strangely been investing in everything I cover in Cross Platform, from gaming to Hollywood to anime and manga. NYU biz prof Scott Galloway recently published a piece that gives some context as to why, namely, Saudi Arabia’s pivot away from an oil economy. Although the article doesn’t mention Saudi Arabia’s culture investments directly, I highly recommend you read it, and I wonder if these investments are a spearhead for the country’s economy, like what is being proposed in Japan above.
[The importance of IP in the digital economy.]
South Korean IP: Netflix spends a super $2.5 billion. [IP, South Korea, Streaming]
Meanwhile, even as Super Mario earns USD 1B in 2023 so far, Netflix will spend USD 2.5B on South Korean films and TV series over the next four years.
Tech Regulation
Social media’s harmful content, France regulates? [Tech Regulation]
Bloomberg released a documentary about TikTok’s algorithm sending kids suicide content. This is in light of the looming youth mental health crisis worldwide - as discussed, correlation doesn’t necessarily mean causation, but these trends are a concern. Importantly, researchers are requesting social media companies to let the researchers study their algorithms, which these companies are currently not providing. Worth noting too, about a month ago the lower chamber of France’s National Assembly passed a bill that regulates influencers - one requirement would be for influencers to disclose if they are using a filter or have been photoshopped.
Tech
Want a job? Consider cybersecurity. [Tech]
Bloomberg Technology has a whole episode about it. Even the NSA is hiring!
Apple wins against Fortnite. [Tech]
A US federal appeals court upheld the 2021 ruling that largely favors Apple vs. Epic Games regarding the app store dispute. The only thing that’s been in Epic Games’ favor since then has been Apple potentially being required to allow apps to direct users out of its app store for payment - though analysts have speculated that such a situation wouldn’t significantly affect Apple’s bottom line.
Twitter: Pay per article? [Tech, Media]
Saw this on my Twitter feed the other day, thought it was interesting:
Music
Coachella globalizes music. [Music]
Apparently, 65% of viewers of the recent Coachella were outside the US.
[Cultural globalization.]
Fashion/Luxury
The recession-proof beauty industry. [Fashion/Luxury]
Crypto
Coinbase sues SEC. [Crypto]
Certainly an interesting turn of events.
Manga
Business Samurai: Business Strategy Manga
Latest episode of webcomic about businesses selling to consumers. Cross Platform’s own IP and multimedia franchise. You can read the complete story so far here.
The plot: The MASTER (マスター) corporation has hired a team of young and talented businesspeople from diverse backgrounds to guide its business strategy as it enters new industries. But is everything is as it seems? Hijinks and drama ensue as team CLARITY (明快さ) launches new businesses, while each member tries to make her and his way in the world!
The current story arc: Claurette, Lixue, Jiae, and Ryota are working to distribute Cafe Honesty's cold brew based on coffee beans... digested by a house cat. But now they've bumped up against competition with the Toriyaki company!
Episode #78: “Peaceful Maintainer of Peace” [Coffee Distribution Arc #30]
Monday Motivation
Shock people, in a good way! (Satoru Iwata, the late former CEO/president, Nintendo)
The late, great Satoru Iwata oversaw Nintendo’s successes in recent years, in part by successfully executing blue ocean strategy multiple times. Iwata wrote the following in one of his essays:
“We made it absolutely clear that our mission was to “shock people, in a good way.” Unless you can shock people, you’ll never gain new customers.”
And then discussed the Nintendo DS, the second-highest selling game console of all time, as a sample case study.
According to former insiders Kit and Krysta, it was Iwata’s roadmap that Nintendo followed which led to the Super Mario movie, and credit goes to the leadership of both Iwata and former Nintendo of America chief, Reggie Fils-Aimé. It’s sad that Iwata didn’t live to see the results of his efforts, a record-breaking USD 1B+ movie, the success of which could be considered shocking given its “notorious” reputation (see above).
I highly, highly recommend you read Iwata’s collected essays, it is a treasure trove of wisdom, not just in business, but also in human relations.
Rest in peace, Iwata-sensei. You have been such an inspiration to me, and hopefully to the readers of Cross Platform.
GO FOR IT! REACH YOUR GOAL!