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Articles by: "Rande Price, Research VP – DCN"

A confused robot to show how AI search has trouble with news citations and attribution
Research

AI search has a news citation problem

Artificial intelligence is transforming the way people search for and consume news. With nearly one in four Americans now using generative AI chatbots instead of traditional search engines, the way journalism reaches audiences is shifting dramatically. While AI-powered search promises speed and convenience, it presents serious challenges for news publishers, including loss of attribution (citations), declining referral traffic, and misinformation.

A new Tow Center for Digital Journalism study highlights these risks, revealing how AI-driven search tools often fail to credit, or to accurately credit, sources and bypass publisher controls, such as paywalls. As AI search rapidly evolves, media executives must understand its implications and develop strategies to protect journalism’s integrity and financial viability.

AI search engines struggle with accuracy and attribution

The Tow Center analysis studies eight AI-powered search tools: Perplexity, Google’s AI Overviews, Bing Chat, ChatGPT, Claude, Gemini, Meta AI, and Grok. The research concludes that over 60% of AI-generated responses contain incorrect or misleading information. Unlike traditional search engines that list multiple sources for verification, generative AI tools present single, authoritative-sounding answers—often with a false sense of confidence.

When AI search engines provide sources, they cite syndicated or republished versions rather than providing a citation for the original publisher. This practice diminishes the visibility of primary news organizations and deprives them of direct traffic. Even more troubling, some platforms, such as Grok and Gemini, regularly generate broken or fabricated URLs, misleading users and reducing referral traffic to legitimate news sites.

AI platforms ignore publisher controls

Beyond attribution issues, many AI search tools fail to respect industry norms designed to protect publishers’ content. The study finds that AI platforms routinely retrieve content from sites even when publishers explicitly block them using robots.txt, a standard tool for controlling web crawling. This disregard for publisher restrictions raises ethical concerns and undermines publishers’ ability to manage the use of their content.

The Tow Center analysis also identifies inconsistencies in using publishers’ content with licensing agreements. Some news organizations with formal partnerships with AI companies still experience misattribution or see their content surface in ways that do not drive traffic back to their platforms. These findings suggest that agreements alone are insufficient to ensure proper credit or compensation for news publishers.

Revenue and engagement threat

For media companies, the rise of AI search directly threatens digital traffic, audience engagement, and revenue generation. Traditional search engines drive referral traffic to news sites, supporting subscription models, advertising revenue, and brand visibility. If AI search tools continue to bypass proper citation and link attribution, they could significantly weaken publishers’ brand recognition, authority, and ability to monetize their content.

Additionally, AI-driven search changes user behavior by reducing the need to visit source websites. Instead of clicking through to read full articles, users increasingly rely on AI-generated summaries, limiting publishers’ opportunities to engage audiences directly. This shift challenges established business models and forces publishers to rethink how they distribute and monetize content in an AI-driven search environment.

Responding to AI search disruption

Despite these challenges, there are opportunities to influence how AI search evolves. Since AI search models rely on high-quality journalism to function effectively, publishers have the leverage to demand better attribution, transparency, and enforceable policies. This study suggests four key strategies for publishers:

  1. Advocate for stronger AI regulations: Industry groups and publishers can push for more transparent policies that require AI search engines to cite and link to sources properly.
  2. Negotiate licensing agreements: While existing agreements show inconsistencies, publishers can strengthen negotiations to ensure AI companies provide meaningful attribution and compensation.
  3. Develop AI-optimized content strategies: As publishers adapted to search engine optimization (SEO), they must now consider how AI models surface content and explore ways to maximize visibility.
  4. Educate readers on AI search limitations: Publishers can inform audiences about the risks of AI-generated misinformation and encourage direct engagement with trusted news sources.

The Tow Center study concludes that media companies must remain proactive and ensure that AI search platforms operate with fairness, transparency, and respect for original reporting. The long-term health of the news industry depends on ensuring that AI-driven discovery tools do not replace or undermine the very sources that power them. By pushing for industry-wide standards and holding AI companies accountable, publishers can work toward a digital ecosystem where AI search enhances, rather than diminishes, quality journalism.

human hands at a computer with lightening bolts to indicate Journalism and Journalists use of AI
Industry-Research | Innovation | Research

Journalists confront the reality of media use of AI

The rapid adoption of Generative AI (Gen AI) in newsrooms sparks important discussions among journalists and media professionals, especially about transparency and trust. Across the industry, publishers vary in how they communicate their AI strategies to their workforce. Reports suggest that some journalists seek more transparency around management’s AI implementation efforts and agreements with AI companies. This lack of clarity also applies to content, as some publishers explore AI-generated articles without consistently informing staff or readers.

A lack of transparency around AI fuels distrust

Mike Ananny and Jake Karr examine how news media unions are trying to manage and stabilize the use of Generative AI. Their analysis, How Media Unions Stabilize Technological Hype, draws from a review of industry reports, expert interviews, and case studies of newsrooms integrating generative AI. The methodology emphasizes qualitative insights to understand AI’s impact on editorial processes, ethics, and audience trust.

According to the authors’ analysis, many employees only learn about AI licensing deals through sudden announcements, often without prior consultation. Some must rely on external reporting to understand their company’s AI initiatives. Union representatives consistently face resistance when requesting information, reinforcing a broader mistrust of employer intentions.

However, solutions are emerging. Some unions are pushing for contractual guarantees to ensure greater transparency. The Associated Press and certain Gannett-owned publications propose contract language requiring 90 days’ notice before implementing new AI-related newsroom technology. Similarly, The Onion and Wirecutter unions successfully bargain for advance notice and transparency requirements regarding AI procurement. These efforts signal a path to restoring trust through openness and accountability.

Journalists defend creativity and quality

News professionals ensure accuracy, provide context, and uphold ethical standards that AI alone cannot fulfill. Ananny and Karr conclude that AI’s so-called “creativity” is a remix of existing human work, lacking the depth, insight, and contextual awareness that define quality journalism. No matter how advanced AI becomes, skilled journalists must verify facts, interpret events, and shape narratives with integrity.

Recognizing this, some media organizations are implementing safeguards. The Associated Press is committing to using Gen AI only with direct human oversight to maintain compliance with journalistic standards. Another example includes editorial employees reviewing AI content before publication at The Onion, The A.V. Club, Deadspin, and The Takeout. And the MinnPost treats AI-generated material as a source requiring human editing and fact-checking.

But beyond oversight, journalists are pushing for the right to decide whether or not to use AI. Many unions argue that workers, as experts in their field, should determine the appropriate role of AI in journalism. The CNET Media Workers Union demands the right to opt out of using AI if it fails to meet publishing standards. The Atlantic Union similarly insists that journalists may use AI within ethical guidelines, but no one should force them to do so.

These demands reflect a broader principle: journalism is, at its core, a human-driven endeavor. AI may assist but cannot replace the judgment, creativity, and accountability that define quality reporting. The analysis concludes that to integrate AI responsibly, newsrooms must prioritize transparency, trust, and human journalists’ role in safeguarding the profession’s integrity.

Beyond transparency and journalistic integrity, the rise of Gen AI raises significant ethical and legal questions. One of the most pressing concerns is intellectual property: Who owns the content produced by AI models trained on vast amounts of copyrighted material? Many publishers argue that AI-generated work lacks originality and merely regurgitates existing human-created content. This also raises potential plagiarism and copyright infringement issues. In response, some media companies are taking legal action.

Additionally, there is concern about AI’s ability to spread misinformation. Unlike human journalists, AI lacks the critical thinking skills to discern fact from fiction. Without rigorous oversight, AI-generated content can amplify biases, fabricate sources, and misinterpret data, posing a direct threat to public trust in news media.

Regulatory bodies are beginning to take notice. Governments worldwide are considering policies to ensure AI transparency and ethical implementation in journalism. For example, the European Union’s AI Act includes provisions requiring companies to disclose AI-generated content and implement safeguards against misinformation. The Federal Trade Commission warns companies against deceptive AI practices, signaling potential regulatory intervention in the media industry.

Balancing innovation and integrity for journalism and AI

Despite the challenges, AI’s presence in newsrooms is likely to grow. Some publishers are taking a proactive approach by developing AI policies that prioritize ethical considerations. Reuters, for example, offers internal guidelines to ensure journalists use AI tools responsibly and transparently. The BBC is similarly on board to maintain human oversight over AI-generated content and clearly labeling AI-assisted reporting.

Ultimately, the future of AI in journalism will depend on striking the right balance between technological innovation and journalistic integrity. The authors concur that if publishers prioritize transparency, enforce accountability, and uphold journalists’ fundamental role, AI can be a valuable tool rather than a disruptive force.

Advertising | Industry-Research | Research

News podcasts are wildly popular. But who’s listening?

Podcasts are transforming how Americans consume news, offering on-demand access to trusted voices and in-depth analysis. As traditional news formats evolve, podcasts have become a critical medium for audiences seeking timely, engaging, and diverse perspectives.

Second only to comedy, news podcasts are a dominant podcasting genre. A new report from Sounds Profitable, in partnership with Signal Hill Insights, finds that 31% of podcast listeners consumed news content in the past month. The findings underscore a significant shift in how Americans engage with news, moving away from traditional TV broadcasts and toward more personalized, on-demand listening experiences.

News podcast consumer demographics

The average age of a news podcast consumer is 47, closely mirroring the overall U.S. adult population. This starkly contrasts television news audiences, where the average age skews significantly older—70 for MSNBC, 69 for Fox News, and 67 for CNN. This demographic shift highlights how younger audiences gravitate toward podcasts as a preferred medium for staying informed. Balancing short-form daily news updates with longer-form analytical discussions allows podcast listeners to integrate news consumption seamlessly into their routines.

The social influence factor

One of the study’s more interesting findings is the role of social influence in driving news podcast discovery and engagement. News podcast listeners exhibit significantly higher levels of social sharing and recommendations compared to their non-news counterparts:

  • 73% receive podcast recommendations from friends and family, compared to 51% of non-news listeners.
  • 73% actively recommend podcasts to others, versus 49% of non-news listeners.
  • 83% say they are likely to listen to a podcast recommended by someone they know.

This word-of-mouth dynamic plays a crucial role in podcast adoption, highlighting the importance of personal connections in shaping media consumption habits. While platforms and algorithms contribute to discovery, personal recommendations remain the most powerful driver of engagement.

Additionally, news podcast listeners are more likely to consume content with others. Unlike other podcast genres that often cater to solo listening, news podcasts frequently become a shared experience. Group listening fosters discussions and deeper engagement with the content, whether in the car during a commute or as part of a morning routine. The study reveals that 88% of news podcast consumers who listen with others cite “listening while traveling” as a major benefit, compared to 66% of podcast listeners.

Advertising challenge and opportunity for news podcasts

Despite their high engagement levels, news podcast listeners are not immune to advertising fatigue. The study reveals that:

  • 21% have stopped listening to a podcast due to excessive ads.
  • 14% cite repetitive content as a reason for abandoning shows.

This finding challenges the assumption that strong host-listener relationships can completely counteract fatigue. Even among engaged audiences, there is a threshold for how much advertising they are willing to tolerate.

However, the research also uncovers a compelling opportunity for brands. News podcast listeners are more receptive to brand-sponsored content than the general podcast audience:

  • 61% say they are likely to listen to a brand-sponsored podcast.
  • 46% indicate that a company’s involvement makes them more likely to try a new podcast than 34% of non-news listeners.

Brands can forge meaningful connections with news podcast audiences by positioning themselves as content partners rather than just advertisers. By integrating seamlessly into the content, brands can enhance rather than disrupt the listener experience.

Podcasts and the future of news consumption

The traditional model of news consumption—gathering around the television at a fixed time—has largely faded. Instead, audiences curate their news experiences through digital and on-demand platforms. While social media and news websites play an important role in this transition, podcasts offer a unique advantage: deeper engagement and trust.

Unlike passive scrolling through headlines, listening to a news podcast requires intentional engagement. The hosts of these podcasts often become trusted voices, forming strong bonds with their audience. This level of trust is a significant draw, positioning news podcasts as a vital part of modern news consumption. However, the challenge lies in maintaining audience engagement without alienating listeners through excessive advertising.

The findings from this report offer a compelling look at the evolving media landscape. News podcasts attract a younger and more engaged audience and reshape how people discover, consume, and share news. The influence of social recommendations and the potential for shared listening experiences emphasize the unique role of news podcasts in today’s information ecosystem. Additionally, the nuanced relationship between advertising and engagement further solidifies their distinct position.

Journalism support organizations
Industry-Research | Research

It may be time to reform journalism support organizations

Journalism support organizations face scrutiny regarding efficiency, strategic direction, and overall impact. Critics argue that these organizations function as bureaucratic intermediaries, consuming philanthropic resources without adequately addressing the needs of local news outlets. At the same time, many journalists and news organizations find these support structures essential to their survival, particularly as they navigate an increasingly complex media landscape. This tension raises an important question: How can support organizations evolve to better serve the local news ecosystem?

A recent report, “The Critical Role Support Organizations Can Play in Maturing the Local News Field,” commissioned by the Democracy Fund explores this issue in depth. The report concludes that a broader “field-level agenda” is necessary to help define common goals, establish accountability metrics, and align efforts across the journalism ecosystem.

Field-level agenda for journalism support organizations

One of the report’s findings is the lack of a shared framework to measure success in the local news sector. Many support organizations operate with distinct, sometimes overlapping missions, making it difficult to assess their collective impact. The report proposes a “field-level agenda” as a solution—an overarching strategy that brings together diverse players to set priorities, establish success metrics, and enhance collaboration.

Support for this concept is widespread. Many industry leaders echoed the idea that a structured, collaborative framework is needed to ensure that support organizations advance the field. David Grant of Blue Engine Collaborative notes that the industry struggles to effectively define its audience and measure impact. Similarly, Mary Walter-Brown of News Revenue Hub emphasized that support organizations should be held accountable for how well they help news organizations grow.

Roles and responsibilities of the news support ecosystem

There is broad agreement on the need for better organization within the field. However, stakeholders are still grappling with who should lead this transformation. Many argue that philanthropic organizations should establish more explicit expectations for accountability and collaboration.

Damon Kiesow, Knight Chair in Journalism Innovation at the University of Missouri, suggests that funders could accelerate progress by requiring grantees to adhere to standardized impact metrics. Tristan Loper of the Lenfest Institute points to recent grantmaking initiatives emphasizing partnerships rather than competition as a potential model for fostering greater alignment within the sector.

Others question the long-term sustainability of specific support organizations. Instead, they propose that funders adopt a more strategic approach to determining which initiatives should last decades and which should be time-limited interventions. This perspective underscores the importance of developing a clear vision for the role of support organizations within the broader journalism landscape.

A collaborative approach to news media support

The report highlights that while no single experience defines all support organizations, there is a shared desire for greater collaboration. The report was given to participates for review and some leaders noted that the report’s initial tone seemed overly defensive. They felt it reinforced criticisms rather than highlighting these organizations’ indispensable work. However, this feedback reinforces the issue’s complexity. Support organizations must navigate a fine line between responding to critiques and advocating for their essential role in the ecosystem.

Stefanie Murray of the Center for Cooperative Media challenged the notion that support organizations lack accountability. She pointed out that many already adhere to rigorous funding requirements. This debate underscores the need for a nuanced discussion about defining and measuring success in ways that reflect the realities of different organizations.

Next steps for journalism support organizations

While this report provides valuable insights, it raises questions that merit further exploration. For instance, how can the support field evolve, and what lessons can we learn from other industries? What balance should exist between funding direct journalism (news organizations) and intermediary organizations providing infrastructure and support?

Several leaders who participated in the report have proposed expanding the taxonomy of support organizations to include groups that act as bridges between journalists and community organizations. Others call for a similar taxonomy for newsmakers and funders, which could help clarify how different entities fit within the broader ecosystem.

The challenges facing journalism support organizations are complex. However, the Democracy Fund’s research states the need for reform is clear. Establishing a field-level agenda could bring greater coherence, accountability, and impact to the sector. However, achieving this vision will require sustained collaboration among all stakeholders, support organizations, funders, and local news leaders.

As the industry evolves, support organizations must adapt to ensure they remain valuable partners to local newsrooms. By embracing a more strategic, data-driven approach to measuring success and fostering collaboration, the field can move toward a more sustainable and effective future for local journalism.

Industry-Research | Research

AI assistants error prone when it comes to news

Artificial intelligence is rapidly transforming the way people access and consume news. With AI assistants increasingly serving as intermediaries between audiences and trusted news sources, it is essential to understand how accurately and reliably they present information. Unfortunately, according to recent research from the BBC, AI does not accurately deliver news.

In new research, the BBC is evaluating how well leading AI assistants—ChatGPT, Microsoft’s Copilot, Google’s Gemini, and Perplexity—deliver news-related answers. By granting these AI models access to its website, the BBC sought to assess its ability to effectively reference and represent its journalism.

This study examined the quality of AI-generated responses using 100 news-related questions, with BBC journalists evaluating them based on seven key criteria, including accuracy, attribution, and impartiality. The reviewers then determined whether the responses contain minor, significant, or no issues across these areas.

Significant errors in AI news

The results show that over half (51%) of AI-generated responses contain significant issues, while 91% exhibited some inaccuracy, bias, or misrepresentation. Specific issues include factual errors, misattribution of sources, and missing or misleading context. When evaluating how these AI assistants represented BBC content, the study finds that Gemini (34%), Copilot (27%), Perplexity (17%), and ChatGPT (15%) produce responses with errors in their use of BBC sources.

Accuracy and misinformation

AI-generated responses frequently report factual inaccuracies, even when citing BBC sources:

  • Gemini incorrectly states that the NHS discourages vaping as a smoking cessation method, despite BBC coverage explicitly confirming that the NHS supports vaping for smokers that want to quit.
  • Copilot misrepresents the case of rape survivor Gisèle Pelicot, falsely claiming that blackouts and memory loss led her to uncover the crimes against her.
  • Multiple assistants incorrectly report figures, such as significantly underestimating the number of UK prisoners released and misattributing Chrome’s market share statistics.
  • ChatGPT erroneously reports that Ismail Haniyeh, assassinated in July, is still an active Hamas leader.

Attribution and sourcing errors

AI assistants frequently misattribute or incorrectly source information. Some rely on older articles, leading to misleading conclusions. In several instances, assistants claim to summarize BBC reporting but include details that did not exist in the BBC articles.

Impartiality and editorialization

In addition to prevalent factual errors, AI assistants struggle with maintaining any semblance of journalistic impartiality. The study flags multiple instances where opinions are presented as facts, sometimes falsely attributing to the BBC as the source. For example, Perplexity characterized Iran’s actions in the Middle East conflict as “restrained” and described Israel’s response as “aggressive,” despite no such characterization appearing in the BBC article.

AI errors in news is a risk to public trust

These findings highlight serious risks in AI-generated news summaries. Misinformation can erode public trust in news media, whether due to factual errors, misleading context, or editorialized conclusions. Distortion of BBC’s content can have significant consequences. If these risks continue, audiences may question the credibility of BBC’s reporting.

AI assistants are set to play an increasing role in how people access news and because they do not generate meaningful traffic to media websites, it appears that the majority of people using them are not exploring further to determine the accuracy of the purported news AI delivers. This, it is critical that AI agents or chatbots endeavor to uphold the information ecosystem’s rigorous and trusted editorial standards.

Ultimately, AI developers are responsible for ensuring their products align with fundamental journalistic principles, including accuracy, impartiality, and reliable sourcing. The BBC warns that if these challenges go unaddressed, AI risks undermining the news organizations it depends on for credible information. As AI continues to evolve, the BBC emphasizes the need for the media industry to champion responsible AI integration to safeguard audiences and preserve journalism’s integrity.

Industry-Research

Dealmaking in the tech, media and telecom sectors set to accelerate

Dealmakers in the Technology, Media, and Telecommunications sectors (TMT) are entering 2025 with renewed optimism. This sector’s pivotal role in the AI boom drives investment opportunities, according to recent PwC research. Easing macroeconomic and geopolitical challenges, particularly in the U.S., has also set the stage for a favorable mergers and acquisitions (M&A) environment.

Media M&A market dynamics

PwC’s Global M&A Industry Trends Report notes that the U.S. administration’s focus on deregulation is poised to support megadeals (transactions exceeding $5 billion) and boost executive confidence. Anticipated interest rate cuts by central banks should foster a more vibrant M&A landscape.

According to PwC’s 28th Annual Global CEO Survey, 76% of TMT executives who made acquisitions in the past three years plan to pursue further deals within the next three years. This signals a strong strategic focus on media M&A for growth and innovation.

The evolving TMT landscape presents significant implications and opportunities for the media sector. These include:

1. AI as a growth driver

AI investments transform media content production, distribution, and audience engagement strategies. Premium media companies must harness AI to streamline workflows, deliver personalized content, and improve advertising efficiency.

2. Surge in media M&A activity

Media companies will likely pursue strategic acquisitions with regulatory and economic conditions becoming more favorable. Smart partnerships or mergers with technology firms can enhance digital capabilities and foster AI-driven innovations.

3. Capital spending

Extending capital investment in energy and real estate opens new avenues for media companies. Given these market dynamics, collaboration involving data centers or energy-efficient content delivery networks could become significant.

A more relaxed regulatory environment may facilitate the way for innovative cross-platform deals and media-tech partnerships. For some, this will unlock new revenue streams.

5. Evolving content and platform strategies

The shift in media consumption—toward digital-first platforms, podcasts, and creator-generated content—requires media companies to reassess their content strategies. Multi-platform distribution and niche content offerings will be critical to staying competitive.

6. Investor confidence spurs media M&A

Reduced macroeconomic pressures and lower interest rates will likely attract private equity investments. This will fuel innovation and expansion for forward-thinking media companies.

AI: a catalyst for investment

AI remains a focal point for investment, particularly in the U.S. In January 2025, a landmark $500 billion joint venture between OpenAI, Oracle, and SoftBank to develop a network of AI data centers. This venture should reinforce the U.S.’s position as a global AI hub.

Companies channeling capital into high-growth areas such as data analytics, automation, and generative AI enhance products to drive future growth. Notable deals in 2024, including Cisco’s $28 billion acquisition of Splunk and HPE’s $14 billion acquisition of Juniper Networks, exemplify this trend.

Regulatory and geopolitical shifts

The new administration is undergoing significant changes in the U.S. regulatory landscape. Appointments to the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) should foster a more deregulated environment, easing barriers to media M&A. These changes may have global implications, influencing deal activity in other regions.

After a prolonged period of high interest rates, central banks expect to implement gradual rate cuts in 2025. Lower borrowing costs will likely invigorate financial sponsors, reversing the trend toward corporate-led deals and a resurgence in private equity investment.

Media industry evolution

As the media landscape transforms, digital-first platforms necessitate strategic portfolio assessments. As companies adapt, transformative M&A, including divestitures of non-core assets, is likely. Vivendi’s recent restructuring and Comcast’s strategic moves exemplify this trend.

The Technology, Media, and Telecommunications sectors (TMT)sector is ready for a resurgence in M&A activity in 2025. The convergence of AI-driven innovation, regulatory shifts, and capital market dynamics creates fertile ground for strategic acquisitions. Those media businesses that are agile and responsive will seize new opportunities and navigate well in this dynamic landscape.

DCN-Research | Research

DCN Digital Media Subscription Tracking Report: insights into a dynamic market

The subscription media landscape continues to evolve, reshaping how consumers engage with digital content and how businesses strategize to maintain their market share. As digital media matures and price sensitivity increases, the market has responded with innovative pricing models and premium offerings.

The DCN Digital Media Subscription Tracking Report provides insights into these changes, offering year-over-year trends and brand-specific data exclusive to DCN members. Here are key highlights from the latest report:

  • Subscriptions Decline, Spending Rises: While the average household subscription count fell by 4% in Q4 2024, annual spending on digital subscriptions grew 7%, indicating a shift toward prioritizing high-value services.
  • Bundling Gains Popularity: 59% of SVOD subscribers opted for bundles in Q4 2024, up from 52% earlier in the year, as consumers seek value-driven solutions.
  • Ad-Supported Tiers Surge: Consumers increasingly choose ad-supported streaming services to cut costs. SVOD with ads saw a 14% increase, while no-ad services declined by 12%.
  • Top Performers in SVOD: Amazon Prime Video with ads quickly ascended to the top spot among users. Hulu with ads rose to third, Peacock with ads rose to fourth, while Disney+ Premium with no ads dropped to fifth place.

As the media subscription landscape continues to evolve, innovation in bundling and tiered options remains crucial. These findings underscore the resilience of premium digital content and the importance of staying attuned to evolving consumer needs.

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Advertising | Industry-Research

How a TikTok ban could reshape ad spending

Social media and digital advertising dynamics are once again at a critical juncture. On January 19th, TikTok resumed service in the United States after a brief disruption, much to the relief of its 115 million U.S. users. President Donald Trump’s executive order to delay banning the app for 75 days allows TikTok to seek a U.S. partner to address security concerns. However, TikTok’s future uncertainty is shaking up the digital ecosystem as major platforms and advertisers prepare for potential disruptions.

Sensor Tower’s latest data paints a vivid picture of TikTok’s role in the U.S. media and advertising market. The platform drives 88 million daily hours of consumer engagement, generates approximately $2 billion in annual consumer spending, and commands an 8% share of the digital advertising market. Should TikTok face another ban, competitors like Meta and Alphabet, alternatives like Snapchat, and emerging platforms are all poised to capitalize.

Consumer engagement: the TikTok effect

TikTok’s popularity has reshaped how users consume short-form videos. However, its dominance in engagement reveals a troubling trend. Overall time spent on short-form video apps dropped by 4% year-over-year in 2024, with TikTok’s U.S. engagement declining by 12% in Q4.

Despite this decline, TikTok’s success has forced competitors to innovate aggressively. Platforms like Instagram, Facebook, and YouTube ramp up their short-form video offerings with features such as Reels and Shorts. In Q4 2024, users spent 54 million hours daily on YouTube Shorts, 28 million on Instagram Reels, and 26 million on Facebook Reels. Notably, Facebook Reels experienced the most robust growth, with engagement rising 87% year-over-year. Instagram (+18%) and YouTube (+7%) would follow.

Snapchat, too, is stepping up its game. The rollout of its “Simple Snapchat” interface aims to streamline access to Spotlight, its short-form video feature. This move positions the platform to attract a larger share of TikTok’s audience in the event of a ban.

Advertising dollars at stake

In 2024, Tiktok platform held an 8% share of U.S. digital ad spend, with Walmart, Google, and Amazon ranking among its top advertisers. If TikTok exits the U.S. market, Sensor Tower projects that platforms like Meta and YouTube will inherit significant portions of its ad revenue. Specifically, Meta is expected to gain four percentagepoints of TikTok’s ad spend share, split between Instagram (three percentage points) and Facebook (one percentagepoint). YouTube and Snapchat are likely to gain two percentage points.

This shift would reinforce Facebook’s position as the U.S. social media ad spend leader and enable it to command a 35% share by Q4 2025, followed by Instagram (30%) and YouTube (19%). Meanwhile, Snapchat’s share could rise to 6%, with smaller platforms like Pinterest and Reddit collectively accounting for less than 5%.

In-app purchases offer lucrative opportunities

TikTok’s innovative monetization strategies have set a high bar for competitors. Since its launch, U.S. users spend over $4 billion on TikTok Coins, an in-app currency for tipping creators and promoting videos. In 2024, TikTok’s $1.7 billion in U.S. in-app revenue outpaces Instagram, Facebook, YouTube, and Snapchat combined.

If TikTok exits the U.S. market, its competitors will inherit a significant portion of this revenue stream. Sensor Tower predicts that Instagram’s in-app revenue could surge by 790% year-over-year in Q4 2025, more than double the growth rate of its peers. YouTube, however, would maintain its leadership, with projected in-app revenue of $442 million in Q4 2025, roughly double that of Instagram and Facebook.

Lessons from India’s TikTok ban

India’s 2020 TikTok ban provides valuable insights into what might happen in the US. Before its ban, TikTok was India’s largest short-form video platform, boasting 169 million monthly active users and a significant share of app engagement. After the ban, platforms like Instagram and YouTube surged in downloads and engagement, while local players such as Moj and Josh quickly gained traction.

Sensor Tower estimates that Instagram and YouTube could see similar growth in the US, with their engagement hours rising by 40% and 12% year-over-year, respectively, in Q4 2025. Snapchat growth may lead the pack with an 89% increase in daily engagement hours, driven by its Spotlight feature and streamlined interface.

Challenges and opportunities

The media industry, particularly those in the social and short form video space, cannot ignore TikTok’s vast influence on consumer behavior, advertising, and monetization. Competitors are already responding by enhancing short-form video features and exploring new monetization strategies. Platforms that successfully replicate TikTok’s creator-driven ecosystem—complete with seamless in-app payment systems for tipping and promotions—will likely capture the lion’s share of user engagement and revenue.

With billions of dollars in ad spend and consumer engagement at stake, media companies and advertisers will closely monitor how this story unfolds. Whether TikTok stays in the U.S. market or not, its success—and potential absence—continues to shape the future of social media and digital advertising.

Industry-Research

How AI is reshaping the entertainment industry

Today’s headlines about artificial intelligence (AI) describe it as a transformative force reshaping entertainment and technology. Companies across the spectrum are adopting AI to streamline operations, enhance content production, marketing, and distribution efficiencies, and revolutionize the viewer experience. But are consumers keeping pace with this rapid evolution and what do they think about it?

Popular AI tools like OpenAI’s GPT-4 and DALL-E generate images, music, scripts, games, and even fully realized ads and video content. These advancements blur the lines between “real” and “fake” content. Post-production AI tools can now enhance not just backgrounds and environments but also character identities and storylines. AI algorithms also help to better match viewers with content they love, refining recommendation systems and personalizing viewer experiences.

Consumer awareness and usage of AI

A recent report by HUB, part of the Entertainment & Technology Tracker series, delves into consumer awareness and understanding of AI’s current capabilities. The study reveals that 71% of respondents are familiar with “generative AI,” and only 18% feel “very confident” in explaining what it is and does. Interestingly, 57% of respondents use one or more generative AI models, highlighting a significant gap between awareness and deep understanding.

Perceptions of AI: good vs. bad

The report finds that nearly half of the respondents view AI as a positive development, compared to about a quarter who see it as potentially negative. Among those who view AI favorably or unfavorably, a common belief is that AI fundamentally changes how we live and work. However, there are notable concerns, particularly around privacy, employment risks, and the potential misuse of AI for creating deepfake content.

Consumer interaction with AI

Consumers are increasingly interested in AI-driven features that enhance content discovery and selection. Despite this interest, there is a clear preference for human creativity in certain domains. For example, more consumers believe humans outperform AI in tasks like writing music or dialogue. Conversely, they view AI as equally capable of generating game dialogue or trailers and superior in tasks like CGI, writing descriptions, or creating subtitles.

The desire for transparency in AI-generated content is also strong. According to the report, 67% of respondents want to know if something is created using AI, underscoring the need for clear labeling and communication from content creators.

AI opportunities and challenges for the entertainment industry

For media executives, the rapid integration of AI presents both significant opportunities and challenges. AI streamlines production processes, reduces costs, and enables the creation of more personalized and engaging content. However, it raises critical questions about the balance between automation and human creativity. It also questions the ethical implications of AI use, and the need to address consumer concerns around transparency and data privacy.

AI is reshaping how content is produced and consumed and redefining the relationship between creators and audiences. As the industry adapts, embracing AI’s potential while addressing its challenges is key to sustaining growth and innovation in the entertainment sector.

The HUB report is useful for media executives looking to stay ahead in this rapidly changing landscape. By tracking consumer sentiment and behavior, companies can better anticipate trends, address concerns, and leverage AI to create a more dynamic and responsive entertainment ecosystem.

As AI continues to evolve, media companies must navigate these complexities strategically. Investing in AI technologies that enhance viewer engagement while maintaining transparency and ethical standards is crucial. Additionally, fostering consumer education around AI capabilities and limitations helps bridge the gap between consumer awareness and understanding.

Diversity, Equity & Inclusion | Industry-Research | Video

Diversity-driven success overlooked in film funding

The stories told on screen shape perceptions and inspire change. They also reflect society’s evolving identity. Understanding the diversity of those who create and star in these stories is critical to fostering an entertainment industry that genuinely mirrors the richness of the human experience. Representation in key creative roles shapes shared narratives and affects how audiences resonate with and engage with these stories, ultimately driving revenue growth.

The Hollywood Diversity Report, Part 1 highlights the undeniable link between diversity and financial success in Hollywood. In 2023, global box office revenue rose 31% to $33.9 billion, while the North American box office grew 21% to $9.07 billion. However, despite these gains, the domestic box office lags 21% behind the 2017-2019 average. The future of movie-going remains uncertain as the industry navigates the pressure of changing audience expectations and preferences, testing the industry’s resilience and capacity for innovation.

The theatrical dataset mirrors this trend. The 109 English-language films in the 2023 dataset represent a 22% increase from 2022 but fell short of the 146 films in the 2019 dataset. In 2023, theatricals span 12 primary genres. Action, constitutes 27.5% of releases, dominates, followed by comedy (20.2%), horror (12.8%), animation and biography (9.2% each), and drama (8.3%). While action and horror hold steady, comedy and biography have grown, animation dipped slightly, and drama declined. Biopics and dramedies emerge as notable subcategories.

Representation in casting

Cast diversity continues to evolve. Films with over 50% BIPOC (Black, Indigenous, People of Color) casts represent the plurality of top films for the first time in 2023, which marks a significant milestone in a 13-year trend. In 2011, 51.2% of films had less than 11% BIPOC representation; by 2023, this figure dropped to 8.5%. However, actors with disabilities remain largely absent, with 61.3% of films including no known disabled actors.

Actors with disabilities did experience modest gains, increasing their share of leads to 11.3%. However, visible disabilities remain absent among top leads. Women’s share of lead roles declined to 32.1% in 2023 from 38.6% in 2022, marking a significant setback. Female leads would need an 18% increase to achieve parity with male leads. Films with BIPOC leads often fall at opposite ends of the budget spectrum, either under $10 million or exceeding $100 million, reflecting a “feast or famine” dynamic.

Representation gaps persist across racial and ethnic groups. Latinx and multiracial actors remain underrepresented in all roles, while Black, Asian, Native, and Asian, Middle Eastern, and Northern African (MENA) actors are approaching proportionate representation. Gender disparities prevail; except for Latinas, women in every racial and ethnic group are underrepresented compared to their male counterparts.

Box office receipts

Despite continued disparities, box office performance reinforces the demand for diverse content. Films with 31-40% BIPOC casts achieve the highest median global box office receipts, while those with less than 11% perform the poorest. Median return on investment peaks for films with 41-50% BIPOC casts.

Audiences increasingly support diverse casts, with BIPOC moviegoers buying the most opening weekend tickets for seven of the top 10 films in 2023. Female audiences account for most ticket sales for three of the top 10 films, while 18- to 34-year-olds dominate ticket purchases for six of the top 10 films.

Audience preferences align with representation trends. Films with diverse casts achieve higher box office performance across global, domestic, and opening weekend metrics. Nine of the top 10 global box office films feature cast members with over 30% BIPOC representation, demonstrating the commercial success of diversity. The data underscores the importance of reflecting America’s increasingly diverse audience in theatrical releases.

The 2024 Hollywood Diversity Report: Part 2 focuses on the top 100 English-language streaming films from 2023. It offers insights into genre trends, budget allocations, and representation among leads, directors, and writers. As outlined in Part 1, the theatrical film industry registers incremental recovery in 2023, but streaming remained dominant despite studios reducing original content production. This strategic pullback coincided with economic uncertainties and labor disputes, resulting in 115 streaming original releases compared to 161 in 2022.

Comedy led streaming releases at 30%, followed by drama (17%) and action (14%). Notable shifts included a rise in biography films (4% to 10%) and a decline in animated features (13% to 9%). Budget distribution starkly contrasted with theatrical films: 61.3% of streaming films had budgets under $20 million, compared to 30.3% of theatrical releases. Only 3.2% of streaming films had blockbuster budgets ($100 million or more), dwarfed by 25.7% for theatrical films.

Representation in leading roles

BIPOC and women actors achieved proportional representation among leads in streaming films in 2023, marking progress since 2022. However, disparities persisted within specific groups. Latinx (8%) and Asian (4%) leads remained underrepresented, while Black (16%) and Middle Eastern/North African (MENA) leads were overrepresented. Native (1%) and multiracial (12%) actors approached proportional representation. Gender dynamics varied by group: women outnumbered men among white, multiracial, and MENA leads, while men predominated among Black, Latinx, Asian, and Native leads.

Budget disparities also reflected systemic inequities. White male leads were most likely to star in films with budgets over $20 million (57.2%), while BIPOC leads (58.6%) and White female leads (77.5%) frequently headlined films under $20 million. Women with disabilities remained underrepresented despite an increase in lead roles from 6.1% in 2022 to 9% in 2023, with no visible disabilities represented.

Directors and writers

BIPOC and women directors saw gains but remained underrepresented in 2023. Women directors faced a budget ceiling of $50 million, while BIPOC directors maxed at $100 million, with significant opportunities skewed toward white men. Among writers, similar patterns emerged. Streaming films with BIPOC and women writers featured more diverse and balanced casts, yet these groups remained underrepresented. Multiracial and MENA writers neared proportional representation. However, shares for Black, Latinx, and Asian writers fell short.

These reports underscore the ongoing evolution of Hollywood’s streaming ecosystem. While strides in representation are evident, industry efforts still need to achieve inclusiveness across all facets of production. Examining theatrical and streaming releases as viewing habits evolve offers valuable insights into each platform’s unique challenges and opportunities. These distinctions help illuminate how representation impacts storytelling, audience reach, and industry success across a diverse and changing media landscape.

DCN-Research | Featured Post | Video

Decoding the video habits of Gen Z and Gen Y

Younger audiences, especially Gen Z, are shifting much of their video consumption to platforms like YouTube and TikTok. These platforms evolved from simple entertainment spaces into hubs that meet various emotional and intellectual needs, increasingly replacing traditional media consumption. The rise of these digital spaces fundamentally changes how people create, share, and consume media.

Digital Content Next’s (DCN) new study, Decoding Video Content Engagement (full access exclusively for DCN members) explores how Gen Z and Gen Y interact with video content across YouTube and social media. These platforms, central to younger generations’ entertainment and information routines, feature a range of content. This content includes professionally produced material by established media brands and more spontaneous creations by independent influencers. This study provides insights into the motivations and behaviors of these audiences, with a follow-up quantitative phase planned to deepen the understanding.

How younger generations connect with video

The study identifies four primary themes in the way Gen Z and Gen Y engage with video content:

1. A primary entertainment medium

For younger generations, video is the primary entertainment medium. Unlike traditional media, which often require scheduled programming, platforms like YouTube and TikTok offer on-demand access to diverse content for education, escapism, and entertainment. This flexibility meets emotional and intellectual needs and enables creators and media brands to connect with younger audiences where they already are.

2. Algorithm-driven discovery

Algorithms are crucial in helping users discover content that matches their interests. Gen Z and Gen Y are active in shaping their feeds by engaging with content they enjoy, using likes, comments, and shares. This active participation enhances user satisfaction and ensures the platform serves more of what resonates with them, increasing their video consumption and deepening their engagement with YouTube and TikTok.

3. Instant decisions

Viewers often decide to engage with a video within the first 10 seconds. This makes the opening moments of a video critical for capturing attention. Whether from an influencer or a media brand, personal, relatable, and authentic content is more likely to engage viewers. Dynamic intros and the creator’s personality play a central role in sustaining interest and encouraging engagement.

4. Creator-driven content

Creators play an essential role in driving content consumption, as their personality, interests, and authenticity are key factors in fostering viewer engagement. Creators often appear as real, personal, and relatable figures. Therefore, audiences feel they can form connections with them, even if they are strangers in real life.

Consistency in content, whether in tone, subject matter, or humor, is vital in maintaining trust and building a loyal audience. Users anticipate new videos based on their enjoyment of previous content and expect a certain level of predictability. However, the authenticity of the personal brand, or media brand, is paramount.

Monetization and platform preferences

The rise of creator-led content presents new monetization opportunities as creators entertain and turn their audiences into valuable assets. Platforms like TikTok and YouTube allow creators to generate income through sponsorships, partnerships, and other revenue streams. The 50 Richest Content Creators study further highlights the earning power of top creators.

Media companies must recognize creators’ ecosystems and understand how they engage audiences. By understanding how creators and influencers resonate with younger demographics, media companies can enhance their brand presence and create authentic content that aligns with the expectations of their target audience.

Influencers’ role in the news ecosystem

The rise of news influencers further illustrates how traditional media consumption disrupts. According to the Pew Research Center’s study on America’s News Influencers, about one in five U.S. adults, and 37% of 18 to 29 year-olds, regularly access news through influencers on platforms like TikTok, YouTube, and Instagram. These influencers often operate independently of traditional media organizations and blend entertainment, personal branding, and journalism to engage their audiences.

Influencers often provide diverse content, from factual updates to humor, opinions, and breaking news. As the DCN study highlights, influencers often present differing opinions and foster engagement by offering unique perspectives. Pew reports that 65% of followers believe influencers enhance their understanding of current events. However, concerns about accuracy and accountability persist.

Navigating opportunities and challenges

As the digital landscape evolves, DCN’s findings underscore the need for media brands to adapt to the changing behaviors and preferences of younger audiences. Platforms like YouTube and TikTok offer opportunities to create personalized, authentic content that resonates with Gen Z and Gen Y. The growing creator economy further illustrates the value of influencer partnerships, enabling media companies to tap into established audiences and generate revenue through sponsorships and other collaborations. However, brands must remain vigilant about authenticity, as younger viewers quickly reject content that feels disingenuous or overly commercialized.

DCN’s follow-up quantitative research will provide deeper insights into these trends. It will offer actionable recommendations for media companies aiming to connect with younger audiences more authentically and engagingly. As video content continues to dominate the digital ecosystem, understanding the role of creators and their influence on consumer behavior is essential for navigating the future of media consumption.

Industry-Research

Audience trust: journalists vs independent creators

Journalism faces a significant challenge in maintaining trust as audiences increasingly turn to online content creators who produce work resembling traditional journalism. Although journalism remains a cornerstone of democracy, it now competes with creators who often build large and deeply engaged followings, which rival (or even surpass) established news outlets. A new report suggests that this trend is driven by the contrasting ways journalists and creators connect with their audiences.

In The Future of Trustworthy Information, Julia Angwin explores the shifting dynamics of trust in the digital age. Through her work at the Shorenstein Center, she is exploring the roles of content creators and how they compete with, and can inform the work of traditional journalists. In particular, she examines their relationships through the lens of who today’s audiences trust and why.

Building blocks of trustworthiness

Angwin adopts a trust framework from Roger C. Mayer’s 1995 “Integrative Model of Organizational Trust,” focusing on three key factors:

  1. Ability: Competence in performing a task.
  2. Benevolence: Motives that prioritize the audience’s best interests.
  3. Integrity: Adherence to principles that align with the audience’s values.

These elements are critical for both creators and journalists but manifest differently in their practices.

Demonstrating ability

Traditional journalism emphasizes expertise in reporting processes—verifying facts, cultivating sources, and concise writing—but often fails to make this expertise transparent to the public. Reporters rarely highlight their qualifications, and newsroom norms discourage reliance on personal expertise. Efforts to enhance trust, such as detailed reporter biographies, remain underutilized and ineffective.

In contrast, creators highlight their expertise directly. Many specialize in specific domains, such as doctors debunking medical misinformation or leather workers analyzing luxury handbags, and prominently feature their credentials. They tailor storytelling to build trust by guiding audiences through evidence before reaching conclusions. They also emphasize visual storytelling, as today’s audiences gravitate towards video-based content. The use of green screens capitalizes on this trend while reinforcing credibility by presenting data in real-time.

Perceived benevolence

Audiences increasingly question journalists’ benevolence, with only 23% of Americans believing national news organizations prioritize the public’s best interests. Skepticism stems from perceived political biases, sensationalism, and the profit motives of large media conglomerates. Individual journalists often struggle to overcome institutional distrust, especially when constrained by editorial policies.

Interestingly, audiences do not perceive creators as benevolent either. Particularly when it comes to product reviews, audiences are skeptical of trustworthiness. Creators counter this by positioning themselves as community servants. They frequently respond to audience requests and tailor content to viewer interests. Transparency about financial motives sets them apart; many creators decline brand partnerships or disclose them carefully, recognizing authenticity strengthens trust. This direct engagement fosters a perception of benevolence that journalists often lack.

Upholding integrity

Both journalists and creators navigate a low-trust digital environment where misinformation proliferates. Accusations of sensationalism or bias often undermine journalistic integrity, while creators address skepticism around product endorsements. To reinforce integrity, creators disclose sources, provide citations, and avoid overt monetization. Visual evidence and informal presentation styles humanize creators, enhancing their perceived honesty.

Implications for traditional journalism

The rise of content creators offers valuable lessons for journalism. Creators enter the digital space understanding that trust must be earned, not assumed. Their focus on transparency, responsiveness, and audience engagement contrasts with journalism’s historical reliance on legacy credibility. This gap underscores the need for journalists to adopt practices that tangibly demonstrate trustworthiness. These practices include showcasing expertise, engaging directly with audiences, and maintaining transparency about financial and editorial motivations.

Journalists must prioritize meaningful accountability to rebuild trust with the public. They often need more consequences for mistakes than creators, who face immediate audience scrutiny for errors. Engaging directly with affected communities and investing in public editors and reader feedback mechanisms can enhance transparency and foster trust. While resource constraints are real, addressing the trust deficit is essential to journalism’s core mission: holding power accountable. Small steps in this direction can help restore credibility and public confidence.

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