From Handshakes to Lawsuits: AI's Rocky Road to Content Deals
We are seeing more opening moves between AI giants and content publishers in the legal battle around AI and copyright this week.
OpenAI teased their SearchGPT prototype, which is a search engine with access to the real-time web — with an emphasis that it was developed in collaboration with news outlets like The Wall Street Journal, Associated Press, and Vox Media.
AI content licensing deals could be a pivotal lifeline for media companies, as advertising revenue has shrunk (from ~50% to 23%) over the last two decades. While companies like The New York Times bounced back via an increase in subscription revenue (about 10M subscribers in 2023, growing ~8% every year). AI content licensing deals could be a lucrative revenue stream for news companies beyond their subscription business.
As potential analog to AI content licensing, it's worth looking at how streaming has evolved to become significant revenue drivers for music rightsholders.
In 2023 alone, Spotify paid out $9B to music rights holders (with the major labels Universal Music Group (UMG), Warner, and Sony taking the lion’s share). As a back-of-napkin estimate, streaming could account for almost 25% of UMG’s revenue (it reported about $12B in total revenue in 2023). Interestingly, the major labels also hold equity stakes in the streaming companies: as of April 2023, Warner Music Group, Sony, and Universal Music Group together owned 18% of Spotify.
But with generative AI, it’s not a cut-and-dried deal. In fact, it just got quite spicy. IP law professor Ed Lee pointed to the pushback from AI music generators Suno and Udio to the legal letters sent by major music rights holders.
The startups made a forceful fair use defense AND raised a defense of copyright misuse by the music labels. In playground terms: the music labels (say, the big kids) have a lot of toys (their music) and they say no one can play with them without their permission. The two smaller kids (the startups) in retaliation, say:
“We should be allowed to play with them too, because we are using them in a new way and different way that doesn’t hurt anyone” (fair use defense)
And then they go even further to say
“Hey these big kids are not letting anyone else have fun in the playground at all – this is not just about protecting their toys, but about controlling the whole playground”
Note: Obviously this is my humble read, and very open to a discussion/ breakdown with a legal IP expert!
This could be the opening of a long legal battle, and potentially, a significant landmark case for the future of creativity.
Inspiration
A picture paints a thousand words — in this case, a better prompt for music? Music producer Daniel Rowland created this song from a photo of their daughter playing in their backyard.
Chimerian creations: I'm blown away by creative director Phil Langer’s “Living Hybrids”that bring his generated portraits to life using Runway’s latest model. Can't wait to give it a go!
Latest Releases
OpenAI announces SearchGPT, its AI-powered search engine:OpenAI has slowly been bringing ChatGPT more in touch with the real-time web. It recently announced SearchGPT, an AI-powered search engine with real-time access to information across the internet. The search engine starts with a large textbox that asks the user “What are you looking for?” But rather than returning a plain list of links, SearchGPT tries to organize and make sense of them.
Meta is rolling out its AI Studio in the US for creators to build AI chatbots: Meta announced that it is rolling out its AI studio to all creators in the U.S. to let them make personalized AI-powered chatbots. Users can build the bot for caption creation, post formatting, or meme generation. These chatbots work across Meta properties, including Instagram, Messenger, WhatsApp and the web. Meta also announced their latest release of SAM (Segment Anything Model) which enables object identification and segmentation in images and videos.
Runway announces even faster, cheaper AI video model Gen-3 Alpha Turbo: New York-based startup Runway turned heads with its new Gen-3 Alpha Turbo, which will be “rolling out…with significantly lower pricing”. In its post, Runway said that the Turbo model was “7x faster than the original Gen-3 Alpha” and that users could generate new videos in “real-time,” or at least close to it.
Canva adds a new generative AI platform to its growing creative empire: Canva has announced plans to acquire Leonardo.ai, an Australian generative AI content and research startup, as part of its goal to build a “world-class suite of visual AI tools.” While financial terms haven’t been disclosed, the deal will see Canva gain access to Leonardo.ai’s lineup of user-customizable text-to-image and text-to-video generators.
Avi unveiled Friend, an AI wearable designed to combat loneliness by providing constant companionship.
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