Ben Shepherd, in his newsletter Signal, with what you need to know in marketing and advertising.
Welcome back to work. AI and content compensation was the big story over the break, here's a summary of what it means and why it's important.
Original content powers the web, but those who create it are often the least rewarded. AI could make this exponentially worse.
The biggest media story over the last month has revolved around the issue of AI platforms and the debate over how they compensate original content creators and media companies for using their creative works in the training and evolution of their models.
The issue is simple. AI models require information to be ingested in order to create a base level of knowledge. A good model will need this information to be ingested and refreshed frequently. Sourced, vetted and professional content is an extremely important input for this if an AI platform is going to be able to create value that is based on timely, accurate and credible sources.
The stakes are high as the financial value at stake is high. Open AI is already valued north of $100 billion USD, but if you think about the other main businesses in the AI fight (Google, Amazon, MSFT, Meta, Apple) they have a collective current market cap north of $8 trillion USD, with many of these businesses seeing 50%+ share price growth in 2023 alone fueled by the forecast future value of their AI platforms.
In my view the issue is simple. Without high quality content these AI platforms are more 'A' than 'I', which materially limits their ability to be useful and value creating. And in the scheme of trillions of dollars of wealth creation, it's pretty normal for the content inputs to this wealth creation to feel they have a right to compensation at a level commensurate with the technological inputs.
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