Meta’s superintelligence, Amazon’s NYT deal, upfronts + publishers’ & IAB Tech Lab’s AI summit

Summary

Podcast Summary: The Digiday Podcast Episode: Meta’s Superintelligence, Amazon’s NYT Deal, Upfronts + Publishers’ & IAB Tech Lab’s AI Summit
Release Date: August 5, 2025
Host/Authors: Kameka McCoy & Tim Peterson

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1. Introduction

In this episode, hosts Kameka McCoy and Tim Peterson delve into the pressing issues at the intersection of media, AI, and publishing. The discussion navigates through Meta's recent superintelligence memo, Amazon's licensing deal with The New York Times, the state of television upfronts, and the collaborative efforts between publishers and AI companies facilitated by the IAB Tech Lab.

2. AI Advancements and Concerns

AI-Generated Content

The episode kicks off with a lighthearted yet insightful conversation about AI's ability to create deceptive content. Tim shares an anecdote about a viral video featuring bunnies on a trampoline, which was later revealed to be AI-generated.

• Tim Peterson [02:43]: "There is a 404 Media story that popped up in one of my newsletters this morning about like an, hey, that viral bunnies on a trampoline video you've seen this week? Those are AI."

This incident underscores growing concerns about media literacy in the age of generative AI, where even benign content can be manipulated, leading to misinformation.

Meta’s Superintelligence Memo

The discussion shifts to Meta's latest initiative spearheaded by Mark Zuckerberg—the personal superintelligence memo. This ambitious project aims to integrate AI deeply into personal devices, potentially transforming user interaction.

• Mark Zuckerberg (Referenced) [09:43]: "Meta’s vision is to bring personal superintelligence to everyone."

The hosts critically analyze Zuckerberg's vision, comparing it to the AI-driven narrative of the movie "Her," and ponder the implications of such pervasive AI integration.

• Kameka McCoy [10:12]: "I still do not have a clear sign of what this means in terms of super intelligence, but I would imagine that it's likened to, like, AI agents, the same conversations we're having there."

3. Television Upfronts in the Current Economy

Upfronts, the period when TV networks negotiate advertising commitments, are facing unprecedented slowdowns due to economic uncertainties.

• Tim Peterson [04:32]: "And as Bergey reported in last week's media buying briefing, it's still in the process of wrapping up, but also the fact that for a lot of these companies, they didn't see huge increases year over year."

The hosts discuss how major networks like Disney, NBCU, Fox, and Paramount are experiencing flat or slightly increasing revenues, with live sports remaining a significant revenue driver.

• Kameka McCoy [06:25]: "So it's live sports seems to be the bright spot here."

Disney’s commitment to streaming remains steady but shows signs of plateauing, highlighting the shifting dynamics in advertising investments.

• Tim Peterson [07:41]: "It's roughly the same numbers Disney's been saying for the past three years. So this is like the third year running in which it's been at that like 40%."

4. Amazon’s Deal with The New York Times

A significant portion of the episode is dedicated to Amazon's licensing agreement with The New York Times, which has stirred discussions about the sustainability of such deals for publishers.

• Tim Peterson [16:43]: "According to the Wall Street Journal, Amazon's paying the New York Times $20 to $25 million a year to license its content."

Despite appearing substantial, this deal represents less than 1% of The New York Times' overall revenue, raising questions about the long-term viability of such arrangements.

• Tim Peterson [17:17]: "This isn't going to keep the lights on for the New York Times."

5. Publishers vs. AI Companies: The IAB Tech Lab Meeting

The conversation deepens with insights from Seb Joseph and Sarah Guaglioni regarding the recent IAB Tech Lab meeting held on July 23. Over 80 executives from publishers and AI platforms convened to address the challenges posed by AI scraping of content.

Key Points from the Meeting

• Seb Joseph [21:05]: "It's a way to kind of block AI platforms from scraping content unless they're paying for it in some way."

The proposed solution revolves around the LLM Content Ingest API, a technical specification aimed at regulating content access by AI companies. However, major AI players like OpenAI and Perplexity absent from the meeting cast doubt on the effectiveness of these initiatives.

• Seb Joseph [23:01]: "OpenAI perplexantropic weren't at the meeting last week, despite the Tech Lab reaching out."

Challenges and Publisher Strategies

Publishers are pushing for a united front—emphasizing control, consent, credit, and compensation when negotiating with AI entities.

• Seb Joseph [32:49]: "Publishers are coming to the table of what's being called, or at least we've kind of coined it, four Cs: control, consent, credit, and compensation."

Sarah emphasizes the need for stability and sustainable revenue models beyond one-off licensing deals.

• Sarah Guaglioni [38:38]: "Publishers have said that those big checks are great, but there really needs to be stability going forward."

6. Future Outlook

The hosts and guests express a mix of skepticism and cautious optimism regarding the trajectory of publisher-AI company relations.

Regulatory Pressures

Antitrust concerns and regulatory scrutiny, especially in the EU, are beginning to shape the negotiation landscape.

• Seb Joseph [36:03]: "There is regulatory sort of pressure that is increasingly starting to coalesce around this kind of part of the market."

Potential Business Models

Discussions highlight evolving compensation models, such as pay-per-call and pay-per-query, aimed at fairly compensating publishers for their content.

• Seb Joseph [44:07]: "There's a recognition that the query-based payments also need to be part of the mix, something more tiered and dynamic."

Organizational Challenges

The difficulty in forming a cohesive, united front among diverse publishers raises concerns about the efficacy of collective bargaining.

• Tim Peterson [42:08]: "If you've got long tail publishers who are like, absolutely, we've got to be on board together and you've got your flagship publishers being like, well, I've got my deal, so know what to tell you guys."

7. Conclusion

The episode wraps up with a forward-looking perspective, acknowledging the complexities and ongoing struggles in balancing the interests of publishers and AI companies. Hosts highlight upcoming events like the virtual town hall on August 22 and the Digiday Publishing Summit in September, emphasizing the continuous evolution of these critical industry conversations.

• Tim Peterson [45:26]: "And at least these conversations start happening."

The hosts leave listeners with a sense of cautious hope, recognizing that while challenges abound, the dialogue and collaborative efforts are essential steps toward sustainable solutions in the digital media landscape.

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Notable Quotes:

• Tim Peterson [02:43]: "There is a 404 Media story that popped up in one of my newsletters this morning about like an, hey, that viral bunnies on a trampoline video you've seen this week? Those are AI."

• Mark Zuckerberg (Referenced) [09:43]: "Meta’s vision is to bring personal superintelligence to everyone."

• Kameka McCoy [10:12]: "I still do not have a clear sign of what this means in terms of super intelligence, but I would imagine that it's likened to, like, AI agents, the same conversations we're having there."

• Tim Peterson [07:41]: "It's roughly the same numbers Disney's been saying for the past three years. So this is like the third year running in which it's been at that like 40%."

• Seb Joseph [21:05]: "It's a way to kind of block AI platforms from scraping content unless they're paying for it in some way."

• Sarah Guaglioni [38:38]: "Publishers have said that those big checks are great, but there really needs to be stability going forward."

• Seb Joseph [44:07]: "There's a recognition that the query-based payments also need to be part of the mix, something more tiered and dynamic."

• Tim Peterson [42:08]: "If you've got long tail publishers who are like, absolutely, we've got to be on board together and you've got your flagship publishers being like, well, I've got my deal, so know what to tell you guys."

• Tim Peterson [45:26]: "And at least these conversations start happening."

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This summary was crafted to provide a comprehensive overview of the key discussions and insights shared in the August 5, 2025, episode of The Digiday Podcast. For a deeper dive into the topics, listening to the full episode is recommended.

Transcript

[Tim Peterson]

Foreign.

[Kameka McCoy]

Hello, hello, and welcome to another episode of the Digiday Podcast, a show about the business of media and marketing. I'm your co host, Kameka McCoy, senior marketing reporter here at Digiday.

[Tim Peterson]

And I'm Tim Peterson, executive editor of Video and Audio Digital Media. How's it going, Kamiko?

[Kameka McCoy]

I thought you were going to say, what's up? And I was prepared to say nothing but the rent.

[Tim Peterson]

And also no so much. I feel like I've gotten completely AI pilled this week, in part because I'm working on a couple explainer videos related to AI agents and model context protocol, in part because we had Seb Joseph, our executive editor of news, and Sarah Guaglioni, our senior media reporter, on the show for this week's featured segment to talk about this big meeting that happened between IAB Tech Lab and publishers and some, but not all, AI companies, just about what publishers can and should be doing in order to get the AI companies to come to the bargaining table, but also for publishers to be able to control their content. And then we've got Meta with Mark Zuckerberg's personal superintelligence memo that went out, which we're going to talk about in the news segment. We're also going to talk about the New York Times deal with Amazon and some new reporting from the Wall Street Journal on how much Amazon's pain the New York Times. And then, Kimiko, have you seen this video of bunnies jumping on a trampoline?

[Kameka McCoy]

I have not.

[Tim Peterson]

Okay, I'm gonna send it to you right now because this is also, like, a big reason why I'm reeling this morning as we speak, so I'll slack it to you.

[Kameka McCoy]

Not a bunny cult.

[Tim Peterson]

So this video popped up in my TikTok feed earlier this week. A lot of weird animal videos pop up in my TikTok feed earlier this week. And it's just a bunch of bunnies jumping on trampoline in the middle of the night. And, like, I mean, I don't know about your feeds. I see ring camera videos in my feeds all the time. So when I saw this, I didn't think much of it. I also live an area where we have a lot of bunnies around, so it's not like out of the realm for me to see. Bunny. I saw three bunnies this morning when I drove to the pool to get a shot.

[Kameka McCoy]

Are you about to tell me that these are AI Bunnies?

[Tim Peterson]

These are AI bunnies. I had no idea.

[Kameka McCoy]

They look so real.

[Tim Peterson]

There is a 404 Media story that popped up in one of my newsletters this morning about like an, hey, that viral bunnies on a trampoline video you've seen this week? Those are AI And I would like to think I am media literate. I would like to think I am a cynical person. I was completely fooled by this video. And as I think about it, I think, like, this is going to be the problem. It's not going to be generative AI videos of the Pope or of Trump or anything like that. It's going to be like the very benign ring camera videos that are just gonna really mess with me.

[Kameka McCoy]

Well, given that we both got got you recently and me within the last 30 seconds, it makes clear sense why Zuckerberg's got a personal statement out on why he thinks that AI is not just like the next frontier, but why they're shelling out so much cash on it.

[Tim Peterson]

Yeah. So should we start with that? Because we also want to talk about, like, upfronts, you know, starting to wrap up. Then the New York Times deal with Amazon. But maybe since we're on the.

[Kameka McCoy]

That was when I said nothing's up but the rent. That was where I was going with that. In addition to what's not up is the gdp. It has slowed.

[Tim Peterson]

Okay, okay. So let's get out of AI land for a second and move into TV land, which used to be a TV network. I don't know. Dream of Genie.

[Kameka McCoy]

Those were good times. Not to bring in an Usher, bad times. But upfronts has wrapped up. I know that's your beat, your baby. So talk to me a little bit about that, especially in the context of when things are slower right now as far as spending.

[Tim Peterson]

Well, and that's the thing with the upfront, because they are starting to wrap up. Some of the major networks have wrapped up. So Disney announced this week that it's closed its upfront negotiations for the year. NBCU announced two weeks ago that it had wrapped up. Fox said last week that it had wrapped up the majority of its upfront negotiations. Paramount said this week that it's close to wrapping up. So it's. We're in August now, and a lot of these major TV networks haven't wrapped up their upfronts yet. Where in past years the upfront wrapped up like before the 4th of July in 2021 and 2022, I think it was both NBCU and Disney and maybe even Fox had announced in June that they had wrapped up their upfront negotiation. So we were expecting, everyone was expecting our senior media buying editor, Michael Berge, who's been all over this, has been reporting on, like, why the industry is expecting it to be a slower upfront because surprise, surprise, tariffs, economic uncertainty, all the buzzwords we want to throw at it. And that seems to have very much played out, not just with the pace of the upfront and how long it's taken for the upfront to wrap up. And as Bergey reported in last week's media buying briefing is still in the process of wrapping up, but also the fact that for a lot of these companies, they didn't see huge increases year over year. It wasn't like, you know, NBCU came out and claimed record volume. I don't think it put a number on that. But NBCU also has the super bowl and the Winter Olympics and NBA All Star Game.

[Kameka McCoy]

So it's live sports seems to be the bright spot here.

[Tim Peterson]

No, the only bright spot, pretty much, yeah. Because Disney was flat but then talked up how much sports contributed. Fox has NFL, so that's gonna benefit Fox. It also has Fox News, which is obviously seeing a bunch of viewers. But one thing that so two things that stuck out to me, one, that just volume has been pretty flat. Paramount used the word consistent year over year, which is basically flat, maybe even down, which was also the expectation when I was talking to agency execs in March timeframe and then again in May timeframe, they were expecting the upfront to be flat to down year over year. And that seems to have largely played out because who we haven't heard from is the Long Tail cable TV networks. Not Long Tail, but the A and es, the AMCs that don't have. They're in a more challenged position, as Bergi and I have reported. But then what also stuck out to me is Disney said streaming represented around 40% of its commitments this year, which sounds like a good number, right?

[Kameka McCoy]

Sounds. But I feel like you're going to tell me that it's not.

[Tim Peterson]

It's not a bad number, but it's roughly the same numbers Disney's been saying for the past three years. So this is like the third year running in which it's been at that like 40%. So there's a bit of a slowing even there in terms of how much money is being committed to streaming. Now, some of that could be there isn't the scarcity really in streaming. So from an advertiser perspective, they're probably still spending more money in streaming overall this upcoming year, but they don't necessarily need to spend that money within the confines of the upfront. Within the upfront they really need to be securing, like ESPN and like ABC Primetime and the Oscars, things like that.

[Kameka McCoy]

Well, within the context of, like, where our economy is sitting right now, one, I think we've been talking about the R word recession for so long that maybe we talked ourselves into it. I don't know. But I think you're starting to see the ripple effects of economics concerns, headwinds, if you will. Right. Not only, you know, was there reporting that the GDP growth has slowed in the first half of 2025, but also the New York Times reported that the tariff trump, what is it, Liberation Day tariffs. But you know, those deals are finally being struck. We've looked at that last week on the pod too. I know China and Mexico, those deadlines are still looming, but you've got Brazil locked into 50%, Canada, 15%. The EU, I think, was also 15%, which, I mean, now, now that those, those hands have been, you know, shaken, you're starting to see now that things are locked and loaded, the ripple effects that we've been talking about for so long are starting to show up in places like upfronts.

[Tim Peterson]

Yeah. So speaking of ripple effects that have not yet started to show up, other than in Meta stock price. So Meta. Meta had a pretty good week. It had earnings, revenue was up, so that was good. But the big thing, at least to me, that came out of Meta this week was Mark Zuckerberg's personal superintelligence memo, which one thing that was striking about it was just how stripped down the actual document is. It's a page that looks like someone's blog spot from 2001, but in it he declares, quote, met. His vision is to bring personal superintelligence to everyone. Kimiko, do you know what personal superintelligence, what does it mean to you?

[Kameka McCoy]

I am thinking, mind you, I will say I read that whole thing and I said, I still do not have a clear sign of what this means in terms of super intelligence, but I would imagine that it's likened to, like, AI agents, the same conversations we're having there. Or the movie Her.

[Tim Peterson]

That's where my head went with it, because it seemed like the closest he got to really defining what personal super intelligence is in this memo is when he says, quote, a personal superintelligence that helps you achieve your goals, create what you want to see in the world, experience any adventure, be a better friend to those you care about, and grow to become the person you aspire to be. Now, as much as all. So much of that just sounds like bs And I Don't like salad. Like, are we creating God here? Like, what helps you to grow, to become the person you aspire to be? It did make me think of the movie her, which is probably apt because I'm someone who wears AirPods a lot, so I already have, like, a device in my ear all the time that would be very easy to be kind of like that personal super intelligence device. Because this is going to. There's going to need to be some device in which I'm interacting with my personal super intelligence.

[Kameka McCoy]

Yeah.

[Tim Peterson]

Which maybe could have helped me determine, like, oh, hey, those bunnies on the trampoline. That's not real, Tim. Like, get a grip. But it seems like Meta's idea is it's not going to be AirPods or some sort of, you know, headphone, earphone device. That. It's going to be glasses.

[Kameka McCoy]

Yeah.

[Tim Peterson]

Do you want glasses to be your primary personal super intelligence, Tim?

[Kameka McCoy]

I have prescription glasses to help me see better, and I don't wear those. There's no way.

[Tim Peterson]

So they are. I was gonna say, so they already are your personal superintelligence, and I don't wear those.

[Kameka McCoy]

So I don't know how good of a chance the AI glasses stand with me, but I could see the value in them. I think over Cannes, we saw a couple of influencers wearing them and sporting them around. Just kind of, you know, something to be said about the impact now, whether they're. I've seen them in, like, you know, eyeglass stores and things like that, so there's a chance that they'll get picked up by the mainstream community. Who's to say if it goes in the. In the same vein as, like, AirPods. Right. But I think there's something to be said about Meta and Zuckerberg's AI ambitions here and where they see this ultimately going to become, like, I don't know, an AI God.

[Tim Peterson]

Yeah. And it's also, I mean, like, Meta's been wanting to have a personal computing device for a long time. Like, I don't know if you remember the Facebook phone from God, what Was that, like, 2012, 2014 timeframe? It was like that era, it was after, like, Meta had finally figured out how to do mobile advertising, but at the same time was reckoning with the fact that they had to answer to Apple with iOS and Google with Android, and they were very much competing with Google in the advertising space. And so there's this thing called Facebook Phone. I don't remember if it ever launched, but it was. I remember reporting on, like, this is Facebook's bid to finally own a device in people's lives because that's like the ultimate pole position is to be a. I mean we see how powerful Apple is by virtue of having the iPhone.

[Kameka McCoy]

Well yeah, I was just gonna say like I don't know because like they've also released like Google Home, Alexa and things like these other personal devices which historically have not performed as well as some of other, you know, like a phone or something like that. And we thought that was gonna be revol. So I don't know, I don't know how this plays out. I do know that AI, not AI Meta wants to most likely remove itself from its. It is throwing cash at its AI investments in hopes to remove itself from its mistake with the Metaverse is what I feel.

[Tim Peterson]

Do you regret not getting into computer science in school and becoming an AI researcher in order to get these like reported $100 million plus payouts from Meta apps?

[Kameka McCoy]

Lutely. But the company was single handedly go under. I do not understand computer science, but absolutely. What about you?

[Tim Peterson]

Anytime like we're dangling a payday that high, I worry about like how much of a life do I get to have versus just having Zuckerberg constantly coming to my desk and being like, you better live here because I am paying. I own you at this point. That's how much money I have given you.

[Kameka McCoy]

But also imagine like how much information now mind you, you know, if, if, if there are regulations built out around this or not, if Meta puts out a personal device and how much information is then accessible to them to be able to then hawk to advertisers and you know, down to like location, eye movements and things like this. I could see how that'd be extremely valuable. Not to put the tinfoil hat on, but you are going with that?

[Tim Peterson]

No. Yeah, I mean I even, I'm not going to lie, I recently got plants from my home office. I don't have a green thumb. I don't know how to care for plants. I worry about them dying all the time. I, the other day I wasn't even sure which what kind of plant one of these was. Took out my phone, opened chatgpt, snapped a photo of the plant. Hbt. What's this plant? What am I, how do, how do I keep it from. Keep it alive? Judge E.B. responded that's a draconia. I don't know how you pronounce it. Gave me a whole watering routine, a whole way to check the soil, everything like that. So far it's not dead. So I Honestly do see a potential future for myself in which I am wearing AI glasses.

[Kameka McCoy]

And maybe that's the play to start making money because up until now, these AI companies OpenAI and whatnot, while it's showing up good in their stocks on earnings week at least they have yet to make a profit. Right. And it's smooth transition here. It's a similar deal for how publishers are approaching this right now because they themselves are, you know, bottom of the barrel, scraping up for subscriptions whatever they can to build revenue. And AI is encroaching on that. So recently Amazon and the New York Times struck a deal.

[Tim Peterson]

Yep. And so that was announced in June, but at the time we had no idea how much, you know, money the New York Times was getting from Amazon. This week the Wall Street Journal told us how much money. And on the one hand it may be a lot to you and I, it may be less to these AI researchers that Meta is now hiring who have become kind of the new 1%. But so according to the Wall Street Journal, Amazon's paying the New York Times 20 to $25 million a year to license its content. Sounds like a good chunk of change, right?

[Kameka McCoy]

I just looked at it. Amazon's total revenue for last year was 638 billion.

[Tim Peterson]

So yeah, it's, it's throwaway money for Amazon, but even for the New York Times, it's not actually that much money. According to the Journal, this is not even 1% of the New York Times 2024 overall revenue. And so it's, this is, this isn't going to keep the lights on for the New York Times. If we get into a world in which you and I are just getting our news directly from Google AI overviews or from ChatGPT or Claude summaries, things like that. If we're not, if we don't feel a need to subscribe to the New York Times, let alone to visit the New York Times site in order to see ads. The New York Times isn't going to be able to survive in its current form on a collection of $2025 million a year licensing deals from the likes of Amazon, Meta, Google, et cetera. Especially like Amazon's paying New York Times 2020 $5 million a year for its whole library of content, which is extremely valuable. And yet Meta's throwing around $100 million. Now granted that's over multip AI researchers. It feels like that kind of shows priorities where these companies, how these tech companies are like evaluating the importance of content versus of their own technologies.

[Kameka McCoy]

Well, if Nothing else. You know, maybe it sets a precedent. And we'll get into this later in the conversation with Seb and Sarah about what the relationship between publishers and these AI companies looks like. Right. If it's not made in a court decision, then it's a matter of striking a deal. And that seems to be how this could play out.

[Tim Peterson]

Yeah. And that's kind of the. The whole conversation we had with Seb and Sarah and the conversation that they reported on from this Ivy Tech Lab meeting where more than 80 publishers, Google and Meta, had representatives there. Cloudflare had a representative there, but talking about, like, all right, publishers, how do you. How do publishers control the AI companies? Access to their content? Which is definitely an important consideration. But then it's also like. But that means controlling the AI company's abilities to access their content, which feels much more complicated. But we can let Seb and Sarah explain why that is. Sarah and Seb, welcome back to the podcast. You've both been on your regulars at this point, but Kimiko and I are stoked to have you here today.

[Seb Joseph]

Good to be here.

[Sarah Guaglioni]

Thanks. Excited to be here.

[Tim Peterson]

So, Kimiko, we are wading into the deep end of publishers and AI deals, which is something you and I have talked about from time to time in the news segment. It's been a minute since we've done much for the featured segment on this topic, but there seems to be a lot going on. Sarah, you've been all over this. Seb, you've been reported on it too. Seb, I want to start with you because it seems like the newest thing is this IB Tech Lab meeting that you and Sarah reported on that happened on July 23, and it seemed to be the biggest coming together. Well, there were kind of two coming togethers of publishers in July. This was the most recent one in terms of publishers. It seems like they're banding together to say, all right, we gotta get these AI companies to pay up somehow. What was this meeting?

[Seb Joseph]

Yeah, sure. So the meeting took place in New York last week and was attended by more than 80 execs, kind of both virtually and physically, from publishers on both sides of the Atlantic, kind of platforms and content delivery networks like kind of Cloudflare. It was focused on how the industry can respond to AI companies scraping their kind of content, often for little or no money. But a lot of the thinking about how to combat that kind of was distilled through something that we've covered a lot over recent months, which is the IAB Tech Labs LLM Content Ingest API, which I'm promised they'll have a slicker name for it eventually.

[Tim Peterson]

Yeah, because IB Tech Lab is renowned for having slick names for their specs.

[Seb Joseph]

So it's basically a way to kind of block AI platforms from scraping content unless they kind of. They're paying for it in some way. We're expecting the technical spec in November, but whether the AI companies will accept it is an open question, notably OpenAI perplexanthropic. They weren't at the meeting last week, despite the Tech Lab reaching out.

[Tim Peterson]

And that seems like a big deal because I remember talking with Anthony Katzer about this back in January when they first announced the LLM content ingest API. And my question to him was like, okay, but if the AI companies don't get on board with this, is it just dead in the water? I don't remember what he said. I don't imagine he would have had much to be able to say at that point. But is that true? Like, if OpenAI perplexity, anthropic, Amazon, who weren't in this meeting don't support the API, then what's kind of the point?

[Seb Joseph]

Yeah, and I raised that with my conversation with him on Monday. The idea, or his kind of response to that was that if enough publishers adopt this approach and effectively starve these models of content, you know, could bring those companies to the table. He sort of talked specifically about the fact that they aren't profitable. And, you know, when the, their absence from that event last week was kind of brought up at the event, there seemed to be some consensus that that would be the thing that they, you know, the, the kind of publishing industry would have to do. They don't really have any other option and hope that it kind of fosters, you know, some form of better negotiation eventually. I think they took some encouragement from the fact that Google and Meta were there. But, you know, me being cynical, you'd expect that from those companies, right? Because they're always at those, those meetings in many respects. And, you know, they weren't even saying anything that different from what they've said in the past. You know, we're listening, you know, we'll take the concerns into account. Yeah, yeah.

[Tim Peterson]

Which sounds dark at times.

[Seb Joseph]

It's like gaslighty vibes. Right? We've heard that line for kind of years. And publishers always, or usually at least, anyway, walk away feeling kind of burned. So I'm not convinced this time will be any different. And even judging by, you know, the reporting that kind of. Sarah did, you know, when she spoke to people who were there. It doesn't seem like publishers are 100 convinced as well.

[Kameka McCoy]

I'd be curious if, like, publishers are even, because one of the points that you guys bring up in your reporting is that in order, there has to be, like, a united front. Right? It's the same thing as, like, parents. Like, you can't have one parent who is like, yeah, go eat the cookie. And the other one's like, yeah, you know, I won't tell your mom. Whatever the case may be, you've got to have a united front or there's cookies for everyone. It's the same thing here, I would imagine. And, like, are you guys getting the sense that publishers are going to be able to create a united front here? You know, there's the risk of striking deals with some of these AI platforms to, you know, give themselves some leverage.

[Sarah Guaglioni]

Yeah, I mean, I think it's an interesting question. I mean, that was one of the things that I asked people that I talked to was like, were there any notable publishers that were missing from the room? And it didn't seem like anyone really stood out in terms of anyone that wasn't there that people would have expected to be there. And I think when I posed this question to them, too, like, you know, how realistic is all of this? Like, is this really going to happen? I posed that exact question, Tim, that you mentioned. Like, is this dead in the water without some of these big players even here, even willing to listen to these conversations? And I was kind of surprised by how optimistic some people were for now. That, you know, this was just the start is really the way that it was framed to me that in some ways, everyone needed to come together and have. It's like the parents analogy you were just making Kimiko. It's like, before you have that united front, the two parents have to talk in the corner and be like, do we give the kid the cookie? He had one this morning. I don't know. It's kind of like that is what it seemed like to me. We need to figure out what exactly we actually want, and then we can come out and say, okay, now we need the AI companies at the table. Otherwise this isn't going to work. It was like the first step before that, which I'm like, really? You've only gotten that far considering, like you said, Tim, this has been something that's been talked about since January. There's been a lot of activity in the space. It seems like things are moving slowly.

[Tim Peterson]

Well, it's also. I mean, there are publishers who already have deals in place with multiple of these AI companies, especially the ones that weren't in this meeting. So I kind of wonder if those publishers feel any need to participate here and if the fact that they're already doing deals with OpenAI with perplexity kind of mitigates some of the potential impact here, what this group of publishers is. Because I believe there are some who have AI deals who are part of this IAB Tech Lab meeting, but that it's primarily the mid to long tail publishers who at the Digiti publishing summits in the past have talked about not being able to get deals or even conversations going with the AI companies who are trying to create some sort of leverage for themselves. But I wonder if they have that leverage. If an OpenAI or perplexity can say, well, we already got Axel Springer, we already got Meredith. Amazon can now say, we have the New York Times, we have Conde, we have Hearst. Do we really need all of you publishers? Because also that gets expensive.

[Seb Joseph]

I also think it's a delicate situation because there are antitrust concerns, right? Like publishers being seen to be forming a sort of cartel of sorts. Again, when I spoke to someone who was there, there seemed to be a belief that it would be naive for anyone to think, you know, publishers could form some sort of cartel group that would, even if they did agree something explicitly, you know, that would be of any real threat to kind of platforms given the scale of those businesses. But I also think that there does seem to be a belief that given the existential kind of issues at stake for the publishing industry, that this idea of a united front seems like more urgent than I think in past times where we have seen pleas for publishers to kind of band together and then kind of break up because of their own commercial interests. Time will tell kind of how much of that is actually kind of true. But, you know, the fact that this thing is moving so quickly, the fact that there is such a firm consensus around a specific direction to go, makes me think that that united front will, you know, there's, there's a chance that it would come from. I'm less skeptical about that than I have been when we've heard about other united fronts kind of forming around. I wasn't going to mention that because it triggers me, but exactly that. So, so, well, we'll kind of see. I think that, you know, there's a chance that these deals evolve and become less specific and kind of like, like, more like, like broader and done via, you know, kind of trade bodies and certain groups potentially. But, you know, I'm I've got hope, I think, coming out of that, that event, which is. Which is a big.

[Tim Peterson]

For me.

[Seb Joseph]

Exactly.

[Sarah Guaglioni]

Yeah. And one publisher put it to me that those deals were a bridge at a time when no one really knew what was happening. Like no one knew what the future of all this was. So those OpenAI, those big deals that were coming from companies like OpenAI were a way to bridge that gap between, oh my God, here's this huge AI company. It's taking all of our content. What do we do? Okay, they're going to offer us a ton of money so we don't sue them. Great. But now the landscape is evolving so quickly that I think the idea is there's an even bigger market for all of this that's coming. Another publisher was telling me, oh, some people are saying all those big deals have been signed. What's left? And their perspective was like, no, no, that's just the beginning. The marketplace for this is just going to evolve and expand and we need things like this to have some sort of standard in place for when that happens.

[Kameka McCoy]

And I actually want to double down on that. Like, should there not already be a playbook here? Because you've had publishers v platforms that match happening for like years. Even when you think about the pivot to video and social and search and things like this, should a playbook not already be in place for this type of things that we can whip out?

[Seb Joseph]

I think you have to remember how complicated these things are and just how slow the industry, you know, kind of moves. You know, you go back a year or two and these licensing agreements were reactive. Right. AI companies were kind of under pressure to legitimize their kind of training data and publisher saw an opportunity to make a little money off content that had already been scraped. You know, so the deals were a lot more. They were non exclusive, focused more on the archive material and frankly, they lacked a lot of transparency. Someone said it to me the other day, they felt more like PR plays than kind of real business kind of deals. I'm not saying that's completely kind of changed, but it does feel like, you know, especially given some of the stuff that Sarah and Jess have written recently about how Amazon is sort of striking deals. It does feel like there is some slow movement there. And on top of that, you know, publishers, at least the ones who leverage, are being a lot more assertive. Right. Partly because the platforms are no longer just training on static data. They want fresh, real time stuff to kind of power these deals. And I think, you know, Sarah, you can Kind of take this away, but that kind of changes the game a bit. Right. Publishers are coming to the table of what's being called, or at least we've kind of coined it, four Cs control, consent, credit and compensation. And that really boils down to a few kiosks.

[Sarah Guaglioni]

Yeah, totally. I feel like now that the sort of structure or model of these deals has really transitioned from training data to needing access to real time reliable content because of the boom of all these AI search engines, it really puts a little bit more power I think in publishers hands and it allows them, I think to have some loftier demands. I don't know how far they're going to get with these, but I do think that they have maybe a stronger case for the value of that real time content that AI systems need in order to be something that people actually want to use. Right.

[Tim Peterson]

I appreciate all the optimism here. I don't know that I necessarily agree with the idea that there isn't a model here. And maybe this is just me being warped by covering the TV and streaming industries. And so like hammer with a nail, that's my hammer. I see there being a model where when cable TV came along, you had Ted Turner say it wasn't called Charter at the time, I don't think. But like Charter, Comcast, all the pay TV providers you're going to pay me to carry TBS and TNT and espn, everyone else got on board with that. And so there is this model in place of the who's who of TV networks get paid by pay TV providers for the pay TV providers be able to carry their content. In this analogy, the pay TV providers are the AI platforms. The TV networks are the New York Times, the Condes, the Hearst, the Axel Springers, the Dot dashes. But what we've seen with streaming is you have all these smaller media companies and one off publishers creating these free ad supported streaming TV channels. They're not getting paid for anyone to carry those channels. We've in fact seen with traditional TV TV networks get dropped because the pay TV providers aren't willing to pay for them because they don't see their content as valuable anymore. And in fast the free ad supports streaming TV service industry. We've seen there be some haves and have nots. Some people do get some licensing deals for their programming. But others are even just trying to vie for inventory splits to be able to sell ads against their inventory. Whereas others are just getting relegated to rev share deals. They get some cut of revenue that's based on ad sales that are entirely controlled by the fast services. It feels like that again, my warped mind from covering TV and streaming, but it feels like that's going to be the model here where you get the cream of the crop, publishers who get the licensing deals and everyone else just kind of hopes for some form of rev share, if that.

[Seb Joseph]

We forget that there is also regulatory sort of pressure that is increasingly starting to coalesce around this kind of part of the market. And.

[Tim Peterson]

What'S that pressure? Yeah, sure. Well, pressure's going the other way towards deregulation.

[Seb Joseph]

So you've got in Europe, right, you've got publishers that have pushed for lawmakers in the EU to take a closer look at, you know, how AI overviews is defunding the publishing industry. You know, you've got the judge overseeing the antitrust kind of search trial for Google has made a very particular point about AI and the impact Google search efforts will have on media owners. And whilst obviously that is kind of focused on Google, based on some of the noises that the regulators are making, it does feel like this is going to be a bigger kind of through line in terms of how they keep track of the kind of platforms moving forward. I tend to kind of review Tim in terms of how this will potentially kind of shake out, you know, particularly in almost creating a survival of the fittest paradigm. That said, I have to take some solace in the fact that the industry is being a lot more aggressive about fighting this and more organized in a way than it has done in the past. And I have to sort of believe that, you know, that will yield some good in terms of the business economics around it. I think there is still so many moving parts, it would be wrong to really formalize how that kind of business model will evolve, but I think it will. Licensing deals will be a part of it, but there will be other strands. I think, you know, Google already talking about the ad experience in AI overviews and perplexity rev share deals around sort of advertising. But so much of that I think will be dictated by how the genet AI platforms decide that they want to decide the direction they want to go when it comes to advertising. Because you see from recent appointments and hires that that is a business model they are going to have to embrace sooner rather than later just because of how much cash debt they're burning through at the moment.

[Sarah Guaglioni]

Yeah, I mean, I think it is fair to say that if you're not a big publisher signing some of these deals or in, in some of these rooms having these conversations, the future looks pretty scary and Pretty bleak. And I think that's why, to Seb's point, there is a real pressure to organize together as quickly and as maybe aggressively as possible because of how scary landscape may become for those publishers. And I think that's also why with some of these deals, you know, publishers have said that those big checks are great, but there really needs to be stability going forward. There needs to be some sort of model where this revenue is something that they can count on, not something that just goes into a quarterly earnings report and looks really good. But what does this mean for the future? And I think that's what everyone's really focused on now is how do you set up some sort of framework for what that looks like when millions and millions of unauthorized AI bots or bot traffic is still scraping your content. And, yeah, how to gain back some of that control.

[Seb Joseph]

But it would be nice or not. I think the AI platforms need to be a lot clearer about where they stand on things. Right. Because it's all very well, us sitting here and kind of talking about how it could sort of turn out. It's all very well, you know, the great and the good of the publishing industry converging in New York last week to do the same. But until we know where these companies stand on things and, you know, you can divine some of that from their absence, it's very hard to kind of look too far out. You know, Sari, we were talking about it earlier, like there was a. There was some excitement about the fact that Google had finally, you know, entered the chat when it comes to these AI licensing deals. And yet it turns out that what is being sort of offered is poultry. Right. So it's. It's really hard to talk about this in the round when there are so many sketchy bits. And also, I think I'm trying not to get too fixated on just the AI licensing done. That's what we're talking about. But it will be one component of a broader kind of business model. I still think a lot of companies are figuring out what that kind of is, particularly the longer tail.

[Tim Peterson]

Yeah. Because it feels like the publishers haven't established the financial incentives for the AI companies enough yet. A lot of this just makes me think of, obviously we're employed by Digitite. Digiday's a publisher. We all would like to see Digiday get some compensation here to protect our jobs. But it feels like we're apartment tenants banding together. Of like, we need to go to the landlord, we need to make sure the washers are getting fixed and we would like rent control and all of these things. And that all sounds great when we're banding together, but what's the incentive for the landlord to do any of that if we're just like, otherwise we're going to move out when the landlord could say, okay, that's fine, I actually would love for you to move out because then I can jack up the rent for the next people because I kind of like it.

[Kameka McCoy]

I was just about to say that also kind of brings us back full circle because even if you got all of us tenants coming together, in the case of the publishers, if you've got long tail publishers who are like, absolutely, we've got to be on board together and you've got your flagship publishers being like, well, I've got my deal, so know what to tell you guys. It kind of falls apart.

[Sarah Guaglioni]

Yeah. And you know, there are a lot of lawsuits right now that I think will also help shape a lot of what we're talking about that we just don't know yet. You know, I do think that the people in the room at that IB Tech Lab workshop, there is something to say about how a lot of the big companies that have had these kinds of models with publishers already were there, you know, meta, Google, I think Amazon was there. And that's it.

[Tim Peterson]

Amazon was there. Okay.

[Sarah Guaglioni]

And then the startup AI companies weren't. And one publisher, and take this with a grain of salt, but one publisher did say that maybe that's because these big companies have already been through this and know that it is important to have some sort of good relationship with publishers. Whereas these startups, like you're saying, haven't quite figured out what that incentive really is and why it's meaningful. And I think it is on the publishers to present that in a way that makes it, it's not just a, oh, yeah, we'd really like some money. It's like, no, no, we need to set this up for the future of your AI systems and for the future of the content that you rely on in order to make those something that people actually want to use.

[Tim Peterson]

At the same time, the AI platforms that were in the room are the ones whose AI chatbots don't have as much market share as ChatGPT as Claude. If Microsoft was in the room, if Amazon was in the room, I don't know anyone who's using. Rufus Copilot's had all kinds of branding issues and they're both.

[Seb Joseph]

And all of those companies are at the wrong end of regulatory scrutiny as well. For real So I think there are lots of machinations at play. I think, Tim, to your earlier point about coming up with a way to incentivize these companies to come to the table, it's been interesting this week talking about or hearing about that kind of debate between the compensation models, Right. Should it be pay per call where companies get charged? Was it each time a bot ingest content or pay per query, you know, where they get paid when their content powers an actual response? That debate seems to kind of be moving toward a hybrid approach where you've got companies like calphair pushing that core based kind of model. But then there's a recognition that the query based payments also need to be part of the mix, something kind of more tiered and dynamic. Again, I don't know if that's enough to bring those companies to the table, but it does seem like your point isn't lost on kind of publishers, at least that we're at that kind of group and who Sarah's been talking to too, sort of recently. It seems to be a real thing that they're actively trying to understand. Yeah.

[Tim Peterson]

And at least these conversations start happening. For as jaded as I clearly am on the topic, it is to both of your points good that these conversations are happening. And it also is good for us because then we'll be able to have these conversations. We're going to have a virtual town hall with publishers coming up on August 22, the third Friday in August. So everyone look out for that on Digiday's LinkedIn to be able to sign up. That'll just be limited to publishers. And then Sarah Yu, Alexander Lee and I will be at the Digiday Publishing Summit in September and everything, we're making it so that as the entire summit is about AI looking at everything from referral traffic to exactly what we're talking about kind of business models in this AI era. So yeah, obviously as this conversation has shown, plenty to talk about. But thank you both for coming on Talk with Kimiko and about it today.

[Sarah Guaglioni]

Thank you, thank you.

[Kameka McCoy]

Holy shit. We left this conversation with hope. That's crazy. Well, that brings us to the end of this episode of the Digiday Podcast. Thank you to everyone for listening and please don't forget to share this episode with someone who you think would enjoy it. You can even rate us and leave us a comment on Apple Podcasts. We'll be back next week with another episode of the Digiday Podcast. Thank you so much for joining us.