A (3:16)

They're not very interesting looking ads but also, I don't know about you, I got flashbacks to when I used to cover Facebook as like a dedicated social reporter and Facebook would always have these mock up of these ads with I forget the name of the grocery store, but it was like a fake grocery store or market that they would use. These ads kind of look like what Facebook was doing with sponsored. Well it was after sponsored stories but before whatever they're calling their ads now. But like the 2014-2016 timeframe where it's just so these ads appear below the actual like ChatGPT official response and supposedly so there is like kind of a light dividing line and there is, you know, a clear sponsored label to them. But I guess the idea is if you're having a conversation with ChatGPT and ChatGPT thinks oh maybe you want to know about this brand or this product, that would be helpful. I guess it's that commercial intent thing that OpenAI CEO of applications Fiji Simo, former Facebook exec, had talked about in I believe an interview with Wired where they need to establish commercial intent before they roll out ads. And then we had a whole conversation with Digidace platforms reporter Crystal Scanlon about this a couple of months ago.

B (4:48)

I do question because Google had also recently announced that they were releasing ads within their AI mode, which we had talked to a Google executive, Dan Taylor, about this earlier last year about it. So at this point I feel like we've reached like the next leg of the arms race here.

A (5:06)

Yep. Yeah, but obviously like still so many questions to unpack with this. So we know advertisers will get some data on how their ads are performing. Again according to Wired advertisers, we'll see aggregate ad performance metrics such as how many times an ad was shown in ChatGPT or how many users clicked on it. Nothing about retargeting opportunities or if OpenAI is going to have any sort of conversion tracking or link decoration. So that if people click on an ad from ChatGPT, go to a brand's website, if the brand will then be able to recognize that person came from ChatGPT. And ChatGPT will get any sort of credit if a person made that purchase. We also don't know how much these are going to cost or how they're being priced yet.

B (5:53)

CPMs versus CPCs and the list goes on.

A (5:57)

Exactly. So all of those questions. Also in this Wired story, OpenAI says it will match conversation topics to relevant advertisements. Some of a user's personalization data may be used in that process. I feel like when we had Elena McGurn from Digitas on the show back in May, we kind of laughed in that conversation. A bit of like, need to start getting way more careful about what I talk to ChatGPT about. Seems like that's the case here. People will be able to turn off the data used for advertising. I haven't seen those controls yet, but I'm very curious too. But obviously there's still a lot to be sorted out with in terms of what this ad product is, what advertisers and agencies responses to this pricing, all of that. So all of those questions will hopefully be answered soon by Digiday's own reporting. I'm sure you and I are probably going to have a whole episode about this coming up soon.

B (7:03)

Yeah. I wonder if this episode is actually for everyone who was waiting for the other shoe to drop for ads in these AI platforms. And I know that there's about to be a very busy, busy next couple of days for media buyers and advertisers.

A (7:18)

Yep. But for now, let's get on to our conversation with Jess and Sarah where they rank the various AI platforms and OpenAI is very much on that list. The where OpenHay falls on that list may surprise some people. Today we have Jessica Davis, who is our senior media editor at Digiday, and Sarah Guaglioni, who is our senior media reporter. Justin. Sarah, welcome back to the show.

C (7:53)

Thank you so much. It's great to be here.

D (7:55)

Yeah. Thanks for having us.

A (7:58)

Absolutely. We wanted to have you because you both worked on a scorecard recently, late last year, evaluating the various AI platforms that are doing deals with publishers or not doing deals with publishers, because those ones were also evaluated as well. And it feels like last year was a really big year for more tech platforms to join the fray and start doing deals with publishers. Microsoft joined the fray. Amazon did a big deal with the New York Times, and then right before the calendar turned to 2026 meta and Google said, oh yeah, let's get in on that too. Jess. I'll start with you, because both of you have done so much reporting on this. But what made 2025 seem to be such an inflection point for these AI platforms to be doing deals with publishers?

C (8:56)

Yeah, it's such a good question because it did feel like a real reset if you just sort of skip back just to those early deals. It was such a different picture, very, very bleak. So last year very much did feel like a lot more happened. As you say, there were sort of some really late moves at the end of the year just when we're all thinking things are winding down and nope, they all come out with these huge announcements. But it definitely, I would say, felt like a really good sort of a better balance last year if you sort of started back not that long ago, 2024, but feels like long time ago in AI terms there was really only a couple of a handful of deals with massive publishers. They were all very much sort of training deals. And as the sort of time moved on through last year, we saw both a change in just the kind of structure of deals and sort of not so many just lump sum deals, but also the range of publishers that were sort starting to kind of get a foot in the door, I suppose with those AI companies.

A (10:01)

Right, yeah. And Sarah, to Jess point, we're just over two years since OpenAI and Axel Springer really kicked this off. That was, if I'm remembering right, the first such deal in which a publisher got a deal in place to license its content to one of these big AI platforms. How are publishers feeling right now? Is the sense that, okay, we have all the ducks in a row, finally all the players are on board and we understand what the compensation models are going to be. Or are they still feeling like everything's uncertain when it comes to these compensation models?

D (10:43)

Yeah, I feel like it depends what kind of publisher you are. I feel like the big guys that I talk to feel like it's sort of open season, you know, now that there are more players in the space, it's more competitive, there are more options for publishers. A lot of these, you know, newer, you know, sort of players like Microsoft, it sounds like the relationship that they have with publishers is very collaborative. You know, they're all sort of trying to figure out a new model, a new compensation model, a new, you know, sort of content licensing model. So it feels like there's a lot of opportunity. But if you're a smaller publisher, I think you're feeling like you're kind of being left behind even with these new players because, you know, the Microsoft's the metas, the Googles, they're still going after those big, big digital publishers. And if you're mid size, if you're smaller, if you're more of a, you know, specific category publisher, you know, finance, lifestyle, whatever it may be, I think you're still kind of worried about what the market, how the market is evolving and that you may not have a role in it. Like I know in a lot of conversations Jess and I had, people will talk about how they were trying to reach out to OpenAI, to perplexity, to Meta, to Microsoft, asking about how they could, you know, take part in all of this, in this new, you know, sort of market that we're seeing evolve and their calls, emails are going unanswered. And so yeah, I think it just really depends on what kind of publisher you are and what that kind of means for the future of media going forward and who does get to have access to some of this money that's going around for content licensing.

B (12:31)

We've talked about this before, but I do wonder if it'll be a situation where some of these smaller publishers have to kind of band together to do like a strength in numbers type deal to be able to get their attention as far as going like kind of the experimentation phase and things like that. I'd be really curious like do you guys have any type of temperature check on if there's anything that becomes stable table stakes, Excuse me, at this point, right. As far as like Rev share or attribution, that type of deal, I would.

C (13:00)

Definitely say that the publishers that have been doing more of these deals are a lot more savvy than, you know, those, those early days, you know, they now have some non negotiables of that sort of baked in is going to sort of be centered around attribution, kind of minimum requirements for attribution, even down to sort of as small a detail as number of words in a quote pulled and things like this. But I would definitely say there's still no kind of standard. It really seems to kind of as Sarah said, like every publisher is different and each deal is very, very different and there's a lot of still kind of feeling the way with it, especially with some of the newer ones like the meta deals which are still so new and Meta is also just starting on this as a journey itself. So there's a lot there. But I would definitely say that there are some strong kind of non negotiables and even a few publishers have said to me that they've had conversations and they've They've not been able to agree terms. Some of the AI companies haven't been willing to stump up the cash that the other ones that they have done deals with have offered. So both have kind of walked away, I suppose. But yeah, that's kind of what I'd say on that. There's definitely no sort of one size fits all. It's very much kind of a mix of different structures and deal sizes and terms.

D (14:34)

And I think there's still a lot of secrecy around the deals and conversations that are happening. I feel like when I talk to people, they don't know what other publishers are talking about with some of these companies that they can't get in touch with. They don't know how much money necessarily is going around and how big some of the deals or how small some of them may be. And I feel like that kind of makes it difficult to have, you know, what you're saying about table stakes because, I mean, there is some collaboration happening. But I get the sense that there's also still a lot of mystery around how these deals are being formed and what people are getting and aren't getting.

C (15:16)

Yeah.

A (15:17)

How real is this money? Because like Sarah, we had a virtual town hall with publishers that we hosted back in August of 2025 and we talked about one of the AI platforms that we will be talking about in this conversation. So I'll kind of leave that a bit of a mystery till we get into it. But we asked how real is the money that's coming through from this platform? And if I remember right, the publishers that participate in that talk are just like we're getting peanuts. It's pennies if anything. And I feel like there's even been reporting done by the information and I think the Wall Street Journal around some of these bigger content licensing deals. But looking at the math and saying, okay, this major publisher may have this big multi year deal with OpenAI, but that actually equates to a single digit percentage of that publisher's annual revenue. This is not money that's going to save any publisher, it seems. So, sir, how real is this money at this point?

D (16:24)

Yeah, I mean, I think that's a good point. Like if you're getting a really big splashy deal, then maybe you are making, you know, millions. And that's a great splashy announcement and it makes you look good as a publisher because you're like, oh yeah, you know, we're at the forefront of this. We're working with this big AI tech company. This is the future. We're making Money, this is great, but I think for anything simple smaller than that, it really is peanuts at this point. And I think some execs don't really want to admit that they're not making anything substantial, significant or even really notable from these deals because they want to make it seem like, you know, they're. They're working hard to try to get a piece of the pie. And even when they do sign a deal, they want to make it seem like this is the future that they're trying to think about the future of content licensing and what that looks like for them. And so I think sometimes they are trying to be a bit mysterious about it, but the truth is they're not really getting a lot of money at all. You know, like they're getting checks. But how much is in that? Nothing really to, you know. Yeah, be super proud of, I would say, at this point, unfortunately. But I don't know, Jess, maybe you've heard differently for me in that sense.

C (17:44)

I think there's so many things I could say on this. There's so much sort of emotion sometimes around this topic when you talk with publishers. But I would say no, I definitely agree. I don't think that the economics really of any of these deals have kind of offset some of the damage done by. Obviously the main one is Google AI overviews. It's certainly even. There are a couple of ones that I've spoken to that are working with Google on some of the kind of the AI licensing terms that they talked about kind of recently, but they sort of describe them as material, but there's still no actual sort of hard number. And they all. Whenever I've asked about if it's really worth it in terms of what they're losing, they've all said, no, absolutely not. They've all laughed at that and been like, of course not with a kind of, you know. But it's something. And as kind of Sarah said, it's about kind of trying to set terms for the future. So the idea, hopefully, is that some of these, you know, these LLMs, you know, to go back to your first point, Tim, when you were saying, how does it feel this year? Such a big kind of glimmer of hope, I guess, has been that a lot of more big tech companies have shown that they are willing actually to sort of come to the table, whereas before they really weren't. And so whether they can kind of keep renegotiating those contracts into the future, whether that's worthwhile, who knows? That's kind of an open question. But it does at least show that there is willingness to pay and perhaps in time that is a revenue stream that can build.

D (19:27)

Yeah, sometimes I'm like, oh, but you've had this deal for like almost two years and you're still not making that much money from it. Like, how long is the long game here? I have my doubts.

B (19:37)

I think sometimes I'm almost wondering if the lawsuits are going to pan out to be the better deal in the end of this.

C (19:44)

Yeah, well, this is another. This is another thing as well. Why, why people kind of speculate. Well, this is kind of the word on the street, I guess, is that like a lot of the, you know, the pushes from certainly sort of Meta and Google into this are really about kind of de risking and sort of showing themselves to be doing something when they're kind of being. There are lawsuits that are sort of starting to look a little bit more in publishers favor coming out and also the regulatory scrutiny on them now with AI overviews and things like that.

A (20:19)

Okay, so let's set the table on who's at the table and who the publishers are really gravitating to and who maybe they're not gravitating to. You all did the scorecard where you had a pretty well defined rubric by which you evaluated these various AI platforms and what they're offering to publishers, what their advantages are, what their deal models are. And so let's do this as a reverse hierarchy from worst or least best to best, starting with the, I guess, sort of the honorable mentions, although maybe the first one is kind of a dishonorable mention. Anthropic. Is anthropic even really at the table, Jess?

C (21:06)

Not to my knowledge. That's the one that I think there's the biggest sort of opaqueness around what I've heard from conversations is that they haven't really engaged. This hasn't been sort of something that publishers have had any response from them about. So really it's kind of been a bit of an outlier, I would say, in terms of the major players. And it's certainly not one that comes up in conversation at all. I had to kind of push to sort of get a few answers on that. And it was like, oh, no. Anthropic, no.

A (21:48)

Okay, so then we could probably just move on past Anthropic until Anthropic wants to participate here. Next on your list was pro rata. Sarah, you've done a lot of reporting around pro rata. At the same time, I feel like the only time I've ever Even heard of pro rata is when I've read your rewarding. So I don't know how significant a player they really are.

C (22:11)

Flying the flag. We're flying the flag.

D (22:15)

Yeah, it's very fair. I mean I think what has really evolved when it comes to pro ratas working and business relationship with publishers is that instead of really trying to drive a lot of revenue through their search engine that you know, sort of lives on its own, they started to work directly with publishers to add their search engine to publisher sites in order to upgrade the search functions on their sites and trying to, you know, put ads there but also to recirculate other publisher sites on there. So I feel like it's really been a product upgrade for publishers that take part in their, you know, partnership program than it is necessarily a revenue driver at this point. But the publishers that work with them talk about them very positively. They seem to really like the relationship there. It's just that in terms of the money that's actually coming to them from that relationship is very, very, very small.

B (23:19)

Let's talk about the the other P1 perplexity. I feel like they're a little bit higher up on the, on the tier ranking. So what have you guys heard about their, their deal?

A (23:30)

Pregnant pause because Perplexity has been like. Perplexity was one of the early ones but they came in with a different kind of model. Whereas OpenAI was doing like the upfront content licensing payments. Perplexity came in and said actually we're going to do rev share deals. And I feel like the, what was it, the September 2024 Digiday Publishing Summit. There was a lot of interest and even excitement around Perplexity in the town hall conversations. But I feel like that maybe has waned a bit.

D (24:02)

Yeah, I would say absolutely. I think when they first started out this sounded great to publishers, especially the you know, mid sized smaller ones that weren't attracting that those kinds of big content licensing deals from OpenAI. This really opened up an opportunity them. So they were really excited to join this program. Seem like they could get, you know, a cut of something from this at least, you know, make some kind of money from content licensing. The problem is it was really built around advertising and the reality is Perplexity's advertising business has not been very good at all. So the actual money that Perplexity is able to drive to generate from ads is I don't think has been all that great. So then the cut that publishers are getting is very small. So even though it opened the door to content licensing with an AI company for publishers. It hasn't actually panned out to something that's been really that great, I would say, at the end of the day yet. And then they've really evolved the revenue share program to focus on their AI.

A (25:06)

Lost their advertising chief, right?

D (25:08)

Yeah, yeah.

C (25:09)

Which is not going to be helpful.

D (25:10)

To focus on their AI browser.

C (25:13)

Comment.

D (25:14)

And you know, they really marketed this as, you know, a whole new way for publishers to make money through a new browser experience that uses agentic AI. You know, again, sounded really interesting, but at the end of the day, you know, I'm not hearing that people are really making much money from this at all. And if anything, I think the number of lawsuits that Perplexity is dealing with as well has really hurt its reputation since the launch of its first revenue share program. And so I think that's been, you know, kind of painful, I would say, for Perplexity and something that seems like the company is really trying to, you know, get over. Get over that hump.

C (25:58)

I would say I would just add as well to that is that publishers are obviously kind of looking more closely at the crawler behavior and Perplexity just seems to have the worst reputation of all. I mean, I don't think Anthropic had a great sort of score on this either, but certainly when I was speaking with publishers for this and beyond this as well, previous conversations, it always gets flagged as one of the worst behaving callers that kind of will mask its crawler sort of pop up in all kinds of sort of different ways. And so I think that as well has kind of annoyed and frustrated a lot of publishers. So that was also why it kind of got a low score from us.

A (26:43)

Right. And with Perplexity, are they the only one currently doing the Rev Share model? Because I wonder like how much of this is a referendum on Perplexity, which I think is entirely valid given that. Sarah, do they still just have one person running publisher partnerships?

D (27:01)

It's funny that you asked that because someone told me that someone else joined the team and I tried to ask Perplexity about this multiple times, so many times. And I get back the strangest answers and I haven't really figured that out yet, but I'm trying to, so it's possible there's a second person. I don't know why they're so secretive about whether or not this person exists and what they do, but as far as I know, there's still one main person that's leading all of their. Yeah, publisher Partnership programs.

A (27:31)

Okay, so Perplexity still needs to get its stuff sorted, but is this also like a referendum on the Rev Share model? Because to my mind, I don't think any of the other platforms that we're going to be talking about are doing a Rev Share model at this point. Is that right?

D (27:49)

Technically, Pro Rata is a revenue share program, but it's pooled from all of the revenue that Pro Rata makes versus, you know, money that's coming from advertising and things like that. So, you know, Pro Rata, I would say is another revenue share, you know.

A (28:06)

Program for publishers like below Perplexity on the list. So maybe this is kind of the dividing line in the list between the honorable mentions or again an anthropic point, the dishonorable mentions and then what seem to be the real players and I guess the next real player. So I believe this is number five on the scorecard is also the newest to join the scorecard and that would be Google.

C (28:36)

Yeah, so this is the one that obviously gets publishers the most heated, but it does have a handful of commercial partnership pilots that sort of involve testing its AI features in Google News. And it has made, at the end of last year, it kind of came out with a sort of flurry of or a bundle of different kind of announcements, one of which was sort of promises to provide greater linking in things like AI mode and things like that. But honestly, the reason it got such a low score is because in the grand scheme of things, it's got a handful of handful of deals, not enough to kind of offset the damage that AI overviews has done over the last year, economics wise. And nothing compared to, if you compare OpenAI's deal sort of lists of deals that it's had and how much it's paid out to publish this this year. So there's kind of a bit of a sort of question mark. I'm interested to see how it's going to unfold. I mean, yesterday in the uk, Google's head of government and public affairs, Roxanne Carter, she spoke about how it has just a hard line on no payment for training, but it will agree to payment for access. And there are sort of certain caveats within that, but it was very much just a kind of, just another kind of boundary set, I guess to show sort of where it's at, that that is just off the table entirely. But it is going to be doing some more kind of integrated deals there. So it's going to be interesting to see kind of how publishers are working them with because They've got such long standing relationships with Google that it's very different to sort of OpenAI where this was, wow, first time we're working together, big deal. Let's see how we can kind of continue working together and sharing data and, and stuff like that. But with Google, I don't know if you're hearing differently, Sarah, but the conversations I have, it's very much we have a long standing relationship with them so we hope this will evolve into something kind of eventually. But it's not going to be a sort of clear cut lump sum sort of cash payments or any kind of really hugely material sort of difference at this point from what I'm hearing.

A (31:05)

Yeah. Which is I wondered how much that's going to change because one EU has launched an antitrust investigation into Google over how it's scraping content to train its AI models. Also the privileged position it has when it comes to both owning YouTube and being able to scrape all that content and train its models. But also I feel like the biggest sticking point publishers as well as marketers, but publishers especially have with Google is you can't opt out of your sites being scraped and trained for its AI models unless you also are willing to opt out of being indexed for search. And that's just like a non starter for most publishers, right Sarah?

D (31:49)

Exactly. Yeah. I feel like that's the biggest challenge for publishers is that they, their hands are tied. Like they can't really, they don't really have leverage in that sense there because what publisher is going to voluntarily, you know, decide to not have their pages indexed by Google search? Like there's just no way that they would do that. And so they kind of have to opt in. I mean, they're not really opting in, but they kind of have to allow that to happen in order to continue to get traffic from search. And I think that's, you know, sort of the yeah. Biggest challenge that they're facing right now is that they haven't been able to split out, you know, separate those crawlers. So you don't really have any power to do much beyond, you know. Yeah, not being in search.

B (32:41)

I want to move up the list a bit. Up the list a little bit. Excuse me. The next that you guys have here is, is Amazon and I'm curious because like their deals are different because their LLM Nova is not in the same hierarchy as like a Jetty or a Gemini. So how are those deals structured? Right. And then also kind of how did you guys rank them?

D (33:05)

Sure. Yeah. So for Amazon, I would say There are two types of licensing deals that they've really done. One for their virtual assistant, Alexa plus, and one for their AI shopping assistant, Rufus, which, you know, you probably see on Amazon, and things like that. So it's been very specific in terms of the content licensing deals that they've done with publishers for those products. In particular, you know, there was that really big deal that Amazon did with the New York Times, which was the first time the New York Times, you know, signed a content licensing deal. And they're arguably one of the biggest publishers around. And so I think it was very notable in that sense. Details are slim on what that really means, but obviously if it's good enough, I would say for the New York Times, which, you know, has that very public and active lawsuit against OpenAI for not paying them enough money for their content, then it's probably a pretty big deal, I would assume. And I think it really goes. I think what it really did was show that Amazon is willing to do this and to do this with and to. I would say what it really showed was that Amazon is willing to do this and willing to do this in a big enough way that a publisher like the New York Times would think it was good enough for them. And I think in and of itself, that's notable. But, you know, since then, we'll see. I'm actually really curious to see what happens with Amazon and publishers this year. I think it's one of the big ones to watch because I can't imagine that they're done.

C (34:42)

No, I agree. I have spoken with a few publishers recently that have been hoping to get something interesting off the ground. Conversations are kind of ongoing on this stuff, I think, all the time. But I do know that they've sort of not gone anywhere with them. So, again, it's always very secretive, as Sarah says, trying to kind of get an idea on exactly what's going on with some of these things or why they're falling down is difficult. But on a basic level, I've understood that just on a basic rate, the money terms weren't right. So I agree. It's definitely one to watch. It's really interesting, but I'll be curious to see how many more we see this year.

A (35:27)

Okay, so Amazon edges out Google for the fourth spot, seemingly thanks to the New York Times, doing the deal with Amazon. Now let's get into the top three. I was surprised at the number three on this list because it's a newer AI platform or newer platform to be doing deals with publishers. It only announced that it Started doing deals with publishers in the last, I believe, two months of the year. It's a platform that has a very spotty track record with publishers. There's not much, if any love lost between publishers and this platform. It's also, to Kimiko's point around Amazon, not really an AI platform that has a big user base for its AI tool. Now, kind of like Google, its AI tool seeps into its existing consumer products, which are very popular, but it's not like a ChatGPT or a Claude or a Gemini. Do you want to introduce who our number three is?

C (36:33)

Da, da, da. It's Meta. Yes.

D (36:37)

No. And this. It's funny that you say this, Tim, because if I remember correctly, Jess, and correct me if I'm wrong, but I think we actually did go back and forth on this a lot about, you know, where Meta sat on this list and we. Yeah, we really. Back and forth. Cause we were trying to. We were trying to. We were trying. You know, we're kind of stress testing this spot for Meta itself. But, Jess, I don't know if you want to elaborate, but it is funny that you brought that up because it was a tough one for us, I would say.

C (37:08)

Definitely, definitely. It was definitely a bit of a, you know, a thing we threw in. Not to be controversial, but. No, I would say that the reason they got high school at the time, it all kind of loops back really, to sort of how you kind of started us off. I feel like, Tim, with the conversation of just where publisher mindsets are and were at different points in the year, and the emotion and the relief and the, you know, all the kind of the feels that went into, obviously, you know, these sort of contracts and things. But I definitely think that, yeah, Meta, as you say, has had a very kind of vitriolic history, really, with publishers. They haven't trusted it in that sense for a while, certainly not for distribution. But I think because everyone else has been. So the bar has been so low with what they've managed to get from a lot of these platforms until kind of fairly recently. I feel like anyone is kind of like, okay, if they want to talk licensing, fantastic, we're here. From what I gather, they were willing to talk numbers that were sort of not something that a large publisher would kind of scoff at and walk away from. And they have got. They've got a select group of publishers. I think there's sort of just seven, seven or eight. But those publishers, they do have. I feel like several of them are quite savvy now at how they Negotiate in some of these deals. And yeah, I think there's some interesting things, like in terms of. It's very much. I mean, all of them are a bit of a wait and see. There's no, oh, this is the one, you know, thank goodness. We're going to sort of pin our hopes on this. They're all very much wait and see. Let's see how this unfolds. But at the end of the year, it came in as a. Finally, you've understood that what you have so far isn't enough to make your LLM competitive. You do need publisher quality content. And finally you're kind of, you know, you're opening the door certainly with like a select group. So, yeah, we'll have to see. We're going to have to do this scorecard again at the end of next year and see how these things, if they fall off that kind of number three spot. But, yeah, for now, there's hope around it.

D (39:21)

Yeah. And I would say, I think that's really interesting because I think the other part of this too is that for better or for worse, Meta has a long history of paying publishers. And many companies on this list don't. Right. Meta's paid what, dozens. I can't remember how many now. So long ago, I think I blast out my memory. But Tim, I think Tim and Jess, you probably know way better than I do, but, you know, Meta has in the past paid, especially news publishers lots of money for content on their platform. And so taking that money away. And what I was just going to say, though, I think, you know, it just shows the, you know, sort of how publishers forget what happened in the past is that even though that is a good thing in the sense that they understand this dynamic of paying for content. And, you know, I think one of the criticisms, especially of companies like Perplexity, is that they, they don't really understand that dynamic. In the same way, the other side of the coin is that that money then disappeared, you know, sort of overnight for a lot of news publishers. And a lot of them sort of cease to exist in the same way that they did before because of that money that disappeared overnight. Which is scary. And you would think people would remember that and be more cautious of Meta being such a big player in this space. But like Jess said, if anything, it was when these deals were announced, it seemed like, oh, great, here's another big tech company that wants to pay us for our content. And they've done this before. They know how this works. They have the experience. And, you know, for Some reason, at least at the end of last year there was less. Oh, wait, wait, they have done this before. And how did that play out?

A (41:06)

Lucy, with the football meme lives on.

D (41:09)

Exactly.

C (41:11)

Just to add to that just like a small detail, but I feel like it hints at kind of the sophistication of some of these setups now in terms of how they've evolved. But one of the things I think is interesting is that apparently some of the publisher partners who have these licensing deals with Meta, they're still blocking their crawler, but they're supplying their content to meta via a server. And that works for meta because they get the information faster, a bit more efficiently without having to sort of crawl multiple times. And that supposedly helps them process less data, which means processing fewer tokens kind of basically makes it cheaper for the LLM. And it's good for the publisher too because they're not being hit multiple times. They can kind of control their blocking strategy more easily, but they're not cutting off a platform that is actually paying them. So I just think that is going to be maybe getting a bit geeky into the weeds there. But I think that that's interesting because if those costs do become lower for the AI companies, then it may free up, may free up money that wasn't there before, that they haven't prioritized sort of publishers for before. But that may be completely wishful thinking, who knows? But I thought it was interesting.

A (42:31)

Okay, so we've got Meta's X factor is the way that it's going about accessing publishers content. Amazon's X factor is the New York Times deal. Sounds like Google's X factor is. It's Google. That's our three through five. Now we're at the top two. And the top two. Kamiko, were you surprised at the top two and how things fell in Justin and Sarah's list?

B (42:57)

Almost yes and no because. And I don't want to spoil the surprise, so I'll try to keep this as conspicuous as I can. But number two has almost as many lawsuits as it has deals. But in its defense, you know, it was, I feel like it was kind of what set the tone for said deals. Right. Really early player here. So I'm like surprised that it was number two and not number one, but also not surprised to see it within the top two, I would imagine. Was this one that you guys kind of went back and forth about as well?

D (43:32)

Not necessarily, but I was kind of surprised how the reporting led us to this, to be honest. I don't know if you felt this way, Jess. But I think when I started out working on this with you, I was more skeptical of OpenAI having a, you.

A (43:48)

Know, and open AI is the number.

D (43:50)

Oh, sorry, I gave it away. Yeah. OpenAI is number two. And I think I was surprised by how the reporting led it to be number two because I thought all the lawsuits, you know, publishers in general being like, oh, they're scraping all of our content, not paying us money, you know, that's sort of the narrative around OpenAI for a lot of these publishers. But when you actually talk to people who are leading partnerships, you know, business development execs, people like that at publishers, they're like, oh, but OpenAI is paying people a lot of money. So, you know, if you're going to do a scorecard on this, of course they have to be in the top spot because that's where the real money is coming from. And they're willing to pay publishers. They have a, you know, I can't remember how many are on that scorecard, but they have a ton of deals with publishers. Yes, they're mainly big ones, but at the end of the day they're the most active, biggest player in the space. So, you know, we like that. And I was like, oh, okay, yeah.

C (44:51)

And also they, they scored high for just when there's been so much, well, such a lack of transparency from some of the platforms in terms of data sharing and things, it is something that comes up a lot. The ones that do have partnerships with OpenAI, although they don't kind of reveal everything they're getting from them, it's definitely a two way street. They're getting a heads up on what tech is coming up, they're getting data, whether it's prompt data or other kinds of data back that's helping them in terms of how it informs their strategy. So there were things like that that pointed out other than just the hardcore cash. But I think everyone, well, everyone that I spoke to is definitely kind of looking at this year, how it unfolds, whether they still kind of retain that mantle as being one of the more willing to pay just because they're in a race themselves in terms of building out the agentic shopping experience. And so I know that publishers are kind of keen to sort of stay in that conversation and remain sort of top of mind in terms of how important they are in that journey too, in terms of the signals they provide. But I think there is a little bit of, okay, you've done okay by us. All right. Considering how low the bar is but this year and next year when these deals start to renew, then we'll really see what the longevity is of this with OpenAI.

A (46:23)

So yeah, and OpenAI has also edged into a new type of publisher deal with a new tier of publisher with the big Disney announcement that came right ahead of the holidays last year to license Disney's intellectual property for people to be creating videos with Sora, which obviously, Kimiko, we talked about this on the show, but you could see an NBC Universal, a Paramount, a Warner, a Netflix, maybe a Netflix with Warner, maybe a Paramount with Warner. We have no idea how that's going to transpire. But these major media companies with a lot of IP doing a new kind of deal with OpenAI. There's also the expectation at some point this year OpenAI will roll out an advertising product, maybe that opens it up to a rev share model that could then bring mid to long tail publishers into the fold. So yeah, OpenAI seems to have a good amount of upside. I think you both have made very reasoned arguments for its position at number two. And now I wish I could do a drum roll like Ellen Griswold in National Lampoon's Christmas Vacation. I cannot. I would sound like, I think the mother in law who just like a lot. But drumroll sound in your minds, please. The number one position. The position that maybe was my biggest surprise when reading this list. Kimiko, I don't know how you felt about the number one. Justin. Sarah came to.

B (48:00)

I was a little surprised because I feel like. And when we talk about like trust, actually I'm just gonna go spoil it from the very beginning. Is that okay or should we. Okay. The number one spot was Microsoft. And I think I was surprised only slightly, mostly because it hasn't gotten as much buzz in the amount of complaints that I hear about Copilot just as a product is insane, but. And they're also like a really big legacy player in this space. I almost had the same expectations of them as I did of Google. But yeah, they are, as you guys called them, the unexpected darling of AI licensing deals. So why? Why did they get raised so high? What's working for them? What's their X factor?

D (48:45)

It's funny, it was surprising for both of you guys because I actually think this one was the most obvious for me when I was working on it and you know, we were talking to Jess about it, I was like, I feel like Microsoft has to be number one because at least according to all the conversations I was having towards the end of the year, every publishing exact in Specifically in this space was like, so excited about what Microsoft was offering. What's funny is what they're offering is still unclear. You know, they haven't really out yet, but the opportunity there for publishers people seemed really excited about, had really nothing bad to say about Microsoft offering, you know, a partnership with publishers. Because, you know, like you said, Copilot, maybe a lot of people aren't necessarily super familiar, but I think the fact.

A (49:40)

That Microsoft were too familiar from the standards.

D (49:43)

Yeah, but you know, Microsoft, like, there's that enterprise factor here, right? Millions and millions of people just have Microsoft and are going to be using Copilot in the same way that Google has Gemini. And I think that is really enticing for publishers. And they just seem really excited about what it could mean, even if that still seems unclear. Right, Jess? I mean, what were you hearing?

C (50:07)

Yeah, no, definitely. There was a lot of excitement around it. Again, partly because of just the backlash of what they'd experienced. It was kind of like, thank goodness a big tech company is coming out, putting at stake in the ground and saying, yes, we're willing to talk to you about paying. It's come down to that basic thing before 2025, it wasn't a given that they were even going to at all. It was just, everything is fair use, et cetera, et cetera. Everyone's being scraped and the training data's all gone. So this was really a kind of. Everyone I've asked about it and who has had conversations with about it has said their rhetoric is on point. The message they have, simply put, is we want to work with you. You know, that was a big enticement. And sort of a part of why I think publishers have been excited is that they're not saying, okay, this is what we're doing, this is what we're willing to pay. Take it or leave it. That's it. You've got no control. We're gonna acquiesce to, you know, we're gonna sort of condescend to talk to you about this. It's very much. We don't really know how this is gonna shake out either. Let's design and build this together. Do you wanna come in on us early on and we'll sort of work with you on building it from the ground up? And that was a very different message from what they'd been getting until that point. So I do think that the idea of those two things, even though they sound kind of more idealistic, but it's what publishers needed to hear at the time. There's still a kind of wait and see, of course, to see how it unfolds. And one or two have said the rhetoric may be on point, but it doesn't quite match their crawler activity and things like this. But another thing to remember is just that these teams that have been kind of agreeing these deals, they've been small within these AI companies and those may build, and I hope that they do. But yeah, there's been a clear path of who the right people are to speak to on this. They've been reachable. They seem genuinely willing to figure out a more sustainable kind of pipeline for publishers here rather than just saying, yeah, can we use this for our purposes? And obviously they have their own business agenda. Of course they do. But for now, for the short term at least, and at the moment, unfortunately there is a lot of short termism still around because things are so difficult for the short term. They are sort of publishers kind of favorite and I hope that it does lead to kind of a good a model that everyone else can sort of build off. And that was another thing I remember sort of from those early conversations when we were like, why? Why? What's so exciting about Microsoft suddenly doing this? And part of it was, well, if they do it, it will hopefully encourage others to and who knows what. Exactly. There's probably like a whole range of reasons why Meta came out with it. It's not just looking at Microsoft and going, oh, okay, us too. But. But it definitely was a signal of intent. And so publishers really needed that at the time. They needed a big tech company to come out and say, do you know what? Yeah, we want to work with publishers and fix some of the wrongs that have been done.

A (53:29)

And probably helps that they've hired a big publishing exec to bring into the mix. They hired Julia Bazer, who is the chief Product officer at Bloomberg Media, who's now overseeing news product at Microsoft right there.

D (53:43)

That is a good point. Because to have someone in the room that has worked as a publisher probably helps publishers feel very excited about the pay per use model in particular because I think that's what publishers have really been asking for and like the sound of these days rather than, you know, big lump sum deals. I know we've talked about this on the DJ podcast before and here's a huge tech company coming and saying we want to do it that way too. We want to pay per use, you know, and I feel like that's been really exciting for publishers to see something that they've really wanted being, you know, being built with their help hopefully. But it sounds like right now they are really collaborating with, you know, publishers in the room.

A (54:33)

Cool. So let's recap our list of these top eight or top five with some honorable mentions, dishonorable mentions. So in the number eight position we have anthropic. Their X factor is they're X'd out of the situation currently because they're not doing deals with publishers. Number seven, pro rata. Their X factor, they're helping publishers to power search on the publisher's properties which is a need a lot of publishers have and helpful that there's also money involved with that. Number six, perplexity early to do deals. Did a rev share model, has opened up to publishers but has not actually been sharing all that much revenue with publishers and has not opened up all that much to all that many publishers. Then our top five, Google X factor. It's Google, plain and simple like that. Number four, Amazon X factor. The New York Times has vouched for Amazon at the same time as the New York Times has filed a lawsuit against OpenAI among others. Number three, Meta. Its X factor being the way in which it's accessing publishers content and not scraping their sites, which is low cost for meta but then also more advantageous for the publishers or at least less cumbersome from the sounds of it. Number two, OpenAI. It has ChatGPT. It's also been doing these deals for the longest. It's the one that kicked off this entire thing that set that initial content licensing model has a lot of upside with the ad product and the new types of deals as exemplified by the Disney deal that was recently announced. And number one, Microsoft. Its X factor seems to be the pay per use model. It's also been the most thoughtful and Derek say considerate in terms of what the incentives are for publishers.

D (56:43)

Yeah, that sounds great to me. Tim, you should have written it.

A (56:49)

Well, now we have to see how this list changes over the next. That's going to be six months, two years or even. I mean Sarah will be at the Digiday Publishing Summit in a little over two months. Very curious to hear from the publishers there on how they feel about these rankings.

D (57:06)

Totally. Yeah. I would love to keep doing this because I'm sure by this time next year we could do another scorecard and things will definitely be different.

A (57:18)

All right, well with that Justin, Sarah, thanks so much for joining Kamikona.

C (57:22)

Thank you so much.

D (57:23)

Thank you.

A (57:31)

Thanks for listening to this episode of the Digiday podcast. If you enjoyed it, please leave us. A rating and a review on Apple, Apple Podcasts, Spotify, or wherever you're listening. Get more from Digiday with our daily newsletter sent out each weekday morning. Visit digiday.comnewsletters to sign up.