Navigating the Evolving Landscape of Entertainment and Media: Challenges and Opportunities

In this two-part series, the digital counselling team at Van Bael & Bellis explores the major challenges impacting the entertainment and media industry, offering insights on how businesses can navigate these complex changes.

 

Generative AI and Human Authorship

With the rise of generative AI, the entertainment industry is entering uncharted territory, where the definition of creativity and authorship is rapidly evolving. Tools like OpenAI's Sora and Google’s MusicLM allow content creators to generate music and imagery from simple text inputs, making the creative process faster and more accessible. However, these developments raise pressing questions about intellectual property. International copyright law, particularly in the EU and the US, largely maintains that true authorship must be human. Case law emphasizes that creativity should reflect the author’s personal intellectual input—an element that AI lacks.

 

As generative AI becomes more prevalent, the debate over human contributions to AI-created content will intensify. Questions of ownership and copyright protection will redefine the industry, challenging longstanding practices and protections for creative professionals.

 

Regulating Market Power

The introduction of new regulations such as the EU’s Digital Services Act (DSA) and Digital Markets Act (DMA), along with the UK’s Online Safety Act (OSA), has placed increasing responsibilities on businesses operating in the digital sphere. These laws are reshaping the competitive landscape, offering more opportunities for challengers to established incumbents.

 

For instance, Epic Games credited the DMA with allowing it to open its own store for iPhone apps in the EU, while Spotify welcomed Apple’s revised terms for music-streaming apps. The regulatory framework is shifting, creating more transparency for consumers but also increasing the risks for companies failing to adapt.

 

A case in point is Ticketmaster’s use of dynamic pricing, a practice that adjusts ticket prices based on demand. While legal, dynamic pricing has drawn significant scrutiny, leading to investigations by UK regulators over whether such practices violate consumer protection laws.

 

Media Mergers and Consolidation

The entertainment industry has seen a surge in high-profile mergers, reshaping the sector. Recent deals such as the $8 billion Skydance Media and Paramount Global merger exemplify the trend toward consolidation in Hollywood. However, these deals are facing mounting antitrust scrutiny.

 

Regulators like the US Department of Justice (DOJ) and the UK’s Competition and Markets Authority (CMA) are paying closer attention to these mergers, assessing their potential impact on competition, innovation, and consumer choice. The CMA’s 2023 decision to block Microsoft’s $68.7 billion acquisition of Activision is a prime example of how regulatory concerns can halt even the biggest industry deals.

 

AI, Content Commercialization, and Data Protection

As media companies enter into licensing agreements with AI developers like OpenAI, legal and ethical concerns are emerging. Licensing deals with news publishers like the Financial Times, News Corp, and Conde Nast highlight the intersection between AI and content commercialization. However, concerns about data protection and intellectual property are growing.

 

In the EU, the Irish Data Protection Commission has taken legal action against X (formerly Twitter) for unauthorized use of personal data in training its AI. The case raises questions about the legal basis for using such data and whether the "right to be forgotten" applies to AI systems.

 

Online Safety and Content Moderation

The UK’s Online Safety Act (OSA) and the EU’s DSA impose new obligations on media companies, particularly those that allow user-generated content. The OSA gives regulators the power to enforce content moderation standards, with fines of up to 10% of annual global turnover for violations. Media businesses, particularly those in gaming and social media, must ensure that their platforms comply with new content regulations to avoid legal repercussions.

 

In the gaming industry, user-generated content and multiplayer features could fall under the OSA's broad definitions, subjecting them to stricter scrutiny. Similarly, the DSA in the EU has introduced stringent requirements for addressing illegal content, placing added responsibility on content producers and online platforms.

 

Key Takeaways

As the digital landscape continues to evolve, the entertainment and media industry faces an increasingly complex regulatory environment. Businesses will need to carefully assess their practices, from copyright and AI-generated content to compliance with new regulations, to stay ahead of legal challenges. Navigating these changes successfully will require strategic foresight, robust data protection policies, and a deep understanding of emerging legal frameworks.

 

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