Microsoft Launches AI Content Licensing App Store: A Shift in Publisher Compensation

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AI Content Licensing: 3 Key Changes

  • Microsoft launches the industry’s first centralized AI content licensing platform
  • Publishers set their own prices and terms; usage-based revenue model
  • Major media including Associated Press, USA Today, and People Inc. already participating

What Happened?

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

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

Associated Press, 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 a 1:1 lump-sum contract with individual publishers like OpenAI. Simply put, it’s like a buffet where you pay a large amount at once and use it unlimitedly.

Microsoft turned this upside down. This is the a la carte approach. People Inc. CEO Neil Vogel compared the OpenAI contract to “All You Can Eat” and the Microsoft contract to “a la carte.” You can see how much your content is actually being used and generate consistent revenue accordingly. Lump-sum contracts end at once, 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. It scored high in willingness to collaborate, communication, and payment intent.

What Will Happen in the Future?

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

But there are variables too. How much Microsoft takes as a commission has not been disclosed. Actual publisher revenue will vary depending on the commission rate. And whether OpenAI or Google will launch a similar platform remains to be seen.

Frequently Asked Questions (FAQ)

Q: Can all publishers participate?

A: Currently, only invited publishers can participate. Microsoft said it plans to expand gradually. It plans to start with large media and expand to small specialized media.

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

A: Yes. People Inc. also joined Microsoft PCM under an existing lump-sum contract with OpenAI. The two contracts do not conflict. However, you should 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.

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References

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