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OpenAI’s Licensing Agreements with Publishers

OpenAI has agreed to pay Dotdash Meredith $16 million annually to use the publisher’s content. This amount covers only the fixed costs, with additional variable payments calculated later. These payments are for using the content in products like ChatGPT. This information comes from the quarterly financial reports released by Chris Halpin, Chief Financial Officer of IAC, Dotdash Meredith’s parent company. The exact amount of additional revenue from this deal is unknown.

AdWeek reported on this deal, noticing the item in the quarterly financials. In the third quarter, there was a $4.1 million increase in revenue from licenses. The CFO noted that this money came from OpenAI and hinted at what they could expect annually from OpenAI, amounting to at least $16 million.

OpenAI’s licensing of content from Dotdash Meredith was announced in May, but the terms were not disclosed. OpenAI has similar agreements with many other publishers. For instance, OpenAI pays Axel Springer several million euros. As a result, ChatGPT often provides information from Axel Springer’s publications like Bild and Welt. Besides financial compensation, OpenAI also offers expertise and support for the publisher’s AI strategy.

Another partnership exists between OpenAI and News Corp, one of the world’s largest publishers, owning titles like The Sun, The Wall Street Journal, and The Times. OpenAI is expected to pay around $250 million over five years, though this figure is not confirmed. Sam Altman, OpenAI’s CEO, described this partnership as a proud moment for journalism and technology. However, publishers without deals with OpenAI may see things differently, as they miss out on licensing revenue and their content is less visible in OpenAI’s products.

OpenAI faces challenges as it can only use content for training its AI models if it is either licensed or freely available. This limits the data available to them. OpenAI cannot afford to make costly deals with every publisher globally. The company is already on shaky financial ground.

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