The news: Google signed a publishing deal with The Associated Press (AP).

• The AP will give Google a “feed of real-time information” to improve its Gemini chatbot and keep its outputs up to date.
• Google didn’t specify how much the deal is worth, whether it will attribute content to the AP, or if it will provide links back to original articles.

AP on the genAI train: The AP, which operates as a nonprofit and pulled in 82% of its 2023 revenue from content licensing, also signed a deal with OpenAI in 2023.

Though some news and media companies have limited AI use of their content—with concerns about attribution and usage in generative AI (genAI) outputs—AP is jumping in head first.

Traffic and revenue droughts: Paid content licensing deals could help struggling media companies compensate for decreased web traffic, which is exacerbated by younger generations preferring social media and search engines for news consumption.

Forty-six percent of Americans aged 18 to 29 use social media as their main source of news, per Pew Research, only 18% rely on news websites and apps, and 2% use print media.

While publishing companies initially feared decreased traffic due to AI summary features like Google’s AI Overviews, so far it doesn’t appear that they’ve taken a hit.

Reputational risks: Google’s efforts to partner with media companies, rather than use outside content without permission, could help it avoid legal action and damage to its brand.

Case in point: Perplexity, a rising AI player, faces ongoing content theft allegations from major publishers that could hurt its ability to obtain licensing partnerships in the future.

Although deals could help deter copyright infringement lawsuits, they aren’t cheap: OpenAI’s multiyear deal with News Corp is worth about $250 million, and its deal with (our parent) Axel Springer cost OpenAI tens of millions of euros, per Bloomberg.

Our take: Web crawlers are already scraping publishers’ content, and deals like Google and the AP’s can help them ensure they’re being compensated and avoid the whack-a-mole game of copyright infringement lawsuits.

However, the high price tag of content licensing deals could make them inaccessible to smaller AI players, limiting competition in the market.

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