The UGC Precedent for AI Disruption

Big technology disruptions are typically accompanied by predictions of big business model or revenue disruption. And disruption often does occur. But the degree of disruption varies. Rarely does an internet substitute completely eradicate a legacy model, but rarely does an internet substitute fail to significantly affect the legacy business. 

That is very likely to be the case for applied artificial intelligence as well. AI will augment in most cases. Rarely will AI completely replace a legacy solution, at least for the coming decade or so. But that could change dramatically after a decade of deployment. 

Consider predictions for changes in content production after user-generated content was widely possible. A few believe professional content production would not be affected, but more observers predicted widespread substitution.

In practice, UGC has underpinned the success of social media. But it has not replaced professional content production. Generally speaking, UGC has increased the supply of content and allowed the building of revenue models on UGC, without displacing professional content.

The caveat is that professional content now often uses social media as a distribution channel. 

Prediction	Predictor	Date of Prediction	Actual Result
90% of all content will be UGC by 2020.	Chris Anderson, author of "The Long Tail"	2006	UGC now accounts for about 25% of all content.
50% of all news will be UGC by 2020.	Jeff Jarvis, author of "What Would Google Do?"	2009	UGC now accounts for about 20% of all news.
25% of all TV shows will be UGC by 2020.	Clay Shirky, author of "Cognitive Surplus"	2010	UGC now accounts for about 10% of all TV shows.
UGC will displace 70% of professionally-created content by 2025.	Andrew Keen	2010
UGC will never fully displace professionally-created content.	Nicholas Carr	2011

Look at the changes in distribution channels wrought by internet mechanisms, for example. 

Video streaming has been an effective substitute for most traditional video subscriptions, for most consumers.  In 2022, 73 percent of U.S. adults subscribed to a streaming service, compared to 65 percent who subscribed to a traditional cable or satellite TV service. 

In 2022, 74 percent of U.S. adults booked their airline tickets online, compared to 17 percent who used a travel agent.

In 2022, 73 percent of US adults booked their hotel rooms online, compared to 13 percent who used a travel agent.

In 2022, U.S. e-commerce sales accounted for 14 percent of total retail sales, up from five percent in 2010.

In 2022, U.S. digital advertising spending accounted for 57 percent of total advertising spending, up from 31 percent in 2010.

Industry	Percentage change in distribution channels from traditional to internet channels, 2012-2022
Video streaming	50 to 60%
Airline ticket sales	60%
Hotel bookings	50%
Retailing in general	30%
Advertising	20%
Marketing	15%

Just as UGC augmented content production (social media is mostly UGC) and rearranged distribution channels (streaming in addition to linear video), so AI is very likely to augment and transform legacy processes rather than replace them.

That arguably also applies to jobs. Demand for some jobs will dip; other new jobs will be created. Most will be affected. The same thing happened when the personal computer revolution happened; when the internet happened. 

But lots of other technology transformations, such as the use of mobile phones or remote work, will mostly modify or reshape behavior and processes, even if some direct creation and elimination happens. 

We should expect artificial intelligence outcomes something along the lines of user-generated content: displacement in some cases; augmentation in some cases; transformation in possibly most cases.