5/30/23: News execs weigh deals with AI companies

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Sara Fischer, Author of Axios Media Trends

News companies are exploring ways to structure deals with artificial intelligence firms that could help them reap the benefits of AI's explosive consumer adoption, rather than be overcome by it.

Why it matters: A regulatory approach to managing deals between AI companies and news firms seems unlikely in the near term, if at all, leaving the industry to negotiate on behalf of itself.

  • “I don’t think there’s going to be any real regulation of AI anytime soon,” News Corp. CEO Robert Thomson told a group of news executives at a global conference for the International News Media Association last week.

Details: Thomson said that based on his experience in dealing with Washington, "There won’t be any coherent, cogent response in a regulatory way, so ... it’s up to us — journalists to write about it, to explain it, and media companies to advocate where appropriate."

In a Q&A session during the conference last week, Thomson noted that he met with OpenAI CEO Sam Altman a few months ago to discuss how AI training models work.

  • “Unless at the front end you define what the principles are, you are on the digital defensive,” he said.

State of play: The most pressing problem the media industry is facing in the wake of AI's explosion is the impact it will have on its traffic, particularly from search engines. Other challenges, such as copyright protections, are also being debated among industry executives.

  • For publishers already beginning to use AI, coming up with a uniform way to disclose AI's contribution to their work is a hotly debated issue. Some websites, such as CNET, have already been criticized for publishing content without disclosing to readers that it was created in part using AI.

Zoom out: The media industry today is governed by several different trade groups that have been at the forefront of the news industry's efforts to collectively bargain with Big Tech firms.

  • The News/Media Alliance, the largest trade group for newspapers in America, released a set of AI principles last month. They say that unlicensed use of publisher content by generative AI companies — to train their algorithms, surface the content or synthesize it — is "intellectual property infringement."

Between the lines: Most major media companies are trying to figure out how to leverage AI, even if it’s unclear at the moment how or if the industry will be able to collectively bargain deals with AI providers.

  • The Washington Post, Financial Times, Insider and New York Times have all introduced task forces or internal working groups to figure out how to responsibly leverage AI technologies.
  • Axios CEO Jim VandeHei wrote in a piece last Thursday that Axios' leadership has "spent months talking to the people building the new AI technologies, and reflecting on how they can help — or harm — your ability to get high-quality content you can trust."
  • BuzzFeed is already starting to use AI to develop quizzes.
  • Be smart: Thomson and News Corp. have led the charge to lobby global governments for regulatory action around fair competition.
  • A generative AI deal "can't just be about us," he said. "It needs to create a benchmark. ... It can't be a sweetheart deal."
  • A News Corp.-backed bill became law in Australia in 2021, paving the way for a slew of similar bills to be considered in other countries, such as Canada and New Zealand. In the U.S., a bipartisan group in Congress in April reintroduced a journalism antitrust bill for the fourth time in four years.

The big picture: News companies have a mixed track record of negotiating with Big Tech firms.

  • Dozens of media firms were able to broker deals with Meta, then Facebook, and Google to license their content in news products beginning around 2019 — more than a decade after Facebook first introduced the News Feed, as the tech industry began to face rising regulatory pressure.
  • But Meta has since walked away from news and said it wouldn't renew those payments. Google has struck agreements with some U.S. publishers to license their content as a part of its News Showcase product, but negotiations with others have reportedly stalled over deal terms.

What to watch: Speaking at the same conference as Thomson, The Atlantic CEO Nick Thompson remarked that any AI regulation needs to be carefully considered to make sure it doesn't lock in the power of incumbent companies.