Microsoft to Create AI Content Licensing App Store: Publisher Compensation Landscape to Change

3 Key Changes in AI Content Licensing

  • Microsoft launches the industry’s first centralized AI content licensing platform
  • Publishers directly set prices and terms of use, usage-based revenue model
  • Major media outlets such as AP, USA Today, and People Inc. already participating

What happened?

Microsoft has launched the Publisher Content Marketplace (PCM), a centralized marketplace where AI companies pay publishers when using news or content for training.[The Verge]

The key is this: Publishers directly set licensing terms and prices for their content. AI companies find the content they need in this marketplace and purchase licenses. Usage-based reporting is also provided, allowing publishers to see what content is being used where and how much.[Search Engine Land]

AP, USA Today, and People Inc. have already announced their participation. The first buyer is Microsoft’s Copilot.[Windows Central]

Why is it important?

Until now, AI content licensing has been done through one-off, lump-sum contracts with individual publishers, like OpenAI. In short, it’s structured like a buffet: pay a large sum at once and use it unlimitedly.

Microsoft has turned this around. It’s an à la carte system. People Inc. CEO Neil Vogel compared the deal with OpenAI to “all-you-can-eat” and the deal with Microsoft to “à la carte.”[Digiday]

Frankly, this is more reasonable from the publisher’s perspective. You can see how much your content is actually being used, and continuous revenue is generated accordingly. Lump-sum contracts are a one-time payment, but this is a recurring revenue model.

Industry reviews are also positive. Microsoft received the highest score in Digiday’s Big Tech AI licensing evaluation. High scores for willingness to collaborate, communication, and willingness to pay.

What will happen in the future?

Personally, I think this is likely to become the industry standard. Publishers have been very dissatisfied with their content being used for AI training without permission, and this model directly addresses that problem.

But there are also variables. Microsoft has not yet disclosed how much it will take as a commission. The actual revenue for publishers will vary depending on the commission rate. And we need to see if OpenAI or Google will release similar platforms.

Frequently Asked Questions (FAQ)

Q: Can any publisher participate?

A: Currently, only invited publishers can participate. Microsoft has stated that it plans to gradually expand. It will expand from large media outlets to small specialized media outlets.

Q: Can I participate even if I have an existing contract with OpenAI?

A: Yes, it is possible. People Inc. participated in the Microsoft PCM while having a lump-sum contract with OpenAI. The two contracts do not conflict. However, it is necessary to check the exclusivity clauses of each contract.

Q: How is revenue distributed?

A: Microsoft takes a certain percentage as a commission, and the rest goes to the publisher. The exact commission rate has not been disclosed. Since publishers set their own prices, the revenue structure may vary for each.


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References

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