In every era, technology upends the entertainment landscape — TV in the mid-century, CGI starting in the 1990s, and streaming over the last 15 years. Now, as companies shift their focus to ad-supported models and AI, actor and entrepreneur Edward Norton has found himself in the middle of the fast-changing landscape.
Norton — who's known for his work in films like "Glass Onion," "Birdman," "The Grand Budapest Hotel," and "Fight Club" — is also the co-founder of EDO, a media analytics company specializing in TV advertising. The company provides data on the reach and efficacy of ads, with clients like Disney (DIS), Amazon (AMZN), Paramount (PARA), and AT&T (T). Its financial backers include Shamrock Capital Advisors and Breyer Capital, according to Crunchbase.
"I bet Netflix, as it becomes a fully ad-supported network business, will double its market cap,” said Norton. “I bet Netflix's market cap will go higher than anybody thinks it's going to go when people realize how effective an advertising platform that company’s going to become.”
Norton co-founded EDO because he sees the writing on the wall — a future where advertising-based video-on-demand (AVOD) will be an increasingly dominant force in the media marketplace.
"The big seismic shift is that people are realizing it can't all be through subscriptions, so that's why all the streaming platforms are moving to ad-supported models," he said in an exclusive sit-down with Yahoo Finance.
"When Bob Iger is saying ad-supported streaming is going to be one of the biggest growth centers for Disney, people should pay attention because, what it really means, in my opinion, is that there will be no more linear television within five years."
In Disney’s last two earnings calls, Iger spoke about the “enormous advertising potential” of the company’s streaming business and said that AVOD platforms are “an advertiser’s dream.”
As Hollywood’s business model evolves, EDO is positioning itself to be in the picks and shovels business. While it’s hard to know who will win in the streaming gold rush, every streamer will need data from firms like EDO.
Its co-founder, Daniel Nadler, previously launched financial data company Kensho Technologies, which was acquired by S&P Global (SPGI) in 2018 for about $550 million. Norton — who has also co-founded startups Zeck and Crowdrise — was an early investor in Kensho, which has been using AI and machine learning to streamline unstructured data since 2012.
While AI has been a hotly debated topic in Hollywood, Norton is — maybe uncharacteristically — optimistic, saying that AI has the potential to enhance rather than detract from artistic work.
"Great work on a creative level will be fueled by human imagination and human empathy and I think that these things will largely come to be seen as tools, much like CGI," said Norton. "Computer graphics didn't ruin photography or make cinematography irrelevant."
Ideally, AI molded by the hands of capable artists can produce exciting work, like filmmaker Bennett Miller's exhibition this year at the Gagosian Gallery in New York. Miller, who directed films like Capote and Moneyball, used Open AI’s DALL-E to generate photographic prints that are what he called "layers upon layers of fiction."
"AI didn’t create those images," Norton said of Miller’s work. "It was this obedient servant that let a great artist like Bennett compose and curate images through thousands and thousands of iterations that are expressions of his mind and intent."
Still, for actors and writers unions like SAG-AFTRA and the Writers Guild of America, this is the right time to negotiate, because revenue structures in Hollywood are on the cusp of a tech-powered shift, Norton said. (After 118 days, the SAG-AFTRA strike ended on Nov. 8, while the WGA’s ended in October. AI was a central concern for both unions.)
From Norton’s perspective, as linear TV loses market share and AVOD gains traction, streaming companies like Netflix (NFLX) are set to get even bigger.
"We are heading into everything, everywhere, all at once, in terms of content," said Norton. "Our kids will never understand why anyone tried to line up their schedule around the viewing of something."
If disruptions in media — from TV to CGI to streaming — continue their trend of increasing velocity, Norton’s bet may well prove to be a savvy one.
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Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on X, formerly Twitter, at @agarfinks and on LinkedIn.
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