#MediaRevenue - David Clinch

Welcome to my weekly update on all things #MediaRevenue. The news never stops on this beat, and this week was no exception.

There have been some more huge deals announced between news publishers and tech companies, and more CEO's and Publishers have been calling me to get guidance on what seems to be an increasinly bifurcated future for the news industry.

Most publishers seem to have concluded that the future involves them doing smart deals with tech companies, that provide licensing fees and access to technology, with some protections and guardrails in place, and then using that cash and tech to strengthen their own businesses and own and retain their own audience.

A reminder that the high level advice I have been giving publishers when they think about this future are:

Own you own audience - my advice is that area is that "retention is the new acquisition," and smart publishers are investing in products and strategies that retain their existing audience, minimize churn and optimize for increased monetization.

Advertising Innovation - my advice in this area is to develop innovative ways to sell against validated first party data, contextual targeting and attention time metrics.

AI Optimization - my advice here is that news publishers need to optimize their content, data and business models to harness the power of AI technology, and get a fair share of the revenue it will drive.

The best way to harness the power of AI in your newsroom is use cases that involve highly-trained AI models in products connected only to your own content. This approach can safely build engagement, efficiencies and revenue around your original journalism.

Combine this with a similar approach on the business side, working with trusted partners who apply highly-trained, and strictly constrained, AI within their revenue and content optimization products can drive significant reader revenue and advertising revenue.

The full value of licensing deals, including those announced this week, involve news publishers having immediate use cases for the AI technology allocated within those deals. Without those immediate use cases, the value of access to that technology is significantly reduced.

DM or email me if you want more specific advice in any of these areas.

A short list of #MediaRevenue stories this week

OpenAI, WSJ Owner News Corp Strike Content Deal Valued at Over $250 Million - The deal could be worth more than $250 million over five years, including compensation in the form of cash and credits for use of OpenAI technology.

Among the other publishing deals OpenAI has done, Axel Springer’s three-year pact, which includes use of its content for both training and display, is worth at least $25 million to $30 million over three years, according to people familiar with the deals. The FT, whose deal also includes both display and training, is worth $5 million to $10 million a year, according to a person familiar with the matter. 

The AP’s deal, in the single-digit millions a year, is more narrowly focused on the use of text archives for training. The news organization is in talks with OpenAI about the use of its content for display, according to another person. - WSJ

Google threatens to pause Google News Initiative funding in U.S. - Google is warning nonprofit newsrooms that passage of a new California bill would jeopardize the firm's future investments in the U.S. news industry, sources told Axios. - Axios.

Fears Google could down-rank publishers who decline to use Privacy Sandbox - Could Google down-rank publishers who decline to use its new Privacy Sandbox online advertising system, which is scheduled to come online in early 2025? So far the search giant has not offered any assurance that declining to use Sandbox, the Google-controlled system which will replace publisher cookies on Chrome, won’t impact search rankings. - Press Gazette.

Vox Launches Membership Program - Not only will Vox debut a refreshed website on Tuesday morning to mark its 10th trip around the sun (fear not, the trademark yellow is not going away), it will also launch a membership program, its executives told me Monday, as the digital publisher becomes the latest news outlet to lean into subscriptions to diversify and grow its revenue stream. - CNN.

As clicks dry up for news sites, could Apple’s news app be a lifeline? - (Daily) Beast on track to make between $3-4 million in revenue this year from Apple News alone — more than its own standalone subscription program, and without much additional cost. - Semafor.

Publishers double down on subscriptions as broader challenges mount - Major publishers say they’re stepping up their focus on subscriptions as a core revenue driver as monetizing their audiences via other means – such as advertising and commerce – becomes more challenging. Many believe robust subscription revenue will be crucial for maintaining viable businesses as the media landscape shifts quickly around them. - Toolkits.

Washington Post C.E.O. Will Lewis unveiled his plan - The Washington Post announced plans Wednesday to create new tiers of subscription offerings, in a bid to draw more money from the publication’s readership and to help address a significant revenue shortfall. While few details were provided about pricing and timing, the new offerings will include a membership program and new subscription tiers called Post Pro and Post Plus. While some tiers will be primarily marketed to the current base of individual subscribers, others will be focused on generating new revenue from companies. - Washington Post.

Digital Markets Bill passed paving way for publisher ‘level playing field’ with big tech - The UK has paved the way for Australia-style payments to news publishers from tech giants as the Digital Markets, Competition and Consumers Bill was passed by Parliament. The law will enable tech companies such as Google, Facebook, Apple and others to be given “strategic market status” and be regulated by the Digital Markets Unit (a division of the Competition and Markets Authority). - Press Gazette.

Don’t let flare-ups distract from progress toward saving local news - Legislative sausage-making is creating some drama around proposals to save local journalism. Kerfuffles are inevitable with so much at stake. They should not distract from the bigger picture, which is that major, bipartisan solutions to the local journalism crisis are emerging and taking effect — at the state level, at least. - Seattle Times.

BETMGM TO BECOME AP’S OFFICIAL ODDS PROVIDER - Through the agreement, BetMGM’s odds will appear in AP’s daily sports odds fixtures, game previews and other sports stories where odds are mentioned. AP will retain editorial control of all content. - AP.

Senators to debut a measure providing postal service relief for newspapers - A bipartisan group of Senators will introduce a bill Tuesday that will require the U.S. Postal Service to perform to a certain level before it can apply a surcharge to periodicals, or local newspapers, to deliver their papers. Facing a delivery worker crisis, local newspapers have increasingly turned to the USPS to deliver newspapers to subscribers. - Axios.

GBH cuts staff and programming - GBH announced layoffs of 31 staff members on Wednesday, representing 4% of its overall workforce. In late March GBH management warned staff about potential job cuts to address a large budget deficit. - GBH.

Riverfront Times sale and layoff of news staff signals end of 46-year era for St. Louis alt-weekly - The Riverfront Times, St. Louis’ alt-weekly newspaper, is no more, at least in its current state. Big Lou Media has sold the paper to an undisclosed buyer, Sarah Fenske, the alt-weekly’s former executive editor, said Wednesday. STLPR.

A Black newspaper in Washington state gets a second life: ‘We can’t let the Black Lens die’ - The Spokane community revived the paper to capture the nuance of the Black community – beyond the ‘feel-good stories’ - The Guardian.

More Than $1.6 Million in Grants to 13 Local News Organizations - The inaugural round of Press Forward Chicago grants will support capacity building and peer learning - CCT.