In an era of rapid technological advancements, legacy media companies are grappling with the challenge of staying relevant. CNBC recently interviewed Rich Greenfield from LightShed Partners to explore whether cloud computing and artificial intelligence (AI) can be the lifeline that these companies need or if such claims are merely optimistic rhetoric.

A Vision for the Future

David Ellison, a young media mogul and CEO of Skydance Media, believes that integrating cutting-edge technology is crucial for transforming legacy media. “He is in this for the next 30 or 40 years,” Greenfield noted. “This is not a quick fix. This is not an easy lift.” Ellison’s long-term vision contrasts sharply with the typically short-term focus of traditional media executives.

Ellison asserts that legacy media has largely failed to incorporate best-in-class technology across its operations. This failure isn’t limited to streaming services but spans the entire business model. “They are not tech, and they have not brought those disciplines together,” Greenfield emphasized. The crux of the issue lies in not just adopting technology but also creating a synergy between content production and technological innovation.

The Content Conundrum

For technology to make a significant impact, there must be substantial content to leverage it. “They have to make a ton of content, invest in a ton of content, and get people to watch it,” Greenfield explained. Paramount Plus serves as a stark example of this dilemma, as it currently struggles with low viewer engagement. The platform’s limited content slate, especially with the impending end of popular shows like Yellowstone, underscores the need for a significant increase in content production.

Greenfield suggests that success hinges on the ability to ramp up content creation dramatically while simultaneously boosting technology investments. “That will be the test: can they make a ton of content while also dramatically ramping the technology spend and make them work in harmony together?” he posed.

Navigating the Industry Decline

The broader context of the interview touched on the challenges facing the entire media sector. Companies like Disney and Warner Bros. Discovery are experiencing significant stock declines, reflecting the broader struggles of the industry. “There is no proof that anybody can figure out how to navigate the decline of linear television and the growth of streaming,” Greenfield remarked.

Digital-native companies like Netflix, Amazon, and YouTube are currently leading the streaming landscape, leaving traditional media companies scrambling to catch up. This stark reality underscores the difficulty of transitioning from a legacy model to one that fully embraces digital and technological advancements.

Incentives and Investments

Despite the challenges, there are substantial incentives for legacy media companies to innovate. Ellison and his partners at RedBird Capital have invested billions of their own money into transforming their media assets. “They have a significant option grant that comes to fruition. They are obviously heavily incentivized to make this work,” Greenfield noted.

This financial commitment indicates a serious effort to leverage technology for business transformation. However, the path to success remains uncertain and fraught with challenges.

Looking Ahead

The future of legacy media depends on its ability to adapt to a rapidly changing technological landscape. Integrating AI and cloud computing can potentially streamline operations, enhance content delivery, and improve viewer engagement. However, these technologies must be paired with a robust content strategy that meets the demands of modern audiences.

As Greenfield aptly summarized, “The real test will be whether legacy media can harmonize content production with technological investment and navigate the tumultuous transition from linear to digital platforms.”

The road ahead for legacy media is undeniably challenging, but with the right combination of innovation, investment, and strategic foresight, there remains a glimmer of hope for these storied institutions to not only survive but thrive in the digital age.