Netflix and Amazon Prime are using AI algorithms that hide content from some users, media executive says

Jyoti Deshpande of Reliance Industries highlighted that AI-powered streaming algorithms are fundamentally reshaping media distribution by limiting audience exposure to diverse, particularly international, content, despite its quality or accolades. This algorithmic gatekeeping challenges global content producers and necessitates platforms like Netflix, Amazon, and Apple to improve discoverability, reflecting a broader shift where Hollywood's global market share is declining and algorithm-driven fan engagement can propel non-U.S. content to prominence. This dynamic has significant implications for investment in media production and distribution, as traditional revenue models and audience reach are being redefined.

Analysis

Jyoti Deshpande of Reliance Industries highlights that AI-powered algorithms on major streaming platforms, including Netflix, Amazon, and Apple, are inadvertently limiting content distribution and audience exposure, particularly for international films. This algorithmic gatekeeping creates "blind spots" that prevent quality content, such as India's Oscar entry *Laapataa Ladies*, from reaching diverse global audiences. This is significant as subscribers spend an average of 110 hours annually scrolling, with half feeling overwhelmed by content volume.

The executive notes a disparity where 70% of Hollywood's global revenue comes from international markets, yet many international producers rely more on domestic revenues due to these distribution challenges. Deshpande emphasizes the onus is on large platforms to actively promote and make diverse international content discoverable. This challenge comes as Hollywood's global box office share has declined from 92% two decades ago to 66% today, indicating a broader shift in content consumption.

Despite algorithmic limitations, the success of international titles like *RRR*, *Squid Game*, and *KPop Demon Hunters* (Netflix's first #1 box office title) demonstrates that strong fan engagement can overcome initial algorithmic hurdles. Netflix's "local for local" strategy, while aiming for cultural specificity, still faces criticism for potentially restricting broader international reach, contributing to a moderately negative and uncertain market sentiment.

Key Decisions for Investors

• Investors should closely monitor how major streaming platforms (NFLX, AMZN, AAPL) evolve their AI algorithms and content promotion strategies to address discoverability issues for diverse international content.
• Evaluate content production companies based on their ability to generate strong fan engagement and cultivate niche audiences, as this appears crucial for algorithmic breakthrough and global reach.
• Consider diversifying media holdings to include companies with strong international content pipelines or those actively addressing algorithmic distribution challenges, given the shifting global box office dynamics.