Article written by Rhys Hancock, external consultant @ Bertelsmann AI Hub.

Introduction: An Industry Facing the Consequences of Its Own Disruption

Content London 2025 made one thing unavoidable: the industry is now living inside the disruption it once believed it could manage. Every conversation returned to the same forces: shifting audiences, the rise of YouTube, new formats including microdramas and the rise of AI. The mood moved between excitement and unease. YouTube’s rise as a commissioning ecosystem, the acceleration of AI-enabled workflows and the emergence of formats like microdramas created genuine optimism. They also exposed the reality that the tools which promise growth are the same ones unsettling long-standing models.

What became clear was a growing acceptance that audiences now live on platforms that still feel unfamiliar to many traditional players. The next generation of IP will be created with techniques and business models that look very different from the past. Some discussions were still catching up with where the market already is, particularly around AI literacy and digital-first development. Even so, the larger sentiment was unmistakable: the scale of the change ahead is no longer in doubt.

Shifting Audiences: From a Single Mainstream to a Constellation of Communities

Although AI dominated much of the agenda, the deeper force reshaping the industry is the shift in behaviour that began long before large language models entered the scene. User-generated ecosystems such as YouTube, TikTok and Instagram have redrawn the map of entertainment consumption. There is no longer a single mainstream. Instead, tailored communities form around pockets of fandom, identity and shared taste. For producers, studios and broadcasters, the challenge is no longer how to reach one audience. The challenge is how to reach many audiences, each with their own culture, tempo and expectations.

A second transformation is emerging in parallel. As AI systems start mediating decisions for users, the web is likely to fragment into three layers: the human web, where people seek intentional and premium experiences; the agent web, where AI curates and negotiates; and the bot web, where automated impressions and synthetic content dominate. Just as the industry begins to adjust to disruption from creator platforms, a larger wave of change is forming behind it.

The question is no longer whether these forces will reshape the landscape. They already have. The real challenge is navigating them at the same time: fragmented demand, algorithmic distribution, creator-led ecosystems and the rise of AI intermediaries. The companies that succeed will be the ones that treat audiences as a constellation of communities that need to be understood, engaged and served on their own terms.

YouTube and Branded Entertainment: From Sidecar to Power Centre

One of the clearest shifts at the conference was the growing acknowledgement that YouTube is no longer a promotional afterthought. It has become a primary entertainment ecosystem. It does not funnel viewers into television. It builds entire franchises on its own terms. Succeeding here requires a new skillset: a clear editorial identity, consistent output, fluency in creator culture and production workflows designed for constant distribution rather than seasonal cycles. It also requires humility because success depends on an environment where algorithmic changes and advertising conditions can alter outcomes overnight.

Creator-led distribution reinforced this reality. Major brands increasingly design key moments through creators rather than through broadcasters because creators bring trust and ready-made communities. Melanie Fletcher, CEO of Done and Dusted, illustrated this with the reinvention of the Victoria’s Secret show. The project was rebuilt entirely through YouTube and creator channels without a single broadcast partnership. Moves like this are helping turn branded entertainment into a parallel commissioning economy. Brands now want cultural presence rather than interruption, and producers who understand audience behaviour and commercial outcomes are well placed to access these budgets. Working with brands requires adaptation, but the opportunity is clear.

Research group Omidia also offered a note of caution. YouTube should not be romanticised. The idea that anyone can break out hides the reality that only a small minority achieve sustained scale. The platform rewards strategy, operational discipline and a clear point of view. It does not reward blind hope. YouTube may now be the centre of global attention, but it demands the same rigour as any major entertainment platform.

Microdramas: The Lab for the Next Generation of Storytelling

Vertical, mobile-first drama, often described as microdrama, became one of the most discussed but least understood formats. These are not miniature television episodes. They resemble mobile games more than traditional TV. They offer immediate onboarding, rapid emotional payoffs and constant iteration based on data. The audience is sharply defined. It is primarily women aged 25 to 55 in North America. Success is measured by retention curves, repeatability and conversion rather than prestige. Early signs suggest that the sector is expanding faster than FAST channels.

Two creative traditions are emerging. One draws from high-volume Asian online fiction, prioritising speed and functional storytelling. The other, still developing in Western markets, places more weight on writing, world-building and performance while still operating with the urgency the format demands. Vertical framing fundamentally changes the craft. Actors must land emotional beats instantly. Performers who excel in this rhythm are already becoming more expensive.

Budgets tend to fall between $150,000 and $200,000 per title. However, user acquisition determines everything. Campaigns scale aggressively or collapse instantly. There is no slow build. AI-enabled studios such as the FOX-backed Holywater are now using real-time data to adjust pacing, character arcs and story direction. This approach borrows optimisation techniques from mobile gaming and free-to-play design.

Strategically, the space remains wide open. Microdramas could become an IP incubator, a platform-led business or a high-volume service model. There is a risk that it becomes a casino-like economy dictated by platform mechanics and creative luck. However, the relatively low-cost base makes experimentation viable. The workflows being developed here are likely to influence the broader micro-content sector for years to come and as a result are worth the investment.

AI: Moving Beyond Hype Toward Practical Literacy

The AI track revealed a gap between enthusiasm and practical understanding. Many delegates arrived looking for clarity about where AI fits into production, how it can be used safely and where human creative judgment must remain central. Instead, much of the discussion circled familiar debates about ethics, democratisation and the fear that breaking old gatekeeping structures might undermine the value of creative labour. For those following AI closely, the sessions rarely advanced the conversation. Even so, a few concrete examples demonstrated the reality of AI adoption.

In Ireland, Virgin Media Television has integrated AI into research, planning and basic editing for its daily Ireland AM magazine programme. The goal was not automation for its own sake. It was a healthier production rhythm. The team now produces multi-hour shows seven days a week without the burnout that previously defined the workflow. This is AI at its most pragmatic and effective.

Hat Trick Productions provided another compelling case. Working with AI animation studios, they produced a run of experimental comedy shorts for roughly  £9,000 per episode. This is a fraction of the cost of traditional animation. Crucially, the savings did not replace human talent. Writers and performers remained central to the creative process, while AI handled the labour-intensive visual work. Rather than replacing people, AI helped to unlock new growth opportunities on digital platforms.

These examples pointed toward the conversation the industry needs. The real question is not whether AI is a threat or a saviour. The real question is how it can expand capacity, unlock new formats and enable creative work that was previously too slow or too expensive. Once grounded in real workflows, AI stops feeling abstract and begins to function as part of the fabric of modern production.

Conclusion: A Smaller Market and a Sharper Reality

The conference made it clear that the industry has entered a smaller but more focused phase. The organisations that succeed will be the ones that define their audience, format, platform and workflow with precision. They will recognise that they are operating inside a platform economy that will accelerate as AI becomes embedded across creation, distribution and discovery. Flexibility around IP, business models and creative processes will be essential.

One important point was not explored deeply enough. The playing field is no longer set by traditional media companies. It is set by global technology giants who control the distribution systems, the creative tools and the algorithms and agents that mediate access to audiences. If the industry does not push back against these dynamics, or hesitates to embrace the opportunities that AI provides, it risks outsourcing innovation and losing further leverage.

The coming years are likely to be shaped as much by strategic positioning as by creative output. Organisations that are willing to explore new workflows, adapt to evolving platforms and clarify their role within the broader ecosystem will be better placed to navigate ongoing change. Those that move more cautiously may find the pace of transformation challenging, underscoring the importance of thoughtful, deliberate adaptation.

About the Author

Rhys Hancock is a Strategy and UK Ecosystem Consultant supporting the Bertelsmann AI Hub since 2024, working on AI and future-of-media initiatives and building partnerships across the UK ecosystem, including media companies, large technology firms and AI startups.

Image courtesy of https://www.contentevents.net/.