AI Is Not Technology. It’s Strategy

A way of doing business now, not in the future
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In 1961, a one-armed employee punched in to the swing shift at General Motors’ Inland Fisher Guide Plant in New Jersey, and never punched out. Unimate was the first robot integrated into a factory assembly line – plucking searingly hot car components from metal die casters and swiftly fitting them onto auto bodies. Rival automakers, registering the impact of this new technology, soon raced to reap similar benefits for themselves – thus igniting the transformation of global manufacturing.

Jon Klen, president of Vilynx

Jon Klen, president of Vilynx

That’s how business works, right? 1) Trailblazers leapfrog the competition, then 2) everyone else imitates to survive.

Not the media business, apparently. Netflix has upended the industry, thanks to their version of Unimate: artificial intelligence, which informs every aspect of their operation from show picking to content creation to customer acquisition and retention. By analyzing dozens of fields of data from every frame of video and tracking its use to the nano-second, Netflix is racking up tens of millions of paying subscribers across the globe. Their stock price now dwarfs incumbents like Disney, AT&T (which owns WarnerMedia), and Comcast (owner of NBCU). You’d think that those giants, duly awakened, would be feverishly launching company-wide AI initiatives of their own. But they’re not.

Instead, they’re busily amassing content through multi-billion-dollar acquisitions to populate new Netflix-like direct-to-consumer channels. But unarmed with deep insights about that content and how it is being consumed, the incumbents are hopelessly under-equipped for the battle ahead. Like the Polish Army throwing cavalry against Hitler’s blitzkrieg, they’re fighting the last war. 

How to win this one? Easy. Stop viewing AI as arcane technology, start accepting it as an irreversible paradigm shift. Like iPhones and iPads — technology that drove the on-demand revolution – and social media – technology that gave the audience a seat at our creative and marketing tables – AI ushers in a fundamentally new way of running a media company, based on deep vision into content and how it is being used. It’s not the future – it’s very much the here and now. To join the present, simply follow these 5 fast steps:

1. Familiarize Yourself. Over time you’ve wrapped your arms around online video, HD, and OTT. You got this AI thing. Any number of quick-read, non-techy newsletters (including Netflix’s own Tech Blog on Medium, Shelly Palmer’s weekly summary, the WSJ Pro daily AI report) will get you up to speed rapidly on AI and its media applications. You’ll soon see that there’s nothing mystical about it — it’s just another tool for tweaking your business, and beyond.

2. Appoint an Owner. Name one high-level executive to pull together groups across your organization and identify one (just one!) cross-functional AI initiative this year, instead of the isolated ad hoc tests that spring up here and there with no central organizing vision. If they can’t pitch that project in plain English, it’s the wrong idea.

3. Quantify the Benefits. AI gets less scary when you put hard numbers against the actual costs (perhaps for increased cloud storage, data processing, or hiring domain experts) and compare those with the potential benefits (e.g., production efficiencies, archive monetization, more targeted advertising delivery, increased customer acquisition and reduced churn).

4. Budget for It. A recent Harvard Business Review article notes that AI is not a one-time capital investment in some pulsing Borg Hive-Brain, but rather an ongoing business expense. The algorithms learn and improve as reality – such as user behavior – changes. Baking that iterative process into your operating budget is essential.

5. Hit Hyperdrive. KPMG projects that media will be the industry most transformed by AI over the next two years. Your company can ride that wave or be swamped by it. Organizations only adapt to unsettling realities when those at the top mandate it. So articulate a vision for your new AI-optimized company, and make it everyone’s priority.

Once you accept that AI is not about technology, but strategy, you’re on your way. Just as Bob Iger did not need to understand how Wolverine gets from the camera to your iPad in order to spend $80 billion acquiring Fox, you don’t need to grok the algorithmic intricacy of AI – you just have to understand what you can do with it. As Ford and Chrysler did when they saw the productivity leaps Unimate was driving at GM, you can point to Netflix’s AI and tell your CTO “give me that.”

Jon Klein is the president of Vilynx, an artificial intelligence platform focused exclusively on media. Klein also served as President of CNN/US from 2004-2010.

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