COSO Releases Generative AI Risk Framework
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has released a new publication offering a roadmap for managing the risks associated with generative AI. The guide is designed to translate COSO's Internal Control–Integrated Framework into practical, audit-ready guidance for companies implementing and governing the use of GenAI technologies.
- Generative AI tools are significantly reducing production costs and timelines in animation, with some predicting it could cut labor and production time by as much as 90%, enabling smaller studios to compete with larger players by automating tasks like character design, background creation, and complex animations. - Studios are increasingly validating intellectual property on platforms like YouTube before committing to full-scale production. Cross-fertilization between YouTube shorts and traditional outlets is a key dynamic, with successful short-form content being developed into longer animated series. - In the current M&A landscape for content and animation, strategic acquirers are dominant, accounting for 73% of the capital invested. Valuation multiples for animation companies can range from 8x to 17x EBITDA, with a strong emphasis on the value of intellectual property. - Parents are the primary gatekeepers for content discovery for younger children, often introducing shows they enjoyed themselves. As children get older, peer recommendations and their own exploration on platforms like YouTube become more influential, with many tweens and teens acting as the family's "advisor" on what to watch. - There is a notable shift in kids' media consumption, with streaming services and YouTube dominating. For instance, 85% of parents report their children watch YouTube, and for children under two, that number has jumped from 45% to 62% in five years. - In the kids' content market, there's a strong trend towards acquisitions over new commissions. In 2023, major studios significantly decreased new show orders while nearly doubling the number of acquired shows to retain subscribers. Reboots and spin-offs of existing IP are also highly valued due to built-in brand recognition with both kids and parents. - Apple's Vision Pro and the broader push into spatial computing are opening new avenues for immersive and interactive kids' entertainment and education. The technology allows for experiences that blend digital content with the physical world, moving from "storytelling" to "storyliving." - Parental concerns about screen time are evolving, with a greater focus on the quality and educational value of content. There is a demand for media that teaches social-emotional skills or STEM concepts, a trend seen in the popularity of shows like *Daniel Tiger* and *Odd Squad*.
