The Daily: Very specific 2024 predictions (Fall edition) part 1—Rejecting GenAI, Chrome’s consent workflow, and Tubi ascends

In part one of this two-part podcast episode, we discuss some medium-term predictions that are too specific to be 100% certain about but could still come true, including: why the sentiment towards GenAI might turn, what to expect from Google’s new consent workflow now that it is not phasing out third-party cookies from Chrome, and why Tubi might be about to leapfrog Hulu, Disney+, and Peacock. Tune in to the discussion with host Marcus Johnson, and analysts Ross Benes, Evelyn Mitchell-Wolf, and Max Willens.

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Episode Transcript:

Marcus Johnson (00:00):

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Evelyn Mitchell-Wolf (00:17):

We're already seeing this happen. I don't know that I fully believe that it will spark any sort of a different conversation than has already not been sparked, but I mean, I do expect there to be more companies that say, "Nah, I'm not in on this." So I guess I'm maybe half in.

Marcus Johnson (00:38):

Hey, gang. It's Monday, September 23rd. Max, Evelyn, Ross, and listeners, welcome to the Behind the Numbers Daily, an eMarketer podcast. I'm Marcus. Today, I'm joined by all of the senior analysts on our digital advertising and media desk. One of them is based in Philly. He's Max Willens.

Max Willens (00:56):

Yo.

Marcus Johnson (00:56):

The other living down in Virginia is Evelyn Mitchell-Wolf.

Evelyn Mitchell-Wolf (00:59):

Howdy.

Marcus Johnson (01:00):

And just north of New York City, we have Ross Benes.

Ross Benes (01:04):

Hello, Marcus.

Marcus Johnson (01:05):

Whoa.

Evelyn Mitchell-Wolf (01:06):

Hello, New York.

Marcus Johnson (01:09):

That was the best one. Today, we're talking predictions, but we start with today's fact. Wolfgang Mozart was how old when he composed his first piece of music in 1761?

Evelyn Mitchell-Wolf (01:20):

12.

Ross Benes (01:22):

Seven or something? Yeah, something crazy young.

Marcus Johnson (01:22):

Five.

Evelyn Mitchell-Wolf (01:24):

Five?

Max Willens (01:25):

Five.

Evelyn Mitchell-Wolf (01:25):

Yo.

Marcus Johnson (01:25):

He was five years old when he composed his first piece. By six, he had performed before two imperial courts. He ended up composing over 600 pieces in his short life. He died at age 35, which means after starting to compose at age five, he would go on to average one new composition every two weeks.

Evelyn Mitchell-Wolf (01:45):

Holy cow.

Ross Benes (01:46):

You could check out the movie Amadeus. I can't remember if they go in depth on that or how historically accurate it is, but it's there.

Marcus Johnson (01:54):

Oh.

Evelyn Mitchell-Wolf (01:54):

Wow.

Marcus Johnson (01:54):

There we go.

Ross Benes (01:55):

It gave us that great Falco song.

Max Willens (01:58):

That movie rules.

Marcus Johnson (01:59):

Oh. Oh, it does. Okay. [inaudible 00:02:01]. Anyway, today's real topic, very specific, but highly unlikely predictions 2024 fall edition Shark Tank style, part one.

(02:17):

In today's episode, we'll cover three very specific, but highly unlikely predictions we expect to happen in the next six months or so, and then we'll have another three for you in tomorrow's episode. So how is this going to work? Well, each person, Max first, we'll have 60 seconds to pitch a very specific but highly unlikely prediction for 2024, and then the rest of us, me, Evelyn, Ross, and the folks listening, will decide if we are going to, quote, unquote, "invest/believe in" his prediction. Then we move to the next contestant and repeat. So Evelyn will be next, and me, Max, and Ross will become the new panel. Each of our guests have one prediction for today, and then another each on tomorrow's episode. So let's do it. But before we get to it, I just want to check in on our predictions we made in the summer.

Max Willens (02:55):

Must we?

Marcus Johnson (02:56):

Sorry, Max. So one of Max's didn't go so well, so that would've been... He said none of Paramount's current suitors are going to wind up acquiring it, and Shari is going to have to sell it piecemeal. Skydance Media is buying Paramount Global, which was one of its current suitors at the time. However, Max, you also said advertisers will not coalesce around the measurement standard for retail media until the aggregator's peak growth subsides, and the next digital consumer privacy lawsuit will involve a retail media network. So that one's better.

Max Willens (03:24):

We're saying there's a chance.

Marcus Johnson (03:27):

We are.

Max Willens (03:27):

We are saying there's a chance.

Marcus Johnson (03:28):

That's what I'm trying to tell you. Suzy was on that episode as well. She said Nordstrom will go private in the next 12 months. We'll see. A few weeks ago, Alex Halverson of the Seattle Times reported that Peter and Erik Nordstrom offered to take the company private, committing cash and equity to the deal valued at close to $4 billion. She also said to stop the leaky bucket, Starbucks will pilot drone deliveries in select cities. No updates there, but Zak Stambor was writing that new Starbucks CEO, Brian Niccol, is prioritizing trying to reestablish Starbucks stores as the community coffee house.

(03:58):

And then Paul was on that show. He said the NBA contract will go to Disney, NBCU, and Amazon. A major milestone. He nailed it. However, Warner Bros. Discovery is suing the league after its TNT channel missed out on the new deal. So that might change things.

(04:10):

And then finally, he also said the publisher AI gold rush will continue. Publishers doing deals with AI companies, licensing deals with them. The week after that prediction came out, Time magazine signed a licensing deal with OpenAI. And then in August, Condé Nast joined the party by signing a multi-year partnership with OpenAI. And we're not quite halfway through H2, so that one's going well for him as well.

(04:32):

All right, folks. Let's see if we can nail some more predictions. We're going to start with Max as me, Ross, and Evelyn transform into the sharks, into the panel. So Max, what's your first prediction?

Max Willens (04:45):

I predict that a company will publicly repudiate generative AI as a technology, thereby setting off a big conversation in tech and media about its efficacy and usefulness.

Marcus Johnson (04:57):

Okay. Why?

Max Willens (04:59):

So we've already started to see in different corners of the media and tech ecosystems people starting to wonder about the upside of this technology. I think the most visible example of this was a report that Goldman Sachs published in June in which its main thesis essentially was that gen AI is not going to deliver value or results that justify the scope of investment that has already been made in the technology. Some of the experts they interviewed for it predicted that few, if any, true breakthrough uses will come within the next 10 years. And since then, there have been little signals that the hype that pushed this technology into our consciousness is starting to run up against reality, the information reported in September that somewhere between 0.1 and 1% of Microsoft 365 users are using the AI features in Copilot.

(05:53):

On the one hand, you have signs that adoption is really not continuing at the pace that rollout did, and then you have the lingering environmental challenges. So there was some reporting that came out earlier this month about how the energy needs for gen AI are so significant that coal-fired power plants are now coming back online to meet the energy needs required to power the data centers that make this tech possible. And I think if you add in... With enough of those in the air, it will give a CEO or a CMO cover to essentially publicly step out and say, "We don't think this is good for our customers or we don't think this is good for the planet. We are not going to use it." And provided they do it from the right perch or platform, I think this could set off a big conversation in and around tech and media about whether this technology is really going to be all it's been cracked up to be.

Marcus Johnson (06:49):

Mm-hmm. So yeah, that Goldman Sachs number said tech giants and others spending about $1 trillion on AI CapEx in the coming years, and it isn't worth it.

Max Willens (07:00):

That's a lot of CapEx.

Marcus Johnson (07:01):

I think it's certainly a fair point. I also looked at this as how much are users going to be bothered if companies are investing in it less, and it seems like the adoption of gen AI, the option is not on a great trajectory because it's already started to slow, and I think in large part because folks don't really have... And so we don't know what to use it for.

(07:23):

So if you look at social media adoption, they knew what to use it for. That got close to 50% of the population using it before growth slowed to single digits. Same for digital video. However, gen AI adoption will hit a single-digit growth in two years' time and would've only reached 37% of the population. So it's slowing a lot faster than some of those other things that we do with media and technology because folks don't know how to use it or why they should be using it. And there's some research from MIT Tech Review and Boston Consulting Group showing that when you ask people what do you use gen AI for, especially in the marketing world, it's everything, which means it's also nothing. So yeah, I think I'm with you on this one so far.

Evelyn Mitchell-Wolf (08:05):

I have a question. Do you have any thoughts on what size company you're predicting will repudiate gen AI?

Max Willens (08:14):

I mean, I think it'll be a company that's well-known certainly within a certain industry, but potentially nationally.

Evelyn Mitchell-Wolf (08:15):

Nationally. Okay.

Max Willens (08:20):

You could see something like... I could see a movie studio like A24, for example, stepping out and saying, "We are not going to distribute any movie that involves gen AI in its production." And that's a pretty easy position for them to take. I mean, I think it's likely that whatever company does this is going to be in media.

(08:44):

It's possible also that something that has more of a history of strong environmental stances like Patagonia, for example, could step out and do something similar. But because I think the stance would be most momentous in a field like media where the potential disruption is greatest. It doesn't, I don't think, mean that much if a forestry company comes out and says it. But I do think that it's likely to be a reasonably well-known company within the media and advertising sector.

Evelyn Mitchell-Wolf (09:14):

Okay. I ask because I've already been hearing companies doing an unbranding thing where I think when... I can't remember exactly what the name of the company was, which I think says something in and of itself, but it was a marketing creative company saying, "We will not be using gen AI. We are going to support our creative professionals and the humans behind what makes good creative and stick to that vision." And it was very well-supported, or a well-received announcement, and it was pitted against something like Adobe, which is leaning very heavily into the AI boom.

(09:51):

So we're already seeing this happen. I don't know that I fully believe that it will spark any sort of a different conversation than has already not been sparked, but I mean, I do expect there to be more companies that say, "Nah, I'm not in on this." So I guess I'm maybe half in on this.

Marcus Johnson (10:09):

I'm half in too.

Evelyn Mitchell-Wolf (10:09):

Yeah.

Ross Benes (10:10):

Yeah.

Marcus Johnson (10:10):

Ross.

Ross Benes (10:11):

Well yeah, I'm going to be uninteresting here and also go half in because I do believe that there will be a company, maybe more than one, that will make a stance like Max is saying, but I'm not convinced that it will impact the broader trend around everyone freaking out about AI or everyone investing in AI. So what I would need convincing to buy all in would be if one company does it, so what? Why is that actually going to affect anything?

Max Willens (10:41):

I guess I will retreat to me originally saying it will spark a conversation, because I think it's fair to say that it would be a lot to have one company's statement or position cause a widespread slamming on the brakes. But I do think it's possible that if someone did this at the right time, steps out at, say, Davos for example, where everybody loves to spend too much time picking apart what immensely wealthy and powerful people say, I do think that it would be... a platform like that could potentially be a great place to force everybody to opine about it for several days.

Evelyn Mitchell-Wolf (11:25):

Or CES.

Marcus Johnson (11:27):

Yeah.

Max Willens (11:27):

There you go.

Marcus Johnson (11:27):

One of the two.

Evelyn Mitchell-Wolf (11:27):

Yeah.

Marcus Johnson (11:30):

All right, well half of an investment point from each gives you 1.5. That's not a bad start, Max.

Max Willens (11:34):

Yes.

Marcus Johnson (11:35):

Let's go to Evelyn for your first prediction.

Evelyn Mitchell-Wolf (11:38):

My prediction is that Google will start testing its new consent workflow in Chrome right after the holiday season without warning. So to catch everyone up, instead of blocking third-party cookies wholesale for all Chrome users, Google will offer a, quote, unquote, "new experience in Chrome" whereby users can opt into or out of third-party cookies. And that means that while Google won't kill third-party cookies in Chrome, consumers effectively will. Marcus and I discussed the situation on an episode of this podcast that aired back in August. So if you need more information or you want to hear about some data on the subject, I would go listen to that.

(12:15):

But the end result of all of this will be largely the same as it would've been if Google had just stayed the course with its original plan. What we don't know is when this will happen. I predict that Google won't rock the boat again before the holiday season. But I think that once the holidays are over, we'll start seeing signs that Google is getting ready to launch its new consent workflow.

(12:36):

From Google's initial statement, it seems like it's working with regulators and industry stakeholders to fine-tune the language and look of this prompt, but I think we might start seeing it out in the wild either before we get a formal statement or timeline update from Google or on the same day as the new experience is launched. That's basically what happened with AI Overviews when the feature had been in beta with no formal launch timeline communicated, and then Google used its I/O event as a springboard to introduce the feature. And Google also has a recent track record of making important announcements right before earnings season, so I think that's what we're going to get with this as well.

Max Willens (13:10):

I think I'm half in here. A hundred percent with you on the timing. They're not going to freak anybody out by doing this in Q4. I will say, though, that given the immense scrutiny that the business finds itself under, particularly the role its adtech business plays, I think that they're going to over-communicate here. And I'm curious why you think there won't be warning. Is it just what you were saying earlier that they have a track record of springing SGE, for example, on people?

Evelyn Mitchell-Wolf (13:42):

Yeah. I mean, I think it's just recently, the last year there's been a lot of springing things without enough warning. And also, where this is concerned, there is no amount of warning that will be enough. I think even if there were some sort of announcement like when Google originally communicated that it was making a U-turn on its cookie plans, it was received as if it were like a with-no-warning change even though there had been signs for months.

(14:12):

So I think that's what it's going to feel like even if we see signs moving up to it. When the prompt actually hits the marketplace, I don't think it's going to be like a "Hey, get prepared. In three months' time, we'll start putting out this prompt." It'll be like, "We've worked with regulators. As of today, this prompt is now available for however many percentage of users." And I think part of that is because they haven't communicated a timeline at all around this yet that they'll be able to jump in at the beginning.

Max Willens (14:45):

Makes sense. I remain half in, but...

Evelyn Mitchell-Wolf (14:49):

This is supposed to be unlikely, right? Specific and unlikely.

Marcus Johnson (14:54):

Well, not the most unlikely [inaudible 00:14:57].

Ross Benes (14:58):

Just making this whole trend around Google doing a thing that everyone else has to react to makes me buy in because that's happened many times.

Marcus Johnson (15:09):

So Ross, you're in completely? Full point?

Ross Benes (15:09):

Why not?

Marcus Johnson (15:11):

Why not? Wow. Frivolous.

Evelyn Mitchell-Wolf (15:16):

I'll take it.

Marcus Johnson (15:17):

I'm half in, so that gives you two. [inaudible 00:15:21]. Yeah, that gives you two full investment points, so well played. Let's move to Ross. What you got for us, mate?

Ross Benes (15:29):

So in a year, Tubi will account for 2.5% of total time spent with streaming and TV as judged by Nielsen. And the reason that is significant is it'll put in ahead of everyone except YouTube, Netflix, and Amazon.

Marcus Johnson (15:48):

So I was looking at this. So YouTube, according to the Nielsen's Gauge that Ross mentioned, so Tubi is currently ranked in seventh place. So it goes, just for context for folks, in terms of the ranking of where Americans spend their time streaming things, basically watching TV, whether it's streaming or cable or whatever, YouTube's first with 11%, Netflix has eight, then it's Prime Video with three and then... So that's your top three. Then you've got Hulu, Disney+, and Peacock with just over 2%. So that's four, five, six, and Tubi in seventh place with 1.8. Ross says that they can get to 2.5 within a year.

Ross Benes (16:28):

Yeah, I mean they got... They're free, so that's a huge advantage over the subscription services, over the number of people they can reach, and they have a very esoteric library of shows that the others are a little bit more standardized. So I don't think it's going to be anything rivaling Netflix, but I don't see why Tubi can't pull ahead of something like Peacock or even eventually Hulu because they have been the primary beneficiary of people wanting to find new stuff for free, and they have Fox putting a lot of money behind it because Fox has no subscription streaming service.

Marcus Johnson (17:05):

Yeah.

Ross Benes (17:05):

They have Fox Nation, but they have no general entertainment subscription streaming service.

Marcus Johnson (17:09):

Mm-hmm.

Evelyn Mitchell-Wolf (17:10):

Does Tubi become preloaded on any kind of smart device or smart TV?

Ross Benes (17:16):

You usually have to download Tubi just like you'd have to download Peacock or Netflix or those. It's not built in the same way that Samsung TV plus is when you turn on Samsung or the Roku channel is because they aren't an OEM. So they'd have some discoverability issues to overcome.

Evelyn Mitchell-Wolf (17:32):

Yeah. I think that's the primary thing that is keeping me from going all in, is... And I also am not a huge TV watcher or streaming watcher, so I feel like I am missing a good portion of upper funnel brand marketing that exists out there. But I don't think I've seen anything advertising Tubi at all in a very, very long time. Can't even remember the last time I've seen Tubi. So I just wonder how it can get there if it doesn't go harder on trying to make its name well-known.

Marcus Johnson (18:02):

Mm-hmm.

Max Willens (18:03):

I'm intrigued by the idea that a fast player will leapfrog a bunch of the second-tier subscription-focused guys. I think that that's, as a thesis, that's intriguing to me, but I am a little dubious on the timeline of this unless there's some kind of major coup on the content side. Because it is a pretty compelling place to just look for something random and pretty interesting to watch, but I do think that enough people have enough subscriptions that they're already paying for where they find stuff that they like. And so I think Tubi is going to have to have some kind of surprise hit on its hands if it wants to get to 2.5%. So I am out.

Marcus Johnson (18:46):

So let me try to make the case both for and against Ross's point in the same little mini analysis, and then maybe I can convince Max to actually give half a point. So I'm trying to help you out, Ross, which I don't know why because we're supposed to be going against each other because it's Shark Tank, but whatever.

(19:03):

All right, so my back of the napkin analysis. I was looking at what gains Tubi's made in the past year. So in terms of share, it went from 1.3 to 1.8 in the past year. In terms of total time people spend watching TV, 1.3 to 1.8%. In terms of [inaudible 00:19:18]-

Evelyn Mitchell-Wolf (19:18):

And Ross, you're saying it'll get to how many again? How many points?

Ross Benes (19:22):

2.5, because these were supposed to be very specific estimates. So I wanted to go to a 10th of the percentage point.

Evelyn Mitchell-Wolf (19:30):

Thank you.

Marcus Johnson (19:30):

We appreciate the decimal. In terms of ranking, actually fell one place, though, from sixth to seventh. Peacock overtook it. Now, we can assume that's mainly just an Olympic bump because NBCU took the top 19 broadcasts in August, with Peacock seeing a near 50% increase in monthly viewers. In June before the games, Peacock was actually the ninth most popular streamer and then jump to sixth in August. So you can throw that out. And so Tubi, currently in seventh, it should be able to leapfrog Peacock in sixth as Peacock comes back down to earth after the Olympics.

(20:04):

I don't think it can overtake Disney+ in fifth because they've been gaining share. However, Ross mentioned Hulu. Hulu has gone in the last year from 3.6% to 2.4% of Americans' TV time, so in the wrong direction in the past year. So I think Tubi could catch them, and they're currently in fourth. So all told, I think Tubi could be in fifth place with 2.1% share of total TV time versus-

Ross Benes (20:30):

Should've just let Marcus do this one.

Marcus Johnson (20:32):

... Ross' fourth place-

Ross Benes (20:32):

He's so much better prepared than I was.

Marcus Johnson (20:34):

... with 2.5. So I'm almost completely with you, but just a touch more conservative.

Evelyn Mitchell-Wolf (20:40):

Yeah, I think I'll go half in because it seems like that's the broad direction things are going. I don't know if I'm fully there on the very specific components. 2.5% seems to be... That's a larger jump than Tubi has made in the last year market-share-wise or time-spent-share-wise. Share-of-time-spent-wise. There we go.

Marcus Johnson (21:02):

Mm-hmm.

Evelyn Mitchell-Wolf (21:02):

But-

Ross Benes (21:03):

And just to be clear because people might think, "Oh, 2.5 isn't much," that's total television. So-

Evelyn Mitchell-Wolf (21:03):

It's a lot.

Marcus Johnson (21:03):

Yeah.

Ross Benes (21:09):

If you're looking at the streaming portion, you have to multiply that by almost three because streaming is-

Evelyn Mitchell-Wolf (21:14):

Smaller.

Ross Benes (21:15):

... only about a third of the total time spent. Most of it's going to linear TV. So Tubi's share, if it got to 2.5, would actually be more like 6% of streaming or so.

Evelyn Mitchell-Wolf (21:15):

Right.

Marcus Johnson (21:15):

Mm-hmm.

Evelyn Mitchell-Wolf (21:26):

Well, and linear TV is also losing share gradually over time. So hmm.

Marcus Johnson (21:26):

Yeah.

Evelyn Mitchell-Wolf (21:32):

Yeah, I think I'm going to stick half in.

Ross Benes (21:34):

Yeah, the amount that you would multiply it by will be different in a year, for sure, than it is right now.

Marcus Johnson (21:38):

Max, did we move you?

Max Willens (21:40):

I'm a quarter of a point in.

Marcus Johnson (21:41):

A quarter? That's not a thing.

Max Willens (21:44):

Oh, yes it is, because my quarter is in Ross's coffers now.

Ross Benes (21:51):

The Federal Reserve tends to move interest rates in quarter points.

Max Willens (21:56):

There you go. Yep.

Marcus Johnson (21:57):

Hmm. Damn it, Ross.

Ross Benes (21:58):

So it is a thing.

Max Willens (21:59):

[inaudible 00:21:59]. That's right. I think the thesis is, about a fast guy climbing into that spot and surpassing the second tier of the paid guys, is right. I was quibbling over percentage and timeframe, but at the high level, I think Ross is onto something. So that's where my quarter point comes from.

Marcus Johnson (22:22):

All right, perfect. Thanks for inventing that. So let's recap. Max is a company will publicly repudiate gen AI as a tech, sparking a big conversation about it. That got 1.5. Evelyn's got two. That was Google starts testing its new consent workflow in Chrome after holidays without warning. And then Ross's Tubi will account for 2.5% of total time spent with streaming and TV, he got 1.25.

(22:52):

To the listeners, I'm terribly sorry. I tried so hard to just make it one-point investments, and then Suzy invented the half point. And now, Max has created this monstrosity, the 1.25.

(23:03):

Anyway, yeah, that's our predictions for today. We'll have three more very specific, but highly unlikely predictions for you in tomorrow's episode. That's all we have time for, for now. Thank you to Max, Evelyn, and Ross. We'll see you tomorrow. Thanks to Victoria, who edits the show. Stuart runs the team. Sophie does our social media. And thanks to everyone for listening in. We hope to see you for tomorrow's predictions episode of Behind the Numbers Daily, an eMarketer podcast.