Marlon Brando’s Advice to Small and Midsize Publishers

by Frank Bilotto

Two of my favorite movies are “On The Waterfront” and “The Godfather”. As I contemplated how to write this article, some of Marlon Brando’s iconic lines kept creeping into my mind. So, please indulge me with the references. But if you’re a movie buff, they’ll help to keep you focused on what you need to know right now. 

This article serves as a warning to small and midsized publishers. The future of your companies is in jeopardy. AI is here and moving fast. Your decisions over the next few months may determine whether you’ll still be publishing in a few years. 

Nine months ago, in my first article for CLI, I warned all publishers that your content was never going to be worth more than it was at that time. I advised small and midsize publishers to get in early with AI, and execute license agreements as soon as possible. Most importantly, I advised small and midsize publishers to join forces, because it would be a classic example of the whole being greater than the sum of the parts.

Since I wrote that article the following deals were inked: Dotdash – Open AI, NY Times – Google, Reuters – Amazon, AP – Automated Insights, Bloomberg-Open AI,  Gannett – AI Content Generation, NewsGuard – Microsoft, NewsCorp – Google. While all of the terms of these agreements have not been disclosed, it’s estimated that the aforementioned publishers gave away their content for hundreds of millions of dollars – and, in two cases, more than $1 billion. 

$1 Billion sounds like a pretty good deal for a publisher, right? As I said in my previous article, by giving away their assets, big publishers have potentially sold their future existence in exchange for the “short end money”. That’s an expression that refers to interest rate trading, but I remember it from Brando’s famous “I coulda’ been a contender” speech, when he blames his brother for making him take dives for cash, which forfeited his chance to fight for the title. Major publishers have done the exact same thing that Brando did. They took the short end money, and forfeited “a title shot outdoors in a ballpark”. So much so that I am certain that, in the near future, an AI company will become the largest publisher in the world. Right now, some of the major publishers that made these deals are unwittingly holding “a one-way ticket to Palookaville”.

What does all this mean for small and midsize publishers? Well, if you’re a news publisher, your content is worth less now than it was a few months ago. All you have to do is examine news publishers to easily spot the signposts that predict the future for all types of publishers. 

“It’s not personal, it’s business.” (Brando didn’t say it, but his adopted son, Hagen said that Brando always said it.) 

With recent news publisher deals, news content for AI is already becoming saturated. NewsCorp’s, Reuters’ and Gannett’s extensive and high-quality news content, integrated into AI engines, enables users to access a vast amount of information directly from the AI. This reduces the need for users to visit smaller news publishers’ websites, lowering their traffic and visibility.

The fact is that AI will whack publishers. Platforms like ChatGPT provide instant answers to users’ queries, which will decrease the number of search engine clicks to smaller news publishers’ sites. This will have a downward, spiraling impact on SEO rankings and organic search traffic, further reducing ad revenue and audience growth.

As more users turn to AI for information, the audience size for smaller publishers will shrink. Advertisers will migrate to larger platforms with AI integration because of their broader reach and more detailed user data.

Publishers dependent on subscriptions won’t fare any better. The availability of high-quality content through AI will diminish the perceived value of subscription services offered by smaller publishers, even if your content is not part of AI engines. Users will be less willing to pay for your content when they can access similar information through AI platforms.

In “On the Waterfront”, Brando is telling publishers exactly what to do. If you’re a small to midsize publisher, you’re most likely producing unique, high-quality, and niche content that larger publishers do not cover. Your specialized, in-depth content caters to specific audiences.  Your credibility in your space is currently unrivaled by AI, but it soon will be. So, you need to act now.

As a small to midsize publisher, your only option is collaboration with other small to midsize publishers, and there are thousands of you. You must form alliances with each other, bundling your content so that the whole is greater than the sum of its parts. Some of CLI’s forward-thinking publishing clients have asked CLI to lead the initiative to spearhead such an alliance. 

The day came for Bonasera, when he was asked to prepare Sonny’s body for the funeral. If you take a minute to objectively look at the landscape, you’ll know that day for you is today. There are dozens of potential publishing partners that can form a valuable alliance for both AI engines and users. But you need to abandon your old ways of thinking. In addition to aligning with publishers that complement your content or produce unrelated content, you need to bring in your competitors, as well. Your real competitors are not other publishers. Your competition is AI technology. 

All small and midsize publishers need to align to create a bundle of content significantly more valuable than even the largest publishing consortiums that exist today. And you must do it soon. What was once a competitor is now part of your resistance and offensive strategy against the domination of AI. I will acknowledge that, initially, you may think that this route is a bit dangerous – but your option of going at it alone is not only riskier, but deadly. 

I’m not naive enough to to ignore that a publisher alliance presents a host of its own problems, primarily the valuation of your content against all the other publishers in the alliance. Quality and quantity will have to be objectively evaluated. But just like latecomers to AI engines, your content will be worth less to the alliance, the later you decide to join. 

OK, we have an alliance, so now what do we do? Once the small publisher alliance is formed, two options present themselves. The first is to get competing AI companies to bid for your content. Right now, AI companies aren’t thinking about scholarly, business and industrial research, but they will. When they do, the alliance of publishers you form now could become the most valuable resource any AI company can license. And for publishers that aren’t part of the alliance, much like smaller news publishers today, the value of their content will significantly diminish. This is Economics 101, supply and demand. The only chance you have of being part of a nine-figure (or even 10-figure) deal for your content is to partner with as many publishers as possible.

Brando’s choice of words may not fit today’s politically correct ideology, but he was simply telling the apprehensive Johnny Fontaine to take control of his own destiny. I’m challenging small and midsize publishers to do the same. I have an idea that will completely change the dynamic between AI and the publishing world. This is something I’ve advocated for in every new company that I’ve worked with since leaving Thomson Reuters. Unfortunately, I’ve learned that publishers as a group are risk-averse. But I have never been more confident that, in this case, fortune will favor the bold. 

Simply put, technology comes and goes. Even generative AI, which right now is thought of as the end all, will be obsolete at some point. And it will most likely happen sooner than we think. What will always have value is content. Without content, any technology, including AI, is worthless. Publishers own the content. Positioned properly, publishers will always have all of the leverage. 

In my last article I said that shortsighted publishers sold the crown jewels for what, in the long term, will come to be pennies on the dollar, and in doing so, played right into the long-term strategy of AI companies to become the biggest publishers in the world. 

Now you have a chance to learn from the catastrophic mistake big publishers are making. Small to midsize publishers – you can control your destiny. A publishing alliance of 100 or more publishers can license AI and build your own answer driven platform. As technology changes, your platform will change with it. You’ll adapt the delivery of your content to the newly-created technology that is best suited to get your content to your users. 

This seems so simple. So, why hasn’t it happened? I think it’s because besides being an apprehensive group, publishers are too busy focusing on their little piece of the pie, that you can’t see the entire dessert buffet just across the room. And that pie you’re focusing on is getting smaller every day. As I reflect on this option, I think there is no other way to go for long-term sustainability. Without an alliance, all small to midsize publishers will disappear from the face of the earth, swallowed by technologies that realize the value is not in the technology, but in the content. 

This newsletter is designed to be informative, thought-provoking, and even controversial. It is not intended to be a sales tool for CLI. But, because of the urgency of the situation, I’ll break the rules just this once. The experience of the CLI team is best-positioned to spearhead the creation of this alliance. And while the other CLI team members won’t know of my offer to build this alliance until they read this article, there is no more experienced and visionary team to do it. By the time you read this article, I’ll already have had team members reprimanding me, but in the end I am certain that publishers and the CLI team will thank me for making this one time exception. 

A few months ago, I wrote about if you didn’t want to join ‘em (meaning Al), here’s how to beat ‘em. Unfortunately, some of the world’s largest publishers didn’t take my advice, (I’m sure they never read my article). But I am more convinced than ever, whether you license content out of the alliance or choose to be bold and license AI into the alliance, you need the alliance among publishers to maximize revenue and continue to be relevant. In a few years, you don’t want to be the one saying, “I coulda’ been a contender. I coulda’ been somebody, instead of a bum, which is what I am.”

Frank Bilotto is a licensed attorney with over 25 years of experience in commercializing intellectual property. He was instrumental in creating The World Reporter in 1999, an alliance of 10,000 daily newspapers, and the first such content alliance in the digital content space. He’s negotiated more than 1,000 intellectual property licenses with the world’s largest organizations, including Comcast, Google, BBC, NewsCorp, Gannett, ESPN, NBC, CBS, ATT, Dow Jones, Thomson Reuters, Facebook, Microsoft, Nike, Adidas, Hewlett Packard, Knight Ridder, Capitol Records, MGM and Paramount. Frank’s passion outside of content licensing is trying to love his neighbor as himself. (Unfortunately, he fails too often.)