By: Frank Bilotto
For the past year, I have been unabashedly critical of publishers that are licensing their content to companies with AI technologies. With each new licensing agreement, AI companies are taking giant leaps forward to ultimately replacing publishers. Many of you are old enough to remember when Google first publicly released their mission statement sometime around 1999, “To organize the world’s information.” At the time, I scoffed at the idea. “What hubris,” I thought. Well, 15 years later, Google pretty much did it. While aggregators of premium content continued business as usual, battling over shares of a $32 billion dollar market, Google became a $500 billion company.
The Great Replacement Theory
Although no AI company has yet made it public, I am supremely confident that the long term goal of companies like Open AI and Google have the mission to become the biggest publishers in the world. Like Google was a search technology with no valuable content in 1999, AI was a technology with no valuable content in 2023, except what they were illegally scraping from the internet. Slowly and steadily, prominent AI companies are stockpiling content, providing major publishers with short term cash. Balance sheets look better today, but publishers can’t possibly be thinking about tomorrow. What happens when AI generated content begins competing for and winning market share? How will publishers continue to produce original content with shrinking revenues? What happens when the revenues of AI companies grow, and financial pressures force publishers to begin producing less original content?
It doesn’t require a crystal ball to see that AI companies will hire their own content creators to produce original content for the sole purpose of ingesting the new content into its machine learning engines. And they’ll be able to create original content at significantly less cost than the publishers who create content today. There will be no need for the army of staff that publishers have to review, edit and approve every new piece of content. In fact, even content creators working for AI companies won’t need to review, edit and rewrite their own work. Creators won’t even need to write in complete sentences. They’ll simply need to create original content, no matter how raw. The AI will make sense of all of it. In my working lifetime, and I don’t have many years left, if AI companies continue to buy content at the current rate, there is little doubt that AI companies will become the largest publishers in the world.
So, what are publishers to do? Unlike the major aggregators 25 years ago, who should have put up web crawlers and nipped Google in the bud, publishers should be developing their own AI technologies and become the major producers of AI generated content. The big publishers can go it alone, and smaller publishers can join forces to embrace AI technology and start producing their own AI generated content.
My Nine Point Plan.
So, why should publishers develop AI technologies in house, and begin producing their own AI generated content? I think there are several obvious and key reasons:
1. By developing their own AI, publishers maintain full control over how their content is used, preventing misuse or over-exploitation by third parties. This also enables them to decide how and when their content is incorporated into generative AI models, protecting their intellectual property from dilution.
2. Licensing content to external AI companies often comes with fixed or limited fees. By building their own AI, publishers can create new revenue streams through AI generated content and products. They could monetize AI tools directly, offer tailored services to customers, or develop subscription models around AI-generated outputs.
3. A custom-built AI system aligned with a publisher’s specific needs and audience will offer a competitive advantage over AI companies attempting to compete for their audience. Publishers can fine-tune AI tools to create high-quality, unique content that resonates with their target audience, setting them apart from competitors using more generic AI models.
4. Developing their own AI allows publishers to safeguard sensitive data, ensuring that it is not shared with or processed by third parties. This also helps comply with regulations like GDPR or CCPA, as publishers can better control how user data is handled.
5. Publishers can design AI models specifically suited to their editorial standards, workflows, and content types. Custom AI can be tailored for niche industries (e.g., educational content, financial information, patent information, specialized journalism, etc…), which might not be served well by generalized AI models built by third-party companies.
6. Investing in in-house AI development allows publishers to build proprietary technologies and capabilities, enhancing their expertise in AI. This positions them as technology leaders, opening up further opportunities in the tech landscape beyond just content creation.
7. Relying on third-party AI companies for essential technology comes with risks, such as price increases, changes in terms of service, or potential disruption if the provider ceases operations. Developing their own AI gives publishers long-term control over their tech stack and future-proofing against such risks.
8. Publishers have ethical standards when it comes to how content is created, shared, and used. By developing their own AI, they can ensure that the generated content adheres to their ethical guidelines, reducing the risk of biased or harmful content being produced by external AI systems.
9. Most importantly, by developing their own AI technologies, publishers will be building a sustainable business model for the future. I acknowledge that they’ll get pushback from their content creators, not unlike the writers strike in Hollywood last year. But I believe publishers have no choice if they want to be around in 10 years.
History doesn’t have to repeat itself.
In 2000, I gave a speech to a room full of aggregators, practically begging them to put up a web crawler to take control of the retail search space when every research librarian didn’t trust and had no use for the new retail search engines. I was almost laughed out of the room. Five years later I spoke to the same audience and told them it was too late to put up a web crawler. The game was over. Now, they had no choice but to learn how to play in Google’s world. I am begging publishers today. Stop licensing your content to AI companies and launch your own generative AI technologies. If you don’t, I’m not sure there will even be a place for you to play in the AI world in five years.
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.)
