China Entertainment: Infinite content, finite attention in the age of AI

The entertainment industry is now entering a new era – content supply is becoming almost infinite, generation cost and turnaround have significantly reduced, and audiences are getting more used to AI generated content as quality improves. In contrast, users' attention is still finite in the age of AI. Hence, we believe this could have a fundamental impact on the China Media and Entertainment industry, and likely shift the industry value chain and profit pool over the next few years. Content production and editing themselves could become more competitive and commoditized with the help of AI, while long-lasting IP franchises and creative idea generation could become more valuable vs. long-tail content. Content distribution platforms (such as short/mid form video) will benefit from the amplified content supply but also need to balance between real human vibes and the influx of AIGC content. With average production cost/time savings of 80%-90%+, we would expect more new formats such as int