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June 5, 2024, 2:57 p.m.
Business Models
LINK:  ➚   |   Posted by: Sarah Scire   |   June 5, 2024

Shortly before The Atlantic announced “a product and content” partnership with OpenAI, the magazine published a piece by The Information CEO and founder Jessica Lessin that argued “media companies are making a huge mistake with AI.”

“For as long as I have reported on internet companies, I have watched news leaders try to bend their businesses to the will of Apple, Google, Meta, and more,” Lessin wrote. “Chasing tech’s distribution and cash, news firms strike deals to try to ride out the next digital wave. They make concessions to platforms that attempt to take all of the audience (and trust) that great journalism attracts, without ever having to do the complicated and expensive work of the journalism itself. And it never, ever works as planned.”

Shortly after The Atlantic announced the partnership, the magazine’s senior editor overseeing technology coverage, Damon Beres, called the deal “a devil’s bargain.” The Atlantic Union said in a statement that quoted Lessin’s piece that members are “deeply troubled by the opaque agreement.”

It’s into that context that Atlantic CEO Nicholas Thompson posted a short video on his LinkedIn page last week. (Thompson is a power LinkedIn user; his newsletter there sharing “the best things to read” has more than 400,000 subscribers.) The four-ish-minute video is an interesting artifact — one we might point to when asked “what were they thinking?” should these deals go south.

Thompson says the OpenAI partnership will “surface” Atlantic journalism in OpenAI products and that the technology may eventually help readers discover stories in their app or yield “other cool things” for The Atlantic. But the video is primarily a response to the criticism advanced by Lessin, Beres, and others in the news industry:

There’s a critique, of course, by many people in my industry that media companies should have learned a lesson from the past 15 years. We should not work with the tech platforms. There are many examples where these partnerships have gone wrong.

Most famously, Facebook paid a bunch of media companies to hire lots of journalists to create content for Facebook; Facebook then pulled the money; companies were in a lot of trouble. More recently, a lot of companies that have become completely dependent on Google Search have been in a world of hurt as Google has trained its algorithms. That is all fair. And it is definitely true that the tech platforms will always think of their economic interest first. If they say they’re creating a product to save journalism, great. But if that product doesn’t make the money — doesn’t work — they will pull it. So what do I think? There are good ways of working with them still, and one should just be aware of those basic economics.

The Atlantic announced in April that it is profitable and has hit the the 1 million subscriber mark. More than half of those subscribers are digital-only. Thompson said Facebook advertising played “an important role” in helping the outlet acquire new subscribers:

Facebook, so yes, it was a bad idea for companies to make those video partnerships. On the other hand, Facebook advertising is an amazing tool for getting people to subscribe to serious publications. It is one of the main tools that we use to make our subscription business at The Atlantic — which has been the main thing driving us towards profitability — successful.

Thompson says publishers “wholly dependent” on Google Search have “a big problem.” As the tech company experiments (and rolls back, in some memorable cases) the way it incorporates AI into search, “you might as well get as much traffic as you can from Google.”

Thompson, who interviewed OpenAI’s CEO Sam Altman at the UN’s “AI for Good” Summit last week, sees partnerships like the one with OpenAI in that context:

Google Search is certainly going to decline — or is likely going to decline — in the coming years as it moves to a more chat-based interface. That’s a little frightening. But that’s also one reason why I’m excited about the partnership with OpenAI. Who knows what search will look like, but the closer you are to the AI companies —  and if you’re working with them, helping to work through the future of search and with your stories in it — you will get more readers than if you aren’t.

The Wall Street Journal recently reported The Atlantic has about 100,000 users who read the magazine through Apple News. Thompson acknowledges that Apple may one day “shut down the product or change the rules.” But in the meantime, he says:

My view is if it’s good for the company now, work with them. Just be prepared and hedge for it. Don’t become entirely dependent on it. Basically, look for deals that are good for you with eyes open about what could go wrong if the incentives of the company change.

Never become wholly dependent, never wholly trust. But also remember, these platforms are the operating system of this new world we live in. That is true of the old platforms. It is true of the new AI platforms.

Media plays such an important role in civic life and it’s what I have devoted my career to — trying to figure out sustainable business models for high-quality journalism. I care a ton about trying to find the right models to work with these companies.

You can see the video on LinkedIn here.

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