by Frank Bilotto

Santa Claus or Scrooge? It Depends on Your Perspective.

How about this for a great Christmas present? In the not too distant future AI will be able to utilize all the life experiences of the Beatles, their musical and vocal abilities, and their creative endeavors up until December 24th, 1964, and then compose and perform the perfect Christmas song that they would have written and performed on December 25th, 1964. And most likely the song will be better than the Beatles could have done themselves. The same thing could be done for 1965, 1966, 1967, 1968 and 1969. Depending on how much you like the Beatles, you would have six perfect Christmas songs that reflect the Beatles evolution. That’s not science fiction and it’s not too far away.

A few weeks ago, I warned you that AI would be moving fast, and would impact all content creators, no matter what their individual positions were on participating with machine learning technologies. But even I had no idea just how fast. In the coming weeks, I’ll be detailing the variety of opportunities and pitfalls for publishers and content creators.

#1 The Google Dilemma

In the early 2000’s I was advising publishers to enable Google to index their content, as it would have a positive impact on their revenue. For 10 years, it did. Google provided search results with hyperlinks that sent its users to the publishers’ native sites where they could monetize their content with advertising, pay per view or subscriptions. However, in 2012 things started to change. Google started providing answers in the top search result, instead of links. The answers came directly from the publishers’ content, but the user never left Google’s website. So, publishers began losing revenue opportunities. 

AI has exponentially threatened revenue opportunities for publishers, and ultimately their very existence. In the past, I recommended to all of my publishers that require subscriptions or pay per view for access to content to permit Google to index their content, so that links to their sites would appear in Google search results. In order to properly index content so that it can be retrieved in relevant searches, entire articles have to be ingested. Initially, it didn’t matter, because the user was unable to see the content at Google’s website. 

“Do No Evil.” Don’t Bet on it.

However, Google’s AI engine, Bard, changes the game. Now, if a publisher’s content is indexed by Google, its content can easily be ingested into Bard’s machine learning engine. Once content becomes part of the system, it cannot be removed. It will be a resource for generative AI content in perpetuity, with no effective way to track how often or how much a specific publisher’s content is utilized. The bad news, and while I can’t prove any impropriety on the part of Google, I suspect that any content previously indexed by Google is already part of the Bard generative AI technology. This means that even though end users can’t see your content for free, Bard probably has. Your content is likely to be producing AI generated articles for Bard right now. So, Google is making money from your content and you are not being compensated for it.

History Repeating Itself, Sort of.

Just like the number of  live bands, which used to perform at dances, weddings, and nightclubs, have significantly decreased since the advent of DJ’s, so too will publishers begin to disappear as a result of AI generated content. If people can get their music from a DJ at a significantly reduced cost and better quality, why pay a live band? 

AI generated content can be produced at essentially zero cost. So, the cost to publishers utilizing human content creators, coupled with decreasing revenue streams is prohibitive to operating a successful business. Simply put, AI will force publishers into bankruptcy even faster than DJ’s eliminated live bands. 

Easier to Predict than Alabama vs. Slippery Rock

If nothing is done, as publishers begin to disappear,  AI companies will become the world’s largest publishers, utilizing human content creators to create content for ingestion into machine learning technologies. Remember, AI needs data upon which to generate new content. There is still nothing like the human mind to create something novel, unique and new. AI companies will be creating the cash flows required to support human content creators, as traditional publishers with decreasing revenues fall victim to revenue deserts, which once were overflowing streams. Prepare to say goodbye to McGraw Hill and hello to Google Publishing. This is not a question of if, but of when. This will happen in my lifetime, and I’m 63. 

So, what is a Publisher to Do?

Protect yourself by getting into the game, right now. 

The AI revolution is not going to reverse course. In the past month, I’ve been approached by a dozen AI technology companies, aggregators, and copyright agencies asking me to execute amendments or new agreements that permit my clients’ content to be used for AI generated content. My advice to my publishers is simple. The future is already determined. The best time to get into the game is right now, while AI is preparing to pay for premium content. The longer you wait, the less your content will be worth, as content pools become saturated.  

Landmark Deal

Axel Springer, publisher of Politico and Business Insider, has struck a deal with Open AI (Chat GTP). Terms are undisclosed, but I think I can presume to know what they are. Axel Springer is getting a flat fee for archive content and a fee for each article produced in the future in exchange for unlimited and unrestricted use of the content by Open AI. It’s the only deal that makes sense for both sides. Revenues to Axel Springer are estimated to be at least $10 million. 

After brainstorming a number of revenue share models, an upfront flat fee is the only deal that I’m recommending to my publishing clients, because it is the only one where a potential fair payment is certain. 

As the title of this article indicates, you can call me Scrooge or you can call me Santa Claus, but “this is the business we’ve chosen.” So, if you want to stay in business you need to begin making deals right now with AI companies for unrestricted use of your content. I know I’m breaking every rule of preserving the value of your content, but the content world is changing. In fact, it’s already changed. You can see these times as an opportunity to monetize your archives and capture new sustainable cash flow for your content, or you can try to dig in and preserve the perceived value of your content, while the barbarians storm the gate. 

Some of you have read this article as gloom and doom, others see it as an opportunity to grow your business. All I have left to say is, “Merry Christmas!” (That’s either genuine or cynical, depending on your perspective.)