All the World's a Stage

Bad Bunny. Casa de Papel. Genshin Impact. Parasite. Peso Pluma. Squid Game. Mukbang. Peaky Blinders. BLACKPINK. Khaby Lame. Black Myth: Wukong. You’ve surely heard most of these names before. They may all feel like isolated examples. But they are not.

In the mid 1990s-early 2000s, a common bull case for U.S. media companies was that rising middle classes in China, India, and Latin America would create billions of new consumers for U.S. content and the biggest U.S. media companies would become even more dominant globally. In recent years, something like the opposite happened.

I’ve written before about globalization as one of the six tectonic trends that define the modern media business. In this post, I expand on this idea. The dominance of U.S. culture in global entertainment was always an artifact of structural barriers. Those barriers have been falling for the past two decades. Now GenAI is poised to finish them off. Then what?

Tl;dr:

• Modern media evolved in parallel across much of the developed world, but by the 1950s-1960s, the U.S. started to firmly establish itself as the dominant exporter of culture globally.

• This started to reverse around the turn of the century. In recent years, U.S. content has been losing ground internationally and U.S. consumers have shown growing demand for foreign content.

• This reversal isn’t likely about anti-American sentiment, declining quality of U.S.-produced content, or just shifting tastes. Instead, U.S. dominance was an artifact of four structural barriers to free-flowing content: the high cost of competitive production values; restrictive local market structures; regulation; and language and culture.

• The internet weakened the latter three barriers—loosening local market structures, eroding the effectiveness of content regulation, and seeding a more fluid global culture—but largely left the production values advantage intact.

• GenAI attacks that remaining barrier: by democratizing access to high production values, it erodes the last meaningful advantage U.S. incumbent media companies held. That in turn supercharges the creator economy globally, which further loosens the grip of local gatekeepers and further defangs regulators. The likelihood that developing markets will embrace GenAI faster and more completely will compound this effect.

• GenAI also targets the language and culture barrier directly, through vastly improved translation, dubbing, and eventually cultural localization.

• In other words, collectively, structural barriers formed a semi-permeable membrane—content flowed out of the U.S. into the rest of the world, but not much flowed in. The membrane is now dissolving.

• A truly globalized media world will be more dynamic than the U.S.-centric view of cultural stagnation suggests. It will also present genuine new opportunities for non-U.S. markets and for the world’s “Lost Spielbergs”—talented creators previously locked out by structural disadvantages.

• But more equivalent access won’t mean more equivalent success. As content markets become truly global, positive feedback loops will operate at a scale that wasn’t previously possible, making power law distributions more extreme, not less. Increasingly, the next massive global hit can and will come from anywhere—but the spoils will probably be even more concentrated at the top.

U.S. culture isn’t dominant because it was first. Many regions had and have vibrant local media cultures that developed more or less in parallel. Filmmaking emerged simultaneously across most developed industrial economies in the 1890s-1910s; Japan had a thriving domestic film industry by the 1910s; and both Bollywood and Latin American cinema developed meaningfully in the 1930s-1940s. Television also evolved around the same time in developed markets. The U.S. was unusual because ABC, CBS, and NBC were commercial from the start, but in many large markets, one or more dominant state-owned or subsidized networks also started in the late 1940s-mid 1950s (the BBC in the UK, NHK in Japan, RAI in Italy, and so on). And of course every region has a distinctive, native popular music tradition—flamenco in Spain, music hall in the UK, samba in Brazil—most of which predate native music forms in the U.S., like jazz, blues, rock, R&B, and hip hop.

Around mid-century, however, the U.S. started to establish itself as the dominant exporter of entertainment content globally. In film, Hollywood’s ascent began in earnest after World War I and its position was unassailable by the 1950s. U.S. films commanded roughly three-quarters of screens worldwide through much of the mid-to-late 20th century. American TV shows—Bonanza, I Love Lucy, Dallas, Baywatch, Friends—became fixtures around the world. In music, U.S. dominance was never quite as complete because music is a critical part of local culture everywhere. Pockets of global influence emerged from some markets, most notably the British Invasion in the 1960s. But American rock and, later, R&B and hip-hop, became the closest thing to global music. When video games emerged as a mass medium in the 1980s, initially U.S. and Japanese developers split the market between them, with Western publishers (EA, Activision, and Take Two) coming to dominate globally alongside Nintendo and Sony.

To borrow Frank Sinatra’s line about New York, there was, and to some degree still is, a view about America that if you “make it here, you can make it anywhere.” Sophia Lauren, Brigitte Bardot, Jackie Chan, Arnold Schwarzenegger, Shakira, Guillermo del Toro, Penelope Cruz, and others, all made their way to the U.S. and learned English to try to make it in the biggest entertainment market in the world.

By 2000, the consensus was American dominance over global culture would continue. A common bull case for U.S. media was that rising middle classes in China, India, and Latin America would be a windfall for U.S. media companies. The logic was that rising disposable income, technology diffusion (consumer electronics and pay TV) and more liberalized markets (especially in China) would substantially increase both ability and willingness-to-pay for U.S. content.

In the late 1990s-early 2000s, the bull case for U.S. media was that rising middle classes around the world would increase demand for U.S. content. The opposite happened.

In reality, what happened was something like the opposite. Not only has demand for U.S. content declined internationally in recent years, but American consumers have become large importers of international content.