How publishers can protect their businesses from the threat of AI

The rapid rise of artificial intelligence has sent publishers scrambling to understand the potential threats it poses to their business models and how they can best react and adapt to protect their interests.

The addition of AI-generated responses in Google’s search results pages, which could result in significantly less website traffic, is causing the most consternation. Meanwhile, chatbots such as OpenAI’s ChatGPT threaten to fundamentally change how consumers search for and interact with information, potentially disrupting publishers’ relationships with their audiences.

Toolkits spoke with David Buttle , an independent consultant and former Director of Public Affairs and Platform Strategy for the Financial Times, to understand how publishers can quantify the risks AI disintermediation could pose to their business models, how to future-proof their editorial and content strategies, and how to ensure their interests are protected in licensing negotiations with AI platforms.?

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The Economist offers its Espresso app free to students

The Economist has made Espresso, its short-form daily news app, available for free to university and high school students worldwide.?Students will be able to sign up without providing payment details, and verification of student status will be instantaneous through the third-party service SheerID.

Many subscription-first news publishers have struggled to attract younger subscribers, and offering Espresso for free could help The Economist engage younger audiences who might convert to paying subscribers down the road.?Publications such as The Wall Street Journal have also targeted students with free, subsidized, or discounted subscription offers in recent years to reach younger readers, while others such as The Washington Post say they're experimenting with "light" payment options designed to cater to younger and more casual readers.

“With the launch of our Espresso app free for students, we are signaling a commitment to the next generation of Economist readers. Providing the Espresso app at no cost to students will drive future subscriber growth and offer students—bombarded with low-quality content—fact-checked journalism that provides an independent worldview,” said Luke Bradley-Jones, president of The Economist. Students will also receive a 50% discount on a full Economist subscription.

The updated Espresso app is also intended to appeal to international audiences?and features AI-powered, in-app translations in French, German, Mandarin, and Spanish.

The FT's three ingredients for subscription success

Financial Times chief executive John Ridding highlighted three decisions the publisher made that have had a significant impact on the success of its subscription business over the past 20 years. Speaking at the News in the Digital Age conference in London on Tuesday, Ridding said the FT's business is in a "very strong position", having reached ￡500 million in revenue last year. He attributes that success to three key strategic choices that have?informed everything it's done since:

1. Charging for digital content: "We decided we should really charge for content online, which sounds kind of obvious now, but at the time was kind of radical and met with resistance. I remember going to California to explain this to some of the tech platforms, and they were actually pretty angry. It was ‘the internet wants to be free, what are you doing?’ So that pivot to charging for journalism online because underpinning everything was a belief in the value of journalism that the FT newspaper produced." Ridding added that the benefits of a subscription model have had a positive impact on the FT's business beyond revenue alone. "Even more valuable" was the data, audience insights, and?audience engagement it helped build.
2. Owning the relationship with the customer:?Ridding said a second key decision the FT made was to ensure it "owned its customer". Previously it had sold or licensed content?through aggregators such as Factiva, Lexus Nexus, and Dow Jones' newswire, but?the company wanted to "take back control." That resulted in a difficult transition period as revenue from licensing and resale agreements was cut off, but Ridding described the move as "a big roll of the dice which has really paid off".
3. Raising prices:?At the start of 2007 the FT’s daily edition cost ￡1 and by the end of 2008 it cost ￡1.80. The daily newspaper now costs ￡3.50, and a standard digital subscription is ￡468 per year. "I remember sending a note to all staff saying ‘dear everyone, the FT’s been ￡1 for five years, we’re kind of losing money, our journalism is worth a lot more than that so we’re putting the price up’", Ridding said. Price increases were initially met with skepticism from the newsroom and concerns that raising subscription prices would disrupt its advertising business, but consistent price hikes have ultimately proved essential for building a sustainable business.

Google's ad tech practices are 'harming thousands of UK publishers and advertisers’

Google may have broken UK competition law by manipulating the digital advertising market to its advantage, the Competition and Markets Authority (CMA) has found. The CMA said it believes Google has used its advertising technology to restrict competition in the market, "harming thousands of UK publishers and advertisers" in the process.

Juliette Esner, interim executive director of the CMA, said: "We’ve provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites. Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue. Adverts on these websites and apps reach millions of people across the UK – assisting the buying and selling of goods and services. That’s why it’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space."

The US Department of Justice and the European Commission have also opened separate investigations into Google’s activities in ad tech. These proceedings are currently ongoing.

DOJ vs. Google: The arguments for and against the defendant’s ad market monopoly

A month after?losing a landmark antitrust case?brought by the Department of Justice, Google will face off for a second time against federal prosecutors this week. In August, a judge ruled that Google has held a monopoly in internet search.?This time, Google is defending itself against claims that its advertising business has acted as a monopoly that’s led to higher ad prices for customers. Digiday summarized some key legal and technical arguments that will be debated in the courtroom.?

WSJ offers advertisers performance guarantees timed to the election

The Wall Street Journal is offering advertisers a performance guarantee around the upcoming U.S. presidential election in an effort to prevent advertisers from pausing their ad campaigns during the period. The guarantee will be offered for impressions measured between October 15 and November 15.

Confessions of a chatbot helper

Journalists and other writers are employed to improve the quality of chatbot replies. The irony of working for an industry that may well make their craft redundant is not lost on them.

More from Toolkits

How Apple Intelligence could impact publishers: Publishers are evaluating how Apple’s new on-device AI features might impact their products and businesses.

Micropayments’ big moment: Publishers’ skepticism is softening as their subscription businesses mature and the thirst for new marketing and monetization options becomes more acute.

The Apple News opportunity for publishers: Publishers are increasingly looking to Apple’s news aggregation product to reach and engage new audiences.

How The Information is combating involuntary subscriber churn: Efforts to identify and address weaknesses in its payment architecture are helping maximize subscription revenue.

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