1. ChatGPT’s Ads Thing Gets Real
ChatGPT is going to be the first of the GPTs to have ads.
It’s an idea that may make some sense on paper, but in practice…that’s another story.
Because it’s not like they haven’t been practicing for this moment, right?
All those annoying “would you like me to help you remove any other kind of stain?” and “I can locate a zoo nearby where you can see African elephants in person” follow-ups are meant to keep you engaging with it, sort of like those Law And Order episodes where the goal was to keep the kidnapper on the line long enough for the police to track his location.
Which is why I am a bit leery of the exuberance I’m seeing around this project. Because I am sure I am not the only one who thought, “well then, I guess it’s just you and me now Claude.”
Why It Matters
The “why” of GPT ads is pretty simple: like Google, people are often searching for something in particular when they are using a GPT, be it a way to remove mustard stains from a white shirt or, like the guy in this Anthropic ad, develop a six-pack.
That the denouement of the ad, as Sam Altman pointed out in a cringey essay-length tweet, is not how the ad platform will actually work is sort of beside the point—it’s how people fear that it is going to work.
Which matters because even if the ad product winds up being little Google-like boxes that are clearly marked “ad” in your feed, you will still be left with the vague fear that the answer is not really the answer. Or the best answer, anyway. Just the one someone paid Altman to make sure you see.
And it matters because with Google, you got a whole array of answers. It was giving you options, not certainty and you quickly figured out that you could skip the paid responses at the top.
Chat though, is only giving you one answer. Which it will, in its way, deliver with a heroic degree of certainty as that is its stock in trade, to save you time and effort by finding the one true thing and explaining it to you.
Only the deal is that you have to believe that the answer is the best one period. Not the best one someone paid for.
This shift to advertising also raises the issue of privacy.
People confide in ChatGPT in a way they don’t with any other app, certainly not Google.
So what, they may ask, is to prevent Open AI from selling—in a completely anonymized and privacy compliant manner—the data from their conversation about BDSM to Meta, so that ads for leather harnesses start to appear in their Instagram feeds.
Or, to use a less salacious example, ads from divorce lawyers if they ask about property division laws in their state.
So there’s that too and it’s no small thing, given how much people confide in “Chat.”
The final piece, the piece we don’t know yet, is will there be a 15 Million Merits version of the app?
15 Million Merits, of course, being the second episode of the first season of Black Mirror, set in a world where every surface turned into a screen showing YouTube-level ads and the only way to avoid them was to pay—”merits” being the currency of the realm.
We’ve been using the word to describe that 10%-15% of the population, primarily affluent, educated professionals, who pay for the ad-free version of every streaming app they subscribe to, have multiple ad blockers on their laptops, and who only see ads during live sporting events.
So a long way of wondering whether there would be an ad-free version of the app, and, if there was, what would adoption look like and how many people would pay for it?
It’s hard to know.
What You Need To Do About It
If you are Sam Altman, first off, lay off social media. If you had stopped at “I saw the ad and it made me laugh” you would have done well.
But that long defensive screed?
Ouch.
Now for the more practical stuff: if you are going to do this—and I guess someone has to go first since everyone else is likely planning something similar—remember that all the well-meaning words in the world aren’t going to allay people’s fears. They’re going to have to actually see and touch and play with the product.
Make them understand why they might want ads.
Which is no small feat.
Instagram seems to have managed it—I suspect for many, if not most people, the ads are far more interesting than yet another photo of your friend’s avocado toast or yet another marginally talented comedian’s reel.
But Instagram is what our boy Marshall would have called a “hot medium” — you just kind of sit back and let it wash over you.
Whereas ChatGPT is this-winter-on-the-East-Coast level cool—you interact with it constantly, no leaning back and letting it drive.
So that’s an issue and you’re going to have to solve it.
In the interim, no more X.
And please do offer an ad-free version. Many of us will gladly pay for it (provided it is reasonably priced) and while it does create a haves-and-have-nots kind of situation, you’re in a market where the people who don’t want ads can just use Claude or Gemini which I assure you many of them will if you don’t provide an ad-free option.
If you’re the television industry, your ad product is looking a whole lot better, surrounded as it is by lean-back premium content for products that are not fakes or frauds, the commercials not well-done deep fakes.
It’s an advantage advertisers will actually appreciate.
Even if you never do get your act together around measurement and keep waiting for some mythical deity to rise up from the pumpkin patch and tell you what a view is.
Carpe diem.
2. Cousin Greg Was Onto Something
If you recall, at the beginning of the HBO series Succession, the erstwhile Cousin Greg is working as a character at one of the mythical Roy family’s theme parks, thinking that it’s a good way to break into the family business.
Turns out he was correct, given that the series ends with his sometime ally Tom Wambsgans, another former Parks and Cruise line employee, installed as CEO.
It’s a somewhat prophetic plot twist too, given that this week Disney announced that their new CEO would be Josh D’Amaro, a former finance guy who (wait for it) spent years working his way up the Parks and Cruises division.
Why It Matters
Disney Watchers are pretty sure this indicates that the company has realized its future does not lie in TV.
Not that it’s giving up on it, mind you, just that they’ve realized that they are better off at creating valuable IP that can be monetized as live experiences than they are at creating streaming services that live in the same universe as Netflix and YouTube.
It makes sense: the parks and cruises division has long been their most profitable division and it’s the one area where they completely dominate all the other players: Disneyland pretty much has no actual rivals.
It is an incredibly well-run entity, at least from a guest perspective. I often remember thinking that if major cities let Disney run their public transportation, streets and highways, they’d increase efficiency tenfold.
If there is a cloud on the theme park horizon, it’s that, like everything else in America, it’s very much become a two-tier system, where the top 15 percent of the population can buy Fast Passes and special experiences to ensure they avoid the hoi polloi, who are still paying exorbitant prices in order to wait in endless lines.
Where for some families it’s a once-in-a-lifetime vacation, whereas for others it’s just what they do on Spring Break.
That’s an asterisk though, not a deal breaker—at least not in 2020s America.
But it is something to be aware of at a time when Feudal Media puts Disney’s core audience into separate and increasingly disconnected bubbles.
What You Need To Do About It
If you are Netflix and/or HBO, this is good news, it means you’ve kind of won. Or at least that Disney has no plans to launch an all-out offensive.
They’ve got ESPN and Hulu and the Disney Channel and for now that will both generate ample profits and let them promote their IP.
ESPN in particular will prove quite valuable as sports are the only way to reach mass audiences these days and because ESPN already has a history of promoting niche sports, should one or more of them become popular with Zoomers.
If you are D’Amaro, Iger has left you in very good shape.
Your TV properties have their loyal fans, they are not going to overtake Netflix or YouTube or even HBO.
But the thing is—they don’t have to.
They just need to be a place where kids can watch The Lion King over and over and over and over again and where shows based on your massive IP empire can continue to cater to their audiences under the Disney umbrella… all while working on driving attendance in the parks and on the cruises.
Given AI and tech and all that, I am sure there are many amazing, dare I say magical, things you will be able to do with those parks and those cruises.
Trust your Imagineers, remember Walt’s dedication to detail and not letting good be the enemy of great and you’ll do just fine.
I mean you work at a place where dreams really do come true, right?
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.