Location: The Pierre: 2 East 61st Street at Fifth Avenue, New York, NY 10065
The 20th Anniversary Event Two Decades of Exceptional Evolution
Our 20th annual Media & Technology Conference was a preeminent, can’t-miss event for nearly 600 senior executives across the media, marketing, information and technology sectors.
The theme of the conference this year was Two Decades of Exceptional Evolution. Attendees heard intimate discussions from an array of world class leaders and executives who shared their experiences managing through today’s fast-paced and rapidly evolving landscape as well as their strategies for success in the year ahead.
New York, NY, February 6, 2024 – JEGI CLARITY, a preeminent M&A advisory firm for the global media, marketing, information and technology industries, headquartered in New York, NY and London, UK, is pleased to announce that Jon Thackeray has been promoted to Managing Director. Jon joined the firm four years ago and is based in the New York office. He advises clients on mergers, acquisitions, divestitures and capital raises across the media, entertainment, legal, GRC, marketing and technology-enabled services sectors and is instrumental in the firm’s coverage of financial sponsors. Jon has advised on a wide range of transactions across M&A, debt and equity capital markets and strategic advisory assignments, with a total deal value in excess of $20bn.
Prior to joining JEGI CLARITY, Jon was a Director with Citi’s Global Media and Communications investment banking team, where he worked for eight years. He began his career in public accounting at Deloitte, working for a variety of public and private clients.
Commenting on his promotion, Jon said, “I am very excited to continue working alongside our incredibly dedicated and talented senior leadership team. I am grateful to all of the wonderful JEGI CLARITY clients whom I have had the privilege of advising, and I look forward to continuing to build on that success, driving successful outcomes for all stakeholders through our sound advice and subject matter expertise within our core sectors.”
Wilma Jordan, Founder & CEO, North America of JEGI CLARITY, noted, “Jon is deep in his sectors and is tailor-made for this next step in his career…he knows the Financial Sponsor field well, and we believe will be very successful in making inroads across the board.”
Jon holds an MBA from the Leonard N. Stern School of Business at New York University, and both an MS in Accounting and a BS in Accounting and Finance from the Carroll School of Management at Boston College. He is a registered FINRA representative and a Certified Public Accountant.
As we embark on 2024, our global team offers their personal insights into the outlook for M&A and Private Equity across our sectors.
A view on North America by Wilma Jordan
From a North America market perspective, I am optimistic that M&A activity will increase in 2024. Three factors contribute to this outlook.
Firstly, the accumulated dry powder among private equity firms in the US has surged from $2.39tn to a record $2.59tn over the past 12 months and many private equity clients are actively speaking to us about how they can deploy this both in traditional processes, and more creatively. Expect to see funds focusing more than ever on carve-out opportunities and asset combinations where they can create opportunities to invest outside of banker-led processes.
Secondly, given the challenging M&A market over the last 12 months, many U.S. private equity firms have portfolio companies that have exceeded their optimal holding period. In other terms, companies lingering in private equity portfolios for more than 5 years will need to be sold, as the time value of money diminishes with each passing year and pressure grows from LPs to return funds.
Lastly, assuming that the Fed is on track to start lowering interest rates in 2024, the cost of capital will decline with these reduced rates and the markets are currently pricing in a reduction of 50 – 100bps. We expect this to motivate buyers to adopt a more assertive approach in acquisitions as well as give sellers the confidence they need to take their companies to market at attractive values.
The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally. We predict that European based private equity owned companies will increasingly look to the US for buyers and investors, both as tuck-ins to existing platforms or as potential platforms in their own right.
All these dynamics will make for a more stable M&A environment that will engender confidence for buyers and sellers.
The US economy has remained stronger than many European economies, and US strategic buyers remain focused on acquiring growth both domestically and internationally.
A view on the UK by Richard Vaughan
From a UK market perspective, I feel far more upbeat going into 2024 than I did going into 2023. While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.
Several of the key economic indicators look better than they have at any point in the last 12 months, with headline inflation down from over 10% to under 4% today and forecast to return to more “normal” levels by the end of the year. The markets are pricing in a reduction in interest rates of over 100bps and importantly consumer sentiment appears to have turned a corner as real income levels begin to improve.
This macro-sentiment reflects what we are hearing from companies across our sectors – 2023 was hard work for the majority and really a question of managing through, 2024 is about a return to growth.
From an M&A perspective we are seeing a growing pipeline of opportunities which should come to market during the year, across both private equity and founder owned businesses. Pitch activity was higher in Q4 than at any other point last year albeit in terms of timing, it feels like most businesses will be waiting to see how 2023 closed out, and what visibility looks like on 2024 before they push the button on going to market. Everyone is aware that 2024 won’t be 2021, the bar is higher and hence every transaction will get an increased level of scrutiny from buyers and investors alike, so vendors and their advisors will be keen to ensure that all boxes are ticked – financial, commercial, and strategic – in advance of engaging in a process.
Despite the challenges of the last 12 to 18 months, the UK digital economy and ecosystem is as strong and vital as ever – continuing to grow, innovate and evolve at an exciting pace and constantly creating new ideas and opportunities, which in turn should make for a return of a vibrant M&A market in due course.
While the outlook for the UK economy for 2024 is mixed, we are entering a period of greater certainty in the markets which, absent any new shocks, will drive opportunity for dealmakers.
A view on Private Equity by Marcus Anselm
2023 was clearly a challenging year for private equity across EMEA: a difficult economic environment combining high inflation, high interest rates and recessionary worries; broader macro concerns around geo-political instability and the impact of Gen AI; a dearth of top quartile assets choosing to come to market; and mis-matched buyer and seller price expectations. Given all this, it was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.
Looking into 2024, we’d certainly hope that private equity related M&A will pick up.
On the sell-side, buy-out groups globally have a record $2.8tn in unsold investments, and GPs are under increasing pressure to start returning a flow of capital to LPs, not least in the context of a tough fundraising environment. Funds need to find a way to start exiting old investments over 2024 and they will likely become more creative about how they do this where needed. We are increasingly hearing more about private equity funds being open to structured transactions including deferred components and reinvestments to get deals closed in a way that they would not have contemplated in 2021.
On the buy-side, while everyone has talked about dry-powder for years now, it remains incredibly relevant. European private equity firms are sitting on a record €350bn of cash reserves, and although some of this can and has been deployed into existing companies or through continuation funds, ultimately both LPs and GPs need to see this being invested into new platforms. The broader economic and M&A environment should help achieve this in 2024 – inflation has dropped sharply across the region, interest rates are expected to fall through 2024, recessionary concerns are easing at an IC level and buyer-seller pricing expectations are beginning to align.
Of course, timing on this is hard to call but we would hope that these factors will drive markedly higher private equity related M&A by the end of Q2.
It was no surprise that the number of European private equity deals across our sectors fell by 32% versus 2022, with the more leverage-reliant mid and upper market feeling the squeeze in particular.
A view on Venture Capital by San Datta
Many in the start-up and venture capital community will be glad to see the back of 2023.
While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year with founders and entrepreneurs needing to focus much more on scalability, unit economics, GTM efficiency and cash break-even vs. topline growth, with the difficult cost-restructuring decisions that often came along with this.
Similarly, many investors were left looking hard at their in-prices and capital structures vs current asset valuations.
Looking forward, it feels like 2024 is going to be a year of re-alignment.
From an operational perspective, a lot of the really hard work has been delivered so companies are better aligned for the current environment. That may not mean a return to the 2021 and 2022 growth rates, but it does mean much more achievable, capital efficient and sustainable growth through 2024 albeit at a slightly slower pace.
From an M&A perspective, we definitely expect an uptick in M&A across the VC market over 2024 for several reasons. Firstly, we are already seeing much closer alignment around pricing between buyers and sellers, and we expect that alignment to get closer over the coming months. Secondly, strategics are back at the table, particularly in North America, as public market tech valuations have continued to strengthen in recent months. And lastly, many founder and VC backed companies are now looking at being part of a larger strategic in a more positive way than they would have done a couple of years ago – there are potentially huge synergy opportunities for independent businesses with the right larger partner, and an increasing number of independents are keen to explore these.
While some companies across our sectors continued to deliver truly impressive growth and/or profitability, for many it was a hard year.
If you have any queries or would like to have an in depth discussion on this article or the broader market please Contact us.
Despite global dealmaking having seen a significant drop in 2023 amidst challenging market conditions, we continued to strengthen our position as the definitive independent M&A advisor in our sectors, with over 20 completed transactions in the last 12 months.
In the same period we saw an increase in the proportion of deals done with Corporate (20%) vs Private Equity (40%) and in particular PE-Backed Corporate (40%) saw a marked increase. This was largely driven by the challenging environment for PE investing last year with macro pressures as well as cost of debt all contributing.
Please contact us if you want to hear about any of these deals in greater detail.
AI-volution | The unfolding story Software Development
Authors: Jonathan Davis(Partner, EMEA), Kevin Moore (Managing Director, US), Daniel Hart (Vice President, EMEA)
In the ever-evolving landscape of technology, Artificial Intelligence (AI) has emerged as a transformative force, revolutionizing various industries. One of the most notable areas where AI is making a significant impact is software development. With the potential to enhance efficiency, elevate quality and drive innovation, AI is reshaping the way software is conceived, created, and deployed.
Key industry players are recognizing the immense potential of AI and are investing heavily to harness its capabilities.
Investment in AI by Industry Giants
The race to harness AI’s potential in software development is on and industry giants are leading the way. Accenture, a global consulting and professional services company, has unveiled plans to double its workforce of data and AI experts from 40,000 to 80,000. This expansion is backed by a $3 billion investment into its AI capabilities.
Infosys, a multinational corporation that provides IT services and consulting, has introduced Infosys Topaz, an AI-first suite of services, solutions, and platforms. By leveraging generative AI technologies, Topaz aims to transform the landscape of software development. Not to be left behind, Wipro has made a substantial $1 billion investment in digital transformation. Launching an AI-first innovation ecosystem, Wipro has set its sights on training 250,000 employees in AI.
These investments underscore the industry’s recognition of AI’s potential and the commitment to staying at the forefront of technological advancement.
The gradual platformization of AI is very interesting to me. The efforts by Google, Amazon, Salesforce — they’re bringing AI down to a level of not needing to be an expert to use it. … I think the day that any good software engineer can program AI will be the day it really proliferates.”
Kai-Fu Lee, Sinovation Ventures
Key themes that are reshaping the industry
Automating tasks for enhanced productivity – AI is taking over the mundane and repetitive tasks that have long been a part of software development. The process of code generation, testing and deployment can now be automated, allowing developers to focus on more creative and strategic endeavors. Not only does this streamline the development process, but it also translates to reduced costs, improved software quality with fewer bugs and enhanced security. This will result in faster delivery times and more efficient allocation of resources.
Elevating software quality with AI – Buggy software can lead to disastrous outcomes, both in terms of user experience and reputation. AI has the capability to identify and rectify bugs, ensuring a higher quality end product. Moreover, AI can make recommendations for better coding practices, optimizing the software’s performance.
This not only reduces the risk of software failures but also enhances the user experience. The lowered barriers for new developers to enter the market will also benefit small and medium-sized enterprises (SMEs), expanding opportunities for growth and further democratizing the use of AI in software development.
Personalized user experience through AI – Gone are the days of one-size-fits-all software. AI empowers developers to personalize software for individual users. By analyzing vast data sets, including user preferences and behaviors, AI can recommend features, functionalities and even tailor the user interface. This results in an improved user experience and leveled playing field to deliver bespoke software solutions.
Predictive insights for informed development – AI’s predictive capabilities are invaluable for software developers. By analyzing trends and forecasting future developments, developers can incorporate AI assisted predictive logic into code to help make informed decisions and plan ahead. This not only enhances the return on investment but also mitigates the risk of obsolescence. Software projects can adapt and evolve in tandem with technological shifts, ensuring long-term relevance.
Multimodal methods: bridging the gap – The industry is witnessing a shift toward multimodal technologies that enable software development based on visual representations like drawings or wireframe blueprints, rather than solely relying on text and language-based interfaces. This innovation, with an increasing assist from AI tools, opens new doors for less technically skilled teams, fostering greater collaboration between various stages of development. The barriers between various development teams are being dismantled, leading to agile, streamlined processes from inception to the final product.
AI’s Co-Pilot role: enhancing human creativity
Amid the advancements of AI in software development, a central theme remains: AI is not here to replace human developers, but rather to augment their capabilities. Think of AI, like OpenAI’s ChatGPT, Amazon Q or Github CoPilot, as a coding AI assistant. It aids in generating boilerplate code, offering new ideas and automating routine tasks.
It is essential to note that the human touch is indispensable in understanding how to leverage AI’s insights and adapt them creatively to specific projects. As well as monitor for errors and prevent rogue code from being released.
The relationship between AI and human developers ensures that technology serves as a tool for innovation rather than a substitute for human expertise.
A glimpse into the future
As AI continues to evolve and redefine the landscape of software development, we stand at the brink of a new era. With investments pouring in from industry leaders like Accenture, Infosys, and Wipro, as well as every major enterprise software company, the potential for AI to revolutionize software development is unparalleled.
From automating tasks and elevating software quality to personalizing user experiences and enabling predictive insights, AI is ushering in a new wave of efficiency, creativity, and innovation. Developers are not being replaced by machines; rather, they are collaborating with AI to push the boundaries of what is possible. As we move forward, the harmony between human intellect and AI prowess promises to reshape the world of software as we know it.
We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Technology & Consulting Services.
The last year has seen the Events industry bounce back faster than anyone expected. The face-to face (F2F) industry, be it exhibitions, conferences, peer-to-peer or experiential has seen a surge in growth with events participants having a renewed appreciation of the value of F2F engagement in driving sales, networking, learning and collaboration.
While the fundamental allure of in-person interactions remains unchanged, the rise of Artificial Intelligence (AI) is enabling a new era of enhanced experiences, efficient operations, and innovations within the industry.
The reasons that people attend events is unlikely to dramatically change due to AI advancements. AI technology is finding its stride in augmenting these connections, providing scope to deliver more innovative, cost effective, efficient, and tailored experiences.
AI-Powered Trends
Lead generation and qualification
A key part of AI’s potential impact on the events sector lies on its prowess in real-time crunching of huge amounts of data. The ability to aggregate and analyze diverse proprietary data sets (e.g. feedback, registrations, interactions, sales patterns) with third party unstructured data (e.g. social media activity and engagement) will allow rapid qualification, identification and prioritization of leads for exhibitors in advance and on the day to ultimately drive higher levels of engagement and conversion.
Efficiencies through automation
The challenges of event planning – from registration and ticketing to speaker management and content production – are now prime candidates for AI-powered automation. Chatbots are emerging as versatile assistants, addressing attendee inquiries, processing payments, and distributing tickets. This automation will not only accelerate tasks but could free up event staff to focus on value-added endeavors. Eventex, for example, has already incorporated ChatGPT into its event management platform. Behind the scenes, event logistics are becoming more streamlined by AI tools that manage speaker availability, venue capacities and attendee preferences – helping organizers be more efficient.
Innovative and tailored event experiences
AI can also create new, innovative event experiences. While Generative AI based chatbots can drive efficiencies, they can also act as virtual concierges at events, providing attendees with instant and tailored guidance. Social media monitoring becomes a powerful tool to gauge attendee sentiment in real time, which could enable rapid interventions and elevate the overall event atmosphere. Facial recognition technology is being deployed to read attendee emotions, providing a new source of real-time data that paints a vivid picture of overall feeling, albeit at the risk of invading the privacy of attendees. All of these and more can potentially be combined with data based on footfall, visitor flow, content engagement, conference attendance and more. All of this data can then be used to optimize event dynamics on the fly.
Similarly, the advent of virtual and augmented reality offers novel opportunities for hybrid events that engage both on-site and remote participants. Through real-time translation of speeches and transcripts, audiences can be extended worldwide while on the ground, participants can be engaged more actively and creatively.
AI in set design testing becomes an agile playground for organizers, who can experiment with various layouts and ideas in a low-cost, nimble fashion. This innovation will help to precisely curate F2F experiences that cater to attendees’ needs and preferences.
Conclusion
Utilizing cutting-edge data analytics, seamless automation, and new innovations, AI is reshaping the landscape of events, transcending them beyond conventional gatherings. Participants can take part in captivating and tailored experiences, while event organizers have an opportunity to benefit from enhanced efficiencies and the invaluable insights that support an ongoing process of improvement.
Despite the continued integration of AI, the bedrock of success for any event remains rooted in authentic human connections, rendering the industry more robust against AI disruption.
As event organizers continue to amass operational efficiencies and AI technologies enhance the value proposition for attendees, the sector remains an attractive area to explore from an investment perspective.
We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Software Development.
Generative AI represents the next, and potentially most meaningful, key stage of Artificial Intelligence impacting the legal market. Generative AI ushers in a new era of efficiency involving automating routine tasks, enhancing legal research, and reshaping how lawyers construct arguments. Its potential to unlock unprecedented insights, streamline contract management, and predict legal outcomes heralds a transformative journey that promises to redefine the legal landscape for lawyers and clients alike.
History of AI in the Legal Industry
AI has already had an undeniable impact on the legal industry. There have been several pivotal stages, from eDiscovery Technology Assisted Review (TAR) and Litigation Analytics to Document Automation and Contract Analytics, that are important to understand when considering the impact that we anticipate Generative AI will have on this market.
The legal world saw its first glimpse of AI’s potential back in 2005 with eDiscovery TAR, which introduced a future where artificial intelligence could perform document review by detecting patterns in documents, effectively optimizing the tedious discovery process. TAR has been a critical driver of eDiscovery ranging up to becoming a $20B industry. Despite the subsequent innovations, across the market TAR remains the largest and most successful example of AI’s impact on the legal market.
Fast forward to 2012, and the legal market began to witness the rise of litigation analytics. Litigation analytics involved leveraging AI to detect patterns in data coming out of dockets, and case law to deliver profound insights and analytics on law firms, companies, and judges. These analytics are used for business and practice of law purposes. At first, the market was dominated by companies like Bloomberg Law, Docket Alarm and Lex Machina, but now a diverse range of players, from established companies to nimble startups, offer litigation analytics.
The mid-2010s marked a period of transformation through document automation. Before the era of Generative AI, we witnessed automated form completion based on decision trees and app-driven expert systems. Neota Logic and LegalZoom were early disruptors across both B2B and B2C, while Legalmation led the way in providing automation of pleadings in litigation. Since then, no-code/low-code platforms have become increasingly popular, allowing users to deploy software applications without needing a technical background.
The impact of AI extended to contract analytics, encompassing everything from pre-execution contract analysis to contract lifecycle management. Pattern recognition AI technology, effectively the early TAR on steroids, laid the foundation for contract analytics. Not limited to just legal use cases, contract analytics also ventured into compliance and front of the house use cases. A surge in capital raises during 2019-2021, and early 2022 has led to inevitable market consolidation.
Generative AI: Shaping the Future
The arrival of Generative AI back in 2022 heralds a new era of efficiency and effectiveness for legal professionals. Lawyers can leverage AI to handle repetitive and lower-end tasks, freeing up invaluable time and resources for higher-complexity, value-added work. In-house legal groups are increasingly turning to AI and tech-enabled solutions instead of relying on outside counsel. These advancements are now bearing fruit for early adaptors.
Internet browsers and the World Wide Web popularized the Internet for most people, and that development transformed whole industries, including law. In a similar way, Generative AI is the first exposure that most people have to powerful AI tools. Generative AI is just as disruptive. It is already changing what legal services law firms offer, how they price services, and what tasks corporate legal departments can handle in-house.
Ed Walters, Chief Strategy Officer, vLex
Automated Legal Research and Analysis
Generative AI possesses the unparalleled ability to process vast volumes of data faster and more accurately than humans. It can extract relevant information, answer questions, and build robust legal arguments.
Litigation Moneyball
Legal professionals can use Generative AI to analyze data to identify high-value clients, predict likely outcomes and behaviors, and recommend case strategies and settlement analysis. This revolutionary technology is already transforming areas such as personal injury, class action, and mass torts.
Contract Generation and Management
Generative AI streamlines the process of drafting and negotiating contracts. It provides invaluable insights that have the potential to standardize certain contract types across the market.
Litigation Workflow Enhancement
The benefits of Generative AI extend to AI-generated case law summaries, accelerated document review and summarization, deposition preparation, and regulatory compliance. It even takes on tasks like automated transcription, brief preparation, and formatting.
Conclusion: Embracing the AI-Powered Future
While we stand at the threshold of Generative AI’s influence in the legal market, its accuracy and adoption are still in the early stages. Yet, the trajectory is clear. Generative AI is poised to transform workflows, enhance efficiency, and empower lawyers to focus on the more strategic aspects of their profession. In the end, the synergy between human expertise and artificial intelligence is the way forward in the legal world.
M&A Role
Given the anticipated pace of transformation and the increasing adoption of Generative AI, we expect M&A to play a pivotal role in the legal market as firms look to gain a competitive edge. The table below includes AI-related transactions in 2023, which highlights this trend.
We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Events and Conferences.
AI-volution | The unfolding story CGI, Animation & VFX
Authors: Jonathan Davis(Partner, EMEA), Daniel Hart (Vice President, EMEA),Adam Gross (Managing Director, US)
The worlds of CGI, Animation and VFX are undergoing transformation, fueled by the proliferation of generative AI content creation tools. This wave of innovation promises to streamline workflows, unleash creativity and elevate audience engagement like never before.
In this article, we delve into the cutting-edge developments in AI, explore the potential challenges of copyright and fair compensation and discuss how innovation is reshaping the industry’s landscape.
The AI Revolution in CGI, Animation and VFX
Generative AI is taking center stage with a host of new tools, such as MidJourney, Runway.ai and WonderStudios. Alongside these, industry giants like NVIDIA are making groundbreaking strides with their Neuralangelo platform, which transforms 2D spaces into lifelike 3D environments. These developments are lowering the barriers of creativity, giving artists the power to swiftly ideate, develop and pitch concepts.
But the greatest impact could arise from automation. Once time-consuming manual tasks, like rotoscoping, are now being automated, cutting down laborious efforts from hours to minutes. Productions like “Everything Everywhere All at Once” are testament to this transformation, with VFX teams that once numbered in the hundreds now reduced to a core squad of 10 engineers.
Put to its best use, AI has the potential to become an essential collaborative creative partner helping to empower the next generation of VFX artists. Not only will it improve productivity, but it will also enable artists to explore new creative opportunities, re-imagine new creative visions and just as importantly preserve mental wellbeing.
David Patton, CEO of Jellyfish Pictures
Copyright Challenges and Fair Compensation
However, the rise of AI is not without its ethical and legal complexities. Generative AI technology often draws upon existing art, designs and content to create new outputs. This raises questions about copyright infringement and fair compensation for original creators. With outdated copyright laws ill-equipped to address these modern issues, the industry is calling out for reform.
In the US, writers staged a strike demanding higher pay and fairer contracts, particularly regarding the use of artificial intelligence in creative processes. Companies remain cautious about leveraging AI for client work, fearing high-profile copyright claims could significantly impact their reputations. This shift will particularly benefit those with vast databases of content, potentially creating a new hierarchy of content ownership.
One solution could be the implementation of smart contracts and non-fungible tokens (NFTs). These technologies have the potential to ensure fair compensation for creators by establishing transparent and immutable ownership records for AI-generated content.
Embracing Innovation
As AI continues to empower the industry, personalization emerges as a new frontier. The technology could, for example, be used to allow anyone to become the main protagonist in their favorite film or show, forging modern connections between audiences and content. Furthermore, leveraging Intellectual Property (IP) across multiple formats, from 2D to AR and VR, has become more feasible and cost-effective. This shift opens doors to interactive experiences, for example taking control of a VR spaceship, letting the audience play a pivotal part in a film.
The Human Touch
Despite the transformative potential of AI, it is crucial to remember that human intervention remains paramount in creating art with a soul. AI tools can revolutionize the production process, but they cannot yet replace the essence of human imagination and emotion. There will likely always be a need for artists and storytellers who breathe life into AI-generated concepts, bringing authenticity and depth to the finished product.
Profit Margins and Production Dynamics
The impact of AI on profit margins is a subject of both hope and concern. While automation could potentially lead to cost savings, questions arise about whether these benefits will be passed onto brands, content owners and studios. Will the increased efficiency of AI-driven workflows result in increased procurement pressure, more productions or simply lead to larger profit margins for production studios?
As AI democratizes certain aspects of the process, lowered barriers to entry may inadvertently lead to increased competition, subsequently impacting the pricing and value of Animation and VFX services.
Key themes related to AI in the market
Conclusion
The CGI, Animation and VFX industries stand at the precipice of an extraordinary era driven by generative AI, where human creativity and technological innovation converge in powerful harmony.
However, the industry must address the challenges of copyright and fair compensation to ensure that creators are duly rewarded for their contributions. With mindful regulation and the integration of human artistry, AI promises to elevate storytelling to new heights, redefine audience engagement and unlock an unprecedented realm of possibilities. As we navigate this new frontier, we look forward to the potential opportunities AI has to offer while valuing the human-led businesses that will take the industry to the next level.
M&A Role
Although fast-moving, AI-technology in Animation and VFX remains relatively nascent, and the sector has yet to witness a slew of AI-driven M&A deals.
Indicators of a game-changing future are apparent with venture capital increasingly flowing into AI enterprises. Notable among these are Move.ai, which is transforming movement in digital settings, Speech Graphics, with their speech-based facial animation software, and MARZ, introducing a ready-to-deploy AI solution for VFX.
These investments herald a promising era of AI-driven creativity and efficiencies in Animation and VFX.
We look forward to continuing the conversation as the AI-story unfolds. If you have any queries or would like to have an in depth discussion on this topic or the broader market please Contact us. Our next AI article delves into the world of Legal and Compliance Technology.
In a year of suppressed deal activity driven by a range of factors, we have maintained a high level of activity having completed 16 deals to date.
We have remained active across the Global Technology and Consulting Services sector and continue to see strong market appetite for leading businesses providing digital transformation, cloud and data capabilities.
Our busiest sub-sector so far this year has been Legal Technology and Services, having advised on four transactions ranging from Enterprise Software to Consulting/Services business models.
While we anticipate the rest of the year will pose challenges for deal-making, we are starting to see the green shoots of positive activity as we enter into 2024 budgeting season.
Please contact us if you want to hear about any of these deals in greater detail.
Location: The Pierre, New York City Partner: BDO (www.bdo.com)
JEGI CLARITY held its third Executive Leadership Dinner of 2023 on October 19th at the Pierre in New York starting at 6PM with cocktails. These events are structured as roundtable discussions and provide a stimulating evening of great conversation and networking.
This dinner was titled “An Insider’s View of the Rapidly Changing Research & Insights Landscape.” The roundtable discussion was led by Steve Schlesinger, Executive Chairman of Sago, who shared his perspectives on the evolving research and insights industry. The dinner brought together approximately 35 senior executives from a mix of large global corporations and emerging companies. Below is an overview of the discussion from attendee Jillian Gibbs, Founder & CEO of APR.
Steve posed many thought-provoking questions to the group, kicking off with “Given the dynamics in the world right now, geopolitically, socioeconomically and overall client behavior, what should companies be doing today to be successful?” In response, the consensus leaned towards prioritizing customer success and relationship management. The key takeaways included a commitment to excelling in one’s core competencies, fostering close proximity with clients and focusing efforts on overdelivering to solidify existing partnerships. Staying in tune with the evolving needs of clients was highlighted as essential, ensuring that support remains tailored and effective. Leveraging satisfied clients as influential voices to generate new business leads was also encouraged. Finally, the proactive offering of multi-year contracts at a discount emerged as a strategy to cement these crucial relationships, securing a path to long-term success.
The group discussed opportunities, challenges, and trends in the research and insights industry. One significant trend mentioned is the shift of tech companies using consulting as a lead generation strategy to drive their subscription models, which is the opposite of how it was done in prior years. This change underscores the growing importance of consulting services in the tech sector. Additionally, clients are increasingly outsourcing roles such as data and business analysts, a shift that businesses in this space should leverage to expand their services and expertise. Furthermore, it’s crucial to help clients achieve more with less, offering efficiency and cost-effectiveness without compromising the quality of work. This approach will enhance client satisfaction and retention.
Observing the changes from the previous year, there’s a clear trend in clients shifting from annual plans to quarterly plans, reflecting the need for agility in these rapidly changing times. Additionally, AI has become a pivotal tool for data, and it’s essential for businesses to consider how they can incorporate AI into their operations to enhance productivity and services. Lastly, the idea that “flat is the new growth” means that companies that can maintain a stable revenue while improving their EBITDA performance are considered successful in the current environment.
If you would like to discuss further or learn more about our events, please contact us at contact@jegiclarity-us.com.
