Media Briefing: Tech credits count for (some) compensation in publishers’ AI deals

As part of deals with AI companies, publishers are also often being compensated in the form of subsidized access to the companies’ large language models.

“That’s one of the positive aspects of working with some of these [AI] companies: If you go into a partnership, yes, you’re going to get paid, but then the number of credits that you can get to start to test, tool around, build your own localized models is really interesting,” said one publishing executive in one of the closed-door town hall sessions during the recent Digiday Publishing Summit.

Those technology credits are their own form of currency. Albeit less valuable than actual dollars – potentially far less valuable, for reasons we’ll get to – the credits effectively underwrite publishers using the LLMs to power their own AI-based tools.

“If you are partnered with the platform, you can utilize chat in your on-site search or use their technology to create your own chatbot with editorial content,” said another publishing executive.

Those uses can be particularly important. The rise of ChatGPT, Perplexity, etc. have the potential (to say the least) to become the latest platforms to disintermediate publishers by offering better paths for discovering publishers’ content. Publishers using the LLMs to roll out their own chatbots or improve on-site search can help publishers to maintain a direct relationship with their audiences. 

Publishers using the LLMs can help publishers keep incentives aligned with the AI companies (at least for a time).  One publishing executive who spoke with Digiday during DPS said that some AI companies are expressing strong interest in getting publishers to be using their LLMs, and this publisher suspected the companies’ reasoning is that doing so would effectively serve to expand the LLMs’ training.

Of course, all of that assumes enough people use the publishers’ own AI chatbots and AI-based on-site search. Which remains an open question.

“I’m curious, to the point of utilizing those features, if anyone’s had success with implementing those,” asked one publisher during a town hall session.

No one in the room answered. 

Instead, another publisher said their company is in the process of developing a chatbot, but this person expressed some reservations about its potential. 

“We’re building a chatbot, actually going through the vectorization process, building those embeddings for all of your archive. And you put out a beautiful chatbot. And nobody uses it, which is devastating when you look at the numbers and go, ‘Oh wow, five people used this today, and I spent three months building it,’” said this publisher.

What we’ve heard

“Nobody should be stuck paying for a service they no longer want.”

— Federal Trade Commission chair Lina M. Khan in announcing the regulator’s rule requiring companies, including publishers, to make it easier for people to cancel subscriptions

Numbers to know

£510 million ($663.5 million): How much revenue Financial Times generated in 2023.

>5,000: Number of people that Associated Press will have working on the night of the U.S. presidential election.

155: Number of newsroom employees that BBC plans to lay off.

$63,000: The updated minimum salary for The New Yorker staffers as a result of Condé Nast’s new agreement with the publication’s union.

12: Number of print issues that The Atlantic plans to publish this year.

What we’ve covered

Amid green shoots of recovery in ad tech investment, a note of caution is warranted:

• Scope3’s $25 million funding round and Zeta Global’s $250 million purchase of LiveIntent has stoked enthusiasm among dealmakers.
• But some industry members are speculating that funding rounds and M&A announcements will be more modest in the near term.

Read more about ad tech investment here.

Meet YouTuber Brandon B, who believes agencies shouldn’t worry about AI:

• The largest European VFX creator on YouTube has more than 14 million subscribers and 10 billion video views.
• He launched his own production company, which has worked with brands including Marks & Spencer.

Read more about Brandon B here.

Women’s soccer and publisher Footballco turn to creators to score with brands:

• The publisher has a team of five creators.
• Its vertical Front Three prioritizes YouTube and to a lesser extent Facebook and Snapchat.

Read more about Footballco here.

Some worry the DOJ is ‘fighting yesterday’s war’ in ad tech antitrust case:

• Advertising Week attendees wondered whether breaking up Google’s ad tech business could do more harm than good.
• Some advocated for severe financial penalties instead of breakup decrees.

Read more about the DOJ vs. Google here.

What we’re reading

The Washington Post + Punchbowl News?:

The newspaper publisher is in acquisition mode, and the political news outlet is among the companies that The Post has met with as it looks to kickstart growth, according to The New York Times.

How the election is hurting diverse-owned publishers:

Advertisers are suppressing their spending with diverse-owned publishers until after the U.S. presidential election amid a broader pullback among companies from their previous DE&I commitments, according to Ad Age.

The New York Times vs. OpenAI:

The Gray Lady’s lawyers are sifting through OpenAI’s source code to determine to what extent the ChatGPT maker’s underlying large language model does or does not adhere to “fair use” when crawling the publisher’s copyrighted content, according to Business Insider.

The New York Times vs. Perplexity:

Amid its ongoing lawsuit with OpenAI, The Times has also taken aim at Perplexity for the AI-based search engine accessing the publication’s content in an alleged violation of copyright law, according to The Wall Street Journal.

G/O Media vs. Paste Media:

After G/O Media sold Jezebel and Splinter to Paste Media last year, the former publisher has now filed a lawsuit alleging the latter breached its contract following the deal, according to Adweek.