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Is the stock market in the grip of an AI bubble? Will consumer spending collapse under the weight of inflation fueled by rising energy prices? Can Disney, Netflix and other entertainment giants build out their streaming
platforms beyond video to boost profits and margins?
There’s no shortage of business trends coalescing around media and entertainment as its industry leaders converge Sept. 17 in Los Angeles for Variety’s annual Entertainment and Technology Summit, presented by EY.
Hollywood is grappling yet again with a fresh cycle of technology-driven upheaval in its operations and business models. The dawning potential of generative AI promises to radically change how movies and TV shows are made. And the distribution systems of tomorrow are not as lucrative as the pay-TV ecosystems of the previous half-century.
Javi Borges, global Americas media and entertainment sector leader for accounting and consulting giant EY, asserts that entertainment companies need to also understand the sea change that is afoot in consumer tastes for leisure-time pursuits.
“We’re seeing a shift from event-driven experiences to connected community experiences. The consumer is the fan. You want to shift from having consumers to having fans and loyal supporters that interact with your product, with your experience on an ongoing basis,” says Borges, a 27-year veteran of EY. “That’s why you see the prioritization of sports in some of the media rights negotiations and in the valuations that we’re seeing in the market. It’s because of the stickiness of the fan.”
The AI effect on the stock market has cast a big shadow over media and tech shares. Borges sees a bumpy period of adjustment in the short term as the industry sorts out processes to ensure that human creatives still oversee the work of AI’s crafty agents.
“The unique aspect about AI is the speed of change that we’re seeing is unprecedented. With technology, the time frame between major breakthroughs gets shorter and the change gets faster,” Borges says. “The speed of change and the speed of evolution around it, that’s what drives a lot of nervousness.”
But the potential for AI to boost the productivity of the humans that use AI tools can’t be denied.
“We think that AI is an opportunity to really have people do more and we think that there’s going to be economic growth because of it,” Borges says. “The right governance needs to be put in place. But I think it democratizes the cost of filmmaking.”
One concerning macroeconomic trend on the horizon that could impact the entertainment sector even more than AI in the near term is the pressure on consumer prices. The war in Iran and the ripple effects of on-again, off-again tariffs and related supply chain disruptions are seen at the supermarket and the gas pump and everywhere else consumers feel the sting of rising prices. Layoffs in key sectors such as tech, banking and entertainment have also put pressure on pocketbooks. The wobbliness of consumer spending coupled with a steady decline in the rate of personal savings held by the average American has raised red flags for entertainment sector economists.
“The U.S. media & entertainment business is consumer-centric, and changes in the health of the American consumer directly impacts the companies playing in this space,” wrote Robert Fishman, media and entertainment analyst for MoffettNathanson Research, in a July report. “Today, elevated fuel costs, persistent core inflation above the Fed target and a depleting savings buffer should all serve as warning flags for consumer spending.”
Strong consumer spending is crucial for the latest strategic wave around subscription video that Disney, NBCUniversal and others are embracing. Both companies have articulated a vision for Disney+ and Peacock, respectively, to grow beyond video subscriptions to serve as a funnel for attracting consumers with theme parks and opportunities for experiences. The idea is to thread other Disney and NBCUniversal products and services into the streaming platforms, making them a hub of companywide activity.
Disney plans to roll out elements of what CEO Josh D’Amaro called “this expanded ecosystem” to its 131 million Disney+ subscribers worldwide by next spring, as the exec told Wall Street analysts in August.
“As we look to make Disney+ the digital centerpiece of our relationships with fans, we’re just playing a different game” from other rivals, D’Amaro said in outlining his vision for Disney+.
EY’s Borges sees the initiative at Disney and elsewhere as indicative of the importance of keeping connected with fans and bringing them one-of-a-kind experiences or can’t-miss movies and TV shows that help keep them loyal to their favorite brands.
“We’re really in a period where there is immense value in having a streaming platform, and it’s being manifested in different ways. The common thread that you see is the extension of the IP into a connected experience,” Borges says. “So whether that’s in a community setting or cross- leveraging audiences like Netflix running the ‘GTA 6’ preview, you’re seeing that kind of connectivity. I think where things are headed for entertainment is going to revolve and two things: The continued extension of IP and the connectivity to the community around the product.”
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Bellwethers of the Business
Five market-pacing companies to watch as 2026 winds down
Netflix
Stock performance year to date: down 19%
The streaming leader faces investors questions about long-term growth drivers after the aborted M&A effort earlier this year with Warner Bros. Discovery. Netflix is counting on subscriber gains from outside the U.S., plus a larger menu of sports and live events to drive big advertising sales.
Disney
Stock performance year to date: down 6%
The Mouse House needs consumer spending to stay strong to keep its parks, cruises and experiences operations humming. New CEO Josh D’Amaro is touting the cross-platform marketing benefits of threading more Disney priorities into the Disney+ ecosystem.
Canal+
Stock performance year to date: down 5%
France’s biggest pay-TV company is becoming a proxy stock for Europe’s growing swagger across the global media marketplace. Canal+ is investing big in original French film production in exchange for favorable home-field advantage rules around exhibition in theaters and on streaming.
Comcast
Stock performance year to date: down 15%
The Philadelphia-based media giant is on track to split its cable and broadband assets and NBCUniversal into separate companies by mid-2027. After more than 15 years together, the shift will put pressure on the studio, NBC and Peacock to perform in the eyes of investors.
Nvidia
Stock performance year to date: up 15%
If AI catches a cold, Nvidia gets pneumonia. The chipmaker’s stock will reflect any softening of demand or enthusiasm for the AI revolution that has fueled the vast majority of U.S. equity gains in recent quarters.
(Source: Variety research. Year-to-date: Jan. 2-Sept. 16)
