Media Companies Evolve Through Partnerships, Pitfalls, Copyright Conflicts and Adapting to AI
By Paul Gerbino
As I prepared for my panel discussion, “Forging Partnerships with LLMs: What You Need to Know” at the Software and Information Industry Association’s (SIIA) Business Information and Media Summit (BIMS) in New Orleans, I have been reviewing the report we continue to build at Creative Licensing International on “Major Media Companies and their AI Deals.” It had me thinking about what has been happening and what form these deals generally take.
The digital landscape is crackling with a new kind of gold rush, one where the currency isn’t nuggets or pixels, but data. Specifically, the data that fuels the voracious appetites of artificial intelligence (AI). And in the crosshairs of this feeding frenzy? The venerable institutions of journalism. From the hallowed halls of The Wall Street Journal to the digital trenches of Reddit, media companies are grappling with a seismic shift: how to navigate the rise of AI. The choices are stark: embrace the technology, fight it tooth and nail, or a precarious balancing act somewhere in between.
When you hear some of these media companies justify their deals, they begin to sound like a rationalization for selling their souls. But as one AI executive said to me, “they already stole our content, why not make some money off of the theft while we still can.”
To put this all in perspective, it is probably a good idea to look at what these deals look like as well as some of the lawsuits of those media companies that are fighting back.
PS, Frank Bilotto promised that I will cite video evidence that he was way ahead of the curve. Well, Frank is ahead of the curve, but that evidence will be in the second part of this article in our next newsletter.
The Deal-Making Frenzy: Partnerships and Licensing
In the last 19 months, the deal-making frenzy is undeniable. News Corp, the behemoth behind the Wall Street Journal and the New York Post, struck a reported $250 million, five-year deal with OpenAI. “News Corp Agrees to Deal With OpenAI to Use Its Journalism for AI”. The Associated Press did a licensing deal with OpenAI, allowing for access to its trove of news stories. The Financial Times does a deal with OpenAI, allowing OpenAI to access content from the Financial Times. “Financial Times strikes a deal with OpenAI to license content”. Vox Media has also signed a deal with OpenAI, although specific details are not available. And the list goes on, and on and on. Creative Licensing International lists over 30 noteworthy deals through December of last year.
Motivations: Opportunity and Necessity
What’s driving this flurry of activity? It’s a complex dance of necessity and opportunity. For media companies, the allure of substantial licensing fees is undeniable, a lifeline in an era of dwindling ad revenue and subscription fatigue. Moreover, these partnerships offer access to cutting-edge AI technology, tools that promise to revolutionize everything from content creation to audience engagement.
Take Informa’s deal with Microsoft. For $10 million upfront and recurring payments, this initial three-year deal provides Informa access to Microsoft’s Copilot and AI technology to improve operations and research. This reflects the trend of media companies using AI for operational improvement. Semafor did a Microsoft deal for showcasing AI-driven news feeds and recommender systems. Axel Springer expanded its partnership with Microsoft, which includes AI, advertising, and cloud computing, highlighting AI for monetization and operational improvement.
Legal Battles: Copyright and Ownership
But the deals aren’t just about financial windfalls. They’re about securing a seat at the table to influence how AI models are trained and deployed. News Corp, for instance, is reportedly contributing its journalistic expertise to maintain “high journalistic standards” within OpenAI’s offerings. The goal? To ensure that AI-generated content reflects the accuracy and integrity that readers expect.
However, the road to AI integration is paved with legal landmines. The New York Times, along with Alden Global Capital‘s eight daily newspapers, and the Center for Investigative Reporting (CIR), have taken a decidedly different approach, launching lawsuits against OpenAI and Microsoft for copyright infringement. They argue that their content has been used without proper compensation or attribution, undermining their business models.
The legal battles center on a fundamental question: who owns the data that trains AI models? The Times lawsuit directly confronts the issue of copyright protection, while the CIR lawsuit highlights the complexities of intellectual property in the age of AI. These lawsuits are not just about recouping lost revenue; they’re about setting precedents that will shape the future of content licensing and copyright law.
A Patchwork of Agreements: Data and Content Licensing
Beyond the high-profile lawsuits and deals, the industry is grappling with other licensing agreements such as Reddit, for example, which signed a $60 million deal with Google and completed another deal with OpenAI to license its user-generated content for AI training.
On the image side, Shutterstock, meanwhile, struck a six-year deal with OpenAI, providing images, videos, and music for model training. Another source of images Freepik, a Spanish image platform, has licensed most of its 200 million images to two AI companies for 2 to 4 cents per image.
From 40,000 feet, when you look at this patchwork of deals and suits, many that are not even listed here, you start to see distinct business models appearing:
- Content Licensing: Media companies license their content (news articles, images, videos, etc.) to AI companies to train their models.
- Technology and Product Expertise Exchange: Media companies gain access to AI technology and expertise from AI companies, while AI companies benefit from media companies’ journalistic standards and content.
- AI-Powered Content Creation/Analysis: Media companies utilize AI for content creation, analysis, and data visualization.
- AI-Driven News Feeds/Recommender Systems: Media companies or AI companies develop AI-driven systems for news delivery and personalization.
- AI for Operational Improvement: Media companies use AI to enhance internal operations (efficiency, research tools, etc.).
- AI for Content Personalization and Audience Engagement: Media companies leverage AI to tailor content and improve user engagement.
- AI for Monetization: Media companies utilize AI for advertising and monetization strategies.
- Legal Action/Copyright Protection: Media companies pursue legal action against AI companies for copyright infringement.
- Sponsorships for AI Development: AI companies sponsor media companies to develop AI-driven tools or platforms.
- Data Licensing for AI Training: Media companies license data to AI companies for training their systems.
Navigating the Crossroads of Innovation and Intellectual Property
The battlefield seems to be drawn. It is a maelstrom of AI deals and legal broadsides, which may be a high-stakes gamble for media companies.
Licensing agreements? Are they a whisper of pragmatism, or perhaps an acceptance to the inevitable. A “grab what you can” mentality since the content was already stolen and the proverbial horses are out of the barn. A chance to squeeze revenue, to ride the innovation wave, before the tide turns. Meanwhile, the courts echo with the thundering pronouncements of copyright, a defiant stand against the digital pilfering of intellectual property. This is the heart of the matter, the very crux: a desperate dance between technological embrace and the sacred preservation of copyright and intellectual property ownership. A clash fueled by data, dollars, and the very soul of content creation. (It reads like a movie plot.)
Motivations are multifaceted: financial necessity, maintaining integrity, and improving operational efficiency. The patchwork of licensing agreements highlights the fragmented AI content marketplace, raising questions about transparency and long-term sustainability. The integration of AI into news production, as seen in projects by the BBC and others, offers potential benefits but also ethical challenges.
Ultimately, the media industry faces a critical juncture. Decisions made now will determine its future, balancing technological advancement with the preservation of journalistic values in an AI-driven world.
A Path Forward: Direct Engagement and Collective Empowerment
Despite the challenges, media companies have a unique opportunity to reclaim their role as trusted sources of information in the age of AI. Rather than simply licensing content for use in opaque AI models, they can leverage AI to directly engage with their audiences, providing authoritative answers and personalized experiences.
Imagine a future where readers can ask a news organization a specific question and receive a comprehensive, AI-powered response, drawing from the organization’s vast archive of journalistic work. This would position media outlets as the definitive source of truth, building trust and fostering deeper engagement. By directly controlling the AI engine that provides these answers, media companies can ensure accuracy, transparency, and ethical use of their content.
Furthermore, small to medium-sized publishers, who may lack the resources to compete individually, can find strength in unity. By forming consortiums and pooling their content, they can create a powerful AI engine that reflects their collective journalistic expertise. This collaborative approach would allow them to control their own destiny, bypassing the need for reliance on large tech companies and ensuring their voices are heard in the AI-driven information ecosystem.
This path forward requires a shift in mindset, from passive content providers to active information curators. It demands investment in AI technology, ethical guidelines, and robust verification processes. However, the potential rewards are significant: enhanced audience engagement, increased revenue streams, and a renewed sense of purpose in the digital age. By embracing AI on their own terms, media companies can not only survive but thrive in the evolving information landscape.
Postscript
If you made it this far, and read the entire article, I am impressed. As a gift I would be happy to send you the report mentioned at the top of this article, “Major Media Companies and their AI Deals.” Send us an email at [email protected] and request the report. Thanks.
About Paul Gerbino
Paul Gerbino is the President of Creative Licensing International. He is an expert in digital, content strategy, licensing, product development, advertising, and copyright protections. His expertise is noted with an exemplary track record of transforming low-performing projects into highly profitable revenue streams. Evident in creating and launching innovative digital media products and advertising programs for B2B, B2C, STM, and academic publishers. Paul is passionate about helping publishers improve their performance, productivity, and profitability in the evolving digital landscape.
