1.Warner/Paramount Hits Another Speed Bump
Just when it looked like the Paramount-Warner deal might have encountered some smooth sailing comes word that a passel of state attorneys general have filed a lawsuit alleging that the deal would cause unfair competition in the movie and cable industries, hastening their demise and otherwise wreaking havoc.
Okay, so maybe it didn’t actually say “hastening their demise” but everyone knew that’s what they meant.
The movie industry never fully recovered from the pandemic, it’s looking to horror movies from YouTube creators to save it from irrelevance at a time when the Oscar nominations are largely met with “who?” and “what?” reactions from most viewers.
And cable, well, everyone knows that cable is dying, right? I mean we all read The Gauge.
Fortunately, or unfortunately, depending on your POV, the legal system does not work that way and both industries are vibrant enough to warrant protection.
Are they growing? No.
But they are not falling off a cliff either. As I have noted previously in this column, their collapse is more akin to a slow-leaking balloon and thus they have many more years of life left to them.
Why It Matters
The AGs are seeking an injunction that would delay the deal.
Which matters because according to the terms of the deal, Paramount stands to lose around $7 million for every day the deal is delayed past September 30th. Which, I will note, is not all that far away.
Worse still, if the deal falls apart, Paramount would owe Warner an additional $7 billion, an amount it would, to be fair, take Warner quite some time and effort to actually collect, the legal system being what it is.
So there’s that and there’s the general uncertainty at both companies as they wait to see if the deal will indeed go through and what it will ultimately mean for everyone, given the high probability of layoffs-due-to-overlap after a merger.
And if all that wasn’t enough fun, Brendan Carr, the Trump-appointed FCC czar, is not very happy about all this, calling the lawsuit “illegitimate” and otherwise seeming overly vexed.
Which is worth a bucket of warm spit in this case—the FCC has no standing in the AG’s case and Carr’s reaction seems directed at the perennial Audience of One at Mar a Lago, Who, conspiracy theorists are convinced, put his finger on the scale for this deal because the Ellison’s promised to do away with CNN. Or at least the anchors and reporters he most objected to at CNN.
Said conspiracy being boosted though by another rumor, this one reported by Matt Belloni at Puck, that Rob Bonta, the California AG, was willing to let the deal go if Paramount would agree to sell off CNN.
Something Bonta denies ever saying, but it does feed into the belief that ha-Ellisonim were only doing Trump’s bidding on the increasingly irrelevant international news network.
So there’s that too and then there are the objections from across the pond, both from the UK, where Culture Secretary Lisa Nandy is making noise about issuing a public-interest intervention notice and from Brussels, where the European Commission is set to issue its own ruling later this month.
What You Need To Do About It
If you’re the media industry, sit tight. This is not getting resolved any time soon. And even if it does, the truth is it will impact that portion of the industry that is slowly dying, not that portion which is poised for growth.
If you work at Paramount or WBD, that’s small consolation though for months of uncertainty and trying to sell things to clients who are aware that what they’re buying may no longer exist in just a few months. If you’re feeling good about the potential merger, then just sit tight.
If not, keep looking. It’s not fun and you have my sympathies, but that’s really your best option right now.
If you are one of the other streaming companies, remember that this is a mild distraction, that whether or not the merger goes through, your main competition is still YouTube and Amazon and Apple. Not a combined Paramount-WBD.
If you’re everyone else, remember that this series will have several seasons to it and lots of twists and turns along the way.
In other words, good old fashioned entertainment.
2. OpenAI’s Great Big Update Fail
I suspect that if you asked ChatGPT whether it was a good idea to update the desktop app so that coding functions like Codex were front and center and the “chats” that most people used the app for (“can you proofread this email” “how many minutes does a hard-boiled egg take to cook”) were relegated to a sub-screen multiple clicks in, it would have explained, in that semi-condescending way it has, that this was not, in fact, a good idea and would likely serve to alienate a goodly portion of the user base.
Unfortunately, TPTB at OpenAI did not make use of ChatGPT and thus the rollout of the new app happened as described above, only worse.
The old app, the one that “normie” users had come to rely on, was deleted during the installation of the new one and the new app patiently explained that you were just SOL.
(Fortunately some Reddit users realized that the old app had just gotten moved to Trash and could be dragged out and reinstalled.)
There was, as you might expect, more than a little outrage from users and a whole lot of people deciding that this was the time to decamp to Anthropic’s Claude.
All of which begs the question, WTF were they thinking?
Why It Matters
AI companies like OpenAI are going to be part of the media universe whether we like it or not, so it’s best to understand what they are up to and what makes them tick.
In this case, the kindest assumption is that OpenAI was looking at how Microsoft and Google were getting traction with enterprise (i.e., corporate) users via Copilot and Gemini and decided it wanted in.
Which is why the new app feels, to most users, like their five passenger sedan has been replaced by the Starship Enterprise.
The new app integrates with everything from Drive to Slack. Manages projects across multiple users. Has full access to your desktop.
But is hard pressed to help you understand the amount of time needed to cook an egg.
It was a baffling display of incompetence given that OpenAI’s own published research showed that most users were in fact of the boiled egg kind.
So it still boggles the mind that OpenAi did not just say “hey, if you have real enterprise needs, download our new app that helps you meet those needs.”
Or something that would not leave the majority of their user base feeling like the company had hung them out to dry.
Because rolling out two different apps or making the default view something you can choose in “Settings” is just not all that difficult.
A strong indication that they clearly do not have their massive non-tech customer base in mind.
Odder still when you realize that those customers are a much better fit for advertising than the tech bros.
Meaning that, unsurprisingly, engineers have a lot to learn about the behavior patterns of humans.
What You Need To Do About It
If you are a media company and you are starting to use a lot more AI, you need to always bear in mind that the people running these companies don’t have much intuition when it comes to the squishier parts of human nature.
So they don’t get why people grow attached to a thing. Or why the look and feel of something matters, so long as it works. And (especially) why simpler is better.
If you are OpenAI, you need to hire people who get people. Let them in on decision-making, especially around your consumer-facing products.
But more than anything, you need to take the OG desktop app, the one you’re now calling “ChatGPT Classic,” and put it someplace where people can easily download it.
That’s what we call a no-brainer.
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.