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      Media businesses and the wider Technology, Media and Telecoms (TMT) industry are being reshaped by the rapid rise of AI. This is transforming every corner of the industry – creators, distributors, audiences – with complex overlaps and interplays between them. The industry thrives on creativity and innovation, and there is enormous potential for this to be supercharged through AI – even if significant questions arise over issues such as content ownership, copyright and use of data.

      To make sense of it all, we brought together a panel of KPMG experts to explore how media can leverage AI for creativity and growth while navigating the risks.

      Fundamental shifts

      We started with a quick review of news headlines from just the previous few weeks – which in themselves demonstrate the speed of change and the turbulence AI is creating. All media businesses will get caught up in this and need to act. Headlines included:

      Nat Gross
      Nat Gross

      Partner and Head of KPMG Media Practice

      KPMG in the UK

      Alongside this, we are seeing huge shifts in how consumers behave. Search is a big arena of battle, with traditional SEO being increasingly challenged by generative AI. Research has shown that 61% of Gen Z and 53% of Millennials use gen AI for search. Traffic to ChatGPT has already overtaken Bing (500+ million monthly unique visits). These aren’t just statistics - they signal a major interface shift in how people access and interact with content. Traditional search engines are being disrupted by AI-powered tools that respond to intent, not just keywords. This shift is reshaping how audiences discover content and how media is monetised. This poses fundamental questions for search models, including how the content on websites is optimised to feature in AI-led search.

      Meanwhile, AI is already moving beyond the foundational layer of content generation and summarisation, with agentic AI on the rise – smart agents that perform specific tasks and manage processes on their own whereas gen AI mainly produces content based on prompts. Add to this the already-established migration of huge numbers of consumers to social media platforms like TikTok as their main source for news, and the industry is truly in a state of massive disruption and change.

      Three key AI trends for media

      • AI is revolutionising content production

        Paul Henninger, Head of Technology & Data at KPMG UK, noted that AI is having an enormous impact on the means of production of content, and the speed at which it can be produced. It’s not about replacing human creativity - it’s about augmenting it, expanding capacity, and enabling faster innovation cycles. However, it can be contentious – with the News Media Alliance, for example, describing AI tools as controversial, particularly how tech companies can use publishers’ content. This is challenging IP rights and monetisation models.

      • Operational costs are dropping

        AI is also bringing down the cost of production and back-office areas like Finance and administration. Resulting productivity improvements lead to cost savings, creating operational excellence that can be deployed back into content.

         

        “This creates more capacity for news for example,” Paul said. “It allows the front of the house to do more. It could also allow smaller players in the industry to punch above their weight,” Paul said.

      • Audience behaviour is evolving fast

        “We’re going to see an increasingly agentic approach to browsing and selecting content to read or watch. The way that audiences ‘show up’ will change rapidly in terms of how they show intent or interest. Media businesses therefore need to understand how this might develop and the implications for their business models.

         

        One question to ask might include: How would you build your website today if the primary consumer of it was AI? That creates some fascinating avenues of discussion,” Paul added.

      M&A and investment hotbed

      If a recurring theme of our discussion was the sheer pace and volume of change through AI, another was the size of investments being made. Mark Allcroft, Head of Deal Advisory for TMT at KPMG UK, highlighted that a massive $250bn has already been invested in AI-related technologies and businesses by corporates and private equity in the last few years.

      The ‘hyperscalers’ – such as Meta, Alphabet and Apple – are generating close to $350bn of operating cashflows from AI-related areas, while a raft of start-ups and scale-ups are making waves. For example, Synthesia is a UK unicorn already valued at around £2bn that turns text into video using hyper-realistic avatars – in minutes. This has big applications across the corporate world, for example the ability to produce enterprise-wide training content in multiple languages in no time at all.

      AI holds no borders, it’s truly global and there is the opportunity to generate huge returns from it. The question for media businesses is: what’s your strategy for this? Buy, build or partner?

      Mark Allcroft,

      Head of Deal Advisory for TMT at KPMG UK

      Businesses should be leaning in, exploring what’s out there, talking to the disruptors. We may see the ‘hyperscalers’ buying many of the most successful start-ups and scale-ups, and we may see some consolidation. We will probably see quite a few failures – but also the emergence of a few real winners.

      The importance of governance and regulation

      However, amidst all the excitement, is there an elephant in the room? What about regulation, governance, trust, privacy, ethics? These are all critically important elements and it’s essential that any business advancing in AI has clear guardrails and protocols to guide it.

      Much of this needs to come from regulation and legal frameworks – but as James Cassidy, Director in Data & Digital at KPMG UK Law, observed: “The reality is that the law can’t keep up.”

      That said, much is afoot including:

      • The EU’s AI Act which will come fully into effect this year.
      • The UK taking a more flexible approach and looking to existing regulators to collaborate and regulate AI-related questions and issues within their respective spheres.
      • A consultation ongoing about the big, complex issue of copyright – with the government wanting to balance the protection of content creators and owners with the need to support innovation.

      James had several clear actions for businesses:

      check_box

      Assigning roles and responsibilities around AI is key and this includes recognising it as bringing Board-level obligations given its relevance to issues like privacy.

      map

      Map where AI is being used in your business - there will probably be far more instances of it than you think - because the more you map it, the more you can understand where the risks are and look at ways of mitigating them.

      add_moderator

      Remember that there is a strong overlap between AI and privacy - when developing AI, you still must comply with data protection laws. You are still the data controller, and responsible for the data, as per the UK’s GDPR.

      Time to act

      The discussion brought out the seismic changes we are living through. Exciting opportunities lie ahead, as well as some risks. Businesses need to develop clear, coherent frameworks for the trusted development and adoption of AI at all the different altitudes of the enterprise – from the boardroom down to operations.

      This is a moment of inflection. Paul Henninger estimated a window of between 18 months and three years for media businesses to adapt and fully integrate AI before it is ‘too late’. Search and content optimisation is a prime example – with AI beginning to change the game to service specific consumer intent, how can media businesses plug into this and thrive? Accelerating on the journey is becoming mission critical. Delaying action risks being left behind as the industry transforms at speed.

      With so much to consider, we’ll be exploring key issues in more depth in an ongoing series of webinars and content on the future of media and how your company can navigate through the transforming landscape. This first session served as an introduction - future sessions will deep-dive into specific areas such as monetisation, regulation, and audience engagement.

      Register your interest here

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