Publisher Monetization Briefing: May 13

Welcome back to your weekly briefing on how publishers are building sustainable businesses. This week...

How OpenAI is pitching deals to publishers?

Details are slowly emerging about how OpenAI has been pitching licensing arrangements to publishers. Here’s what we know about its “Preferred Publisher Program” so far:

• Training data: OpenAI can use participating publishers’ content to train its large language models.
• Greater visibility for publishers: Content from participating publishers receives priority placement and “richer brand expression” in ChatGPT responses via three different linking mechanisms. A “hover” treatment will hyperlink keywords in responses and reveal clickable information when hovered over with a mouse cursor; an “anchor” treatment will include branded and clickable buttons to publishers’ sites below responses, and an “inline” treatment will insert pull quotes from publishers’ content directly within responses accompanied by a branded link to publishers’ sites.
• Financial terms: Publishers will be paid a fixed fee for allowing OpenAI to access their content archives for training purposes, while separate performance-based payments will be made depending on how much users engage with publishers’ content in ChatGPT responses. Total payouts will combine guaranteed and variable values to arrive at annual payouts to publishers, AdWeek reported.
• Ongoing collaboration: OpenAI’s publisher deals so far have all included references to ongoing collaboration that will supposedly see OpenAI collaborating with publishers to create new products and services oriented around their content.

OpenAI’s deal streak with publishers continues

OpenAI’s deal streak with publishers continued?last week?with news of a content licensing agreement with IAC-owned Dotdash Meredith. The generative AI company now has the right to ingest and surface content from over 50 individual publications thanks to deals with various global publishers.

Financial terms of those deals have not been disclosed, but publishers have positioned them as wins for their businesses and as evidence that OpenAI fairly values access to their content.?

However, questions remain around how much leverage publishers realistically have in licensing negotiations, and whether publishers are essentially taking whatever they can get from OpenAI for fear of “missing the boat” and being shut off from its users altogether.

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OpenAI will let publishers opt out of AI training

OpenAI announced last week it’s developing a tool called Media Manager, which it said will enable publishers and other content owners to flag copyrighted material to the company and to specify whether or not they want their work to be used to help train its models.

“We believe AI systems should benefit and respect the choices of creators and content owners,” a post announcing Media Manager read, adding, “We’re continually improving our industry-leading systems to reflect content owner preferences, and are dedicated to building products and business models to fuel vibrant ecosystems for creators and publishers.”

OpenAI says Media Manager will use machine learning research to build a first-ever tool of its kind to help identify copyrighted text, images, audio, and video across multiple sources and reflect creator preferences. It’s collaborating with creators, content owners, and regulators to develop the tool and its goal is to have it in place by 2025, it said.

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The Toolkits Show: OpenAI’s licensing deals raise questions for publishers?

We’re back with another episode of our new podcast making sense of the major themes, trends, and developments shaping the business of content.?This week:?

• Open AI is on a licensing streak – but this raises more questions than it answers for publishers.
• LinkedIn says it wants to do more to help publishers monetize, and has a new program designed to help them do so.

LISTEN NOW ? Apple Podcasts | Spotify | Web

Are news companies sitting on a “gold mine” of AI training data?

As more major publishers strike licensing deals with AI platforms, questions are mounting about whether those arrangements will help usher publishers transition fruitfully into a new era of content delivery and discovery, or if they’re being backed into a corner and being forced to take whatever they can get.

Sonali Verma, INMA’s generative AI initiative lead, argues it's the former. Generative AI platforms are desperately trying to get their hands on as much quality content as possible to train and improve their models as competition among AI companies intensifies, she says, and publishers should therefore negotiate carefully.

“If we are thinking of deals rather than lawsuits, we should negotiate hard when it comes to the rights to use our content. We should be talking to multiple GenAI platforms or marketplaces, and we should take our time to understand how they will work. We should not sign any agreements that limit our ability to sell to more than one generative AI provider unless the price is right,” she writes.

Some publishers are in stronger negotiating positions than others, however, as we noted last week. As more licensing deals are announced, some publishers worry they could “miss the boat” altogether if they don’t get in on the action now.

Subscriptions fuel growth for News Corp and The New York Times

NYT said it added 210,000 digital subscribers last quarter, largely driven by new customers for its “bundle” product which includes access to its news, games, and sports coverage through The Athletic. Profit for the three months was $76.1 million, an increase of 40.9% from a year earlier, propelled both by the increase in subscribers and by higher average revenue per user.

While its digital subscribers continued to grow, The Times’s ad business continued to decline. Overall ad revenue decreased 2.4% from a year earlier, the company said, but digital advertising increased 2.9% thanks largely to growing ad revenue at The Athletic.

The Athletic, which The Times bought in 2022 for $550 million, had 4.99 million subscribers at the end of the first quarter, an increase of about 1.72 million from a year earlier. Those numbers include users who pay for The Athletic as a stand-alone subscription or have access to The Athletic through their bundle subscription.

News Corp’s third-quarter results also revealed strong subscriber growth contributing to revenues in its business information division Dow Jones. Digital subscriptions to the Wall Street Journal grew 13% to 3,715,000 and investment news service Barron’s grew digital subscriptions by 26% to 1,221,000, the company said.

In the U.K., The Times, Sunday Times, and Times Literary Supplement reported total digital subscribers up 38,000 year-over-year to 582,000, but advertising across News Corp‘s news division, which includes The Sun, New York Post, and The Australian, was down 13%.

News Corp also said it has renewed its three-year commercial deal with Google and would be extending it to allow the use of its content to help train Google’s AI systems. CEO Robert Thomson said: “We are in the midst of an exponential digital revolution, and our own company has continued to change significantly and profitably. Importantly, we are working to promote our quality journalism in the age of generative AI, and are gratified that the most enlightened leaders in the industry appreciate the commercial and social value of that content.”

Building resilience in the evolving news and media landscape

Accompanying its new report on Building Resilience, FT Strategies is hosting a free webinar. Expert speakers will guide you in finding your diversification 'frontier' and implementing best practices, with examples from the Financial Times and other leading news and media organizations. Register now.

Apple readies ad-blocking

Apple is preparing to include an AI-based privacy feature in the Safari browser in the next iOS 18 software update that will remove ads and other unwanted website content, the FT reported. Apple already blocks third-party cookies in Safari, but blocking all ads directly could have significant implications for publishers. It might also help push them toward Apple’s publisher products including Apple News and Apple News+. ?

The revenge of the homepage?

The idea of audiences seeking out publishers' homepages is a nice one, but the reality is there's little evidence to suggest it's likely to happen to a meaningful extent for the majority of publishers (other than publishers saying it will.) It could be true for a handful of large publishers, but for most others, it could be wishful thinking. ?

Google's latest algorithm update spells bad news for most publishers

Google’s latest core algorithm update has dealt yet another blow to publishers striving to improve their search visibility. It follows a string of recent updates that have led most news publishers to fall down the search giant’s rankings. Data from SEO tool Sistrix suggests that of 70 leading news publishers, all but 15 saw falls in their visibility score. ?

Facebook’s referral traffic for publishers down 50% in 12 months

Facebook referral traffic continues to plummet for news publishers as Meta’s turn away from the news industry continues. Data from publisher analytics firm Chartbeat and digital intelligence platform Similarweb show just how steep that fall has been: Aggregate Facebook traffic to a group of 792 news and media sites that have been tracked by Chartbeat since 2018 shows that referrals to the sites have plunged by 58% in the last six years from 1.3 billion in March 2018 to 561 million last month.

More from Toolkits

Original reporting is table stakes for publishers in an AI world: Publishers are recognizing their futures hinge on the ability to uncover new information and contextualize and present it in ways that AI cannot.

The Financial Times reorients its business around ‘global paying audience’: The new approach is designed to help grow direct audience revenue beyond its core journalism offerings and across its broader portfolio of products and services.

LinkedIn allows publishers to bake pre-roll ads into organic video content: A new program called Sponsored Editorial Content lets publishers stitch pre-roll ads into their organic video content on the platform.

‘Lifting all boats’: Publishers explore total revenue optimization: Publishers are thinking carefully about how monetization opportunities should be prioritized to extract as much revenue as possible from their audiences.