Disney’s licensing deal with OpenAI is the latest example of a media company making a smart move in the fog of AI economics, and this also applies to quality news and information.
The key question is: What kind of content creation will the AI economy support? As Cloudflare CEO Matthew Prince argues, this is an opportunity to right the wrongs of internet clickbait.
“I hope we get a lot more content that’s really interesting, long-form, and knowledge-producing. That’s what we all want,” he said recently on the Hard Fork podcast.
But there are also many smart people who caution against media companies, especially news organizations, giving away farms in such deals. That includes my former boss, Jessica Lessin, who points out that her industry was screwed over by big tech companies in the Web 2.0 era.
But Web 2.0 companies didn’t need high-quality content, and technology companies realized they could get clickbait for little money. On the other hand, when using AI chatbots, people want reliable answers that are rooted in trustworthy content. AI companies know this. Incorrect or unpredictable responses pose an existential threat to the industry.
This difference is why these content deals need to be done as one-time, multi-year contracts, rather than programmatic structures that automate rewards for individual pieces of content.
People are always thinking about how to beat algorithms, and the losers are those who put the most resources into content creation. A proper structure for evaluating an entire body of work or a catalog is more important than the amount, at least initially. If both parties get value, the price will increase over time.
