The emerging AI content licensing market puts news publishers in a "double bind," a new report warns

AI content licensing for news publishers is developing through marketplaces and deal structures that are difficult to revise once normalized. Big Tech companies that build commercial AI products also reduce publisher site traffic, while simultaneously dictating how alternative revenue will work. The report describes a double bind where the same gatekeepers occupy both sides of the value chain. New licensing marketplaces often take intermediary revenue cuts, including startups and Big Tech-operated platforms. Examples include Cloudflare’s pay-per-crawl marketplace, where publishers set rates for each bot crawl, and Microsoft’s Publisher Content Marketplace, which uses pay-per-use pricing for rights-cleared content sold to Microsoft and potentially other AI developers.

"News publishers are currently in a “double bind”: The same big tech companies that are developing commercial AI products and stripping news publishers of site traffic are the ones dictating what alternative revenue will look like. As the authors put it, Big Tech is “occupying both sides of the value chain simultaneously.”"

"The deal structures, price precedents, intermediary take rates, and governance norms taking shape now will be difficult to revise once they are normalized. “The question of whether publishers, journalism, or creators of any sort can make a credible collective claim before market structures crystallize will not stay open indefinitely.”"

"One of the most interesting sections of the report is a deep dive into new AI content licensing marketplaces, which often take a cut of the revenue they bring in for publishers. This includes new startups like Sphere.ai, ScalePost, Defined, and Tollbit, but also ones operated by Big Tech companies."

"Last summer, Cloudflare, which services about 20% of global web traffic, launched its “pay-per-crawl” marketplace, which allows publishers to set rates and charge AI companies each time one of their bots crawls their content. In February, Microsoft announced its Publisher Content Marketplace (PCM), which follows a “pay-per-use” model that allows publishers to sell “rights-cleared content” at set prices to Microsoft, and potentially to other AI developers."

Read at Nieman Lab