Insights

AI is fundamentally rewriting the established rules across content creation, distribution, and consumption. In this report, Samjong KPMG analyzes how AI is transforming a content industry once characterized by professional studios and a small group of creators, high barriers to entry, and capital- and technology-intensive production. Individual creators are emerging as major producers, while companies are rapidly strengthening production capabilities by internalizing AI through M&A and partnerships. As AI studio-style production platforms emerge, access to source and synthetic data has become a core competitive capability.

Distribution — algorithms replace the gatekeepers. A distribution structure once defined by gaps in global reach caused by language constraints and by the gatekeeping role of broadcasters, cinemas, and platforms is being reshaped. AI translation and localization are removing language barriers and widening global distribution, while platform AI algorithms take greater control of what reaches audiences. As AI chat interfaces emerge as a new distribution channel, content credibility and quality curation are becoming differentiators, and generative engine optimization, content structuring, and optimization for AI recommendations are emerging as new competitive priorities.

Consumption — viewers become prosumers. Passive, one-way consumption and fandom centered on a limited group of enthusiasts are giving way to a structure in which consumers participate as prosumers creating AI-powered UGC and fandom becomes increasingly organized and commercialized. AI-based UGC platforms and immersive content consumption through AI devices are expanding, while differentiated IP becomes essential to building fandom in an environment of content oversupply. The report therefore recommends three sets of survival and growth strategies for content companies. For production: internalize AI-based production by securing AI models and tools and integrating the full production process, while structuring content IP and turning it into data assets. For distribution: secure channels built around AI chat interfaces and connect with LLM platforms, optimize for GEO and AI recommendations, and build trusted content quality and safety capabilities. For consumption: expand participation through AI UGC ecosystems, develop fandom and community monetization models, create differentiated IP, and foster creator and influencer ecosystems.

Implications for M&A. First, as the report explicitly notes, content companies are internalizing AI primarily through M&A and partnerships rather than in-house development, making further acquisitions of technology companies in areas such as AI production tools, dubbing, and virtual studios likely. Second, as source and synthetic data and IP become central to competitiveness, producers that own IP and companies with data assets may face valuation reassessment and intensifying acquisition competition. Third, the commercialization of fandom is likely to catalyze cross-sector deal sourcing and equity partnerships between fan platforms, commerce companies, and content businesses.