OpenAI to license Dotdash Meredith content for $16M annually

The world of digital publishing continues to evolve as major technology companies seek to secure content licensing deals for AI training purposes.

Deal specifics: OpenAI has entered into a significant content licensing agreement with Dotdash Meredith, committing to pay at least $16 million annually for access to the publisher’s content.

• The licensing arrangement, announced in May, provides OpenAI with access to content from major publications including People, Better Homes & Gardens, and InStyle
• Financial details emerged during a recent earnings call, which revealed a $4.1 million year-over-year increase in licensing revenue for Q3 2024, primarily attributed to the OpenAI deal
• The agreement includes variable components that will be calculated and recognized in future periods

Industry context: This deal represents a growing trend of AI companies establishing formal partnerships with traditional media organizations.

• Vox Media has also secured a similar licensing agreement with OpenAI
• These partnerships signal a shift in how AI companies are approaching content acquisition, moving from unauthorized scraping to legitimate licensing arrangements
• Publishers are finding new revenue streams by monetizing their content archives for AI training purposes

Strategic implications: The substantial financial commitment underscores the value that AI companies place on high-quality, professionally produced content.

• The $16 million annual minimum demonstrates OpenAI’s willingness to invest significantly in training data
• Traditional publishers are positioning themselves to benefit from the AI industry’s need for reliable, well-curated content
• This type of arrangement could set precedents for future deals between AI companies and content creators

Future considerations: As AI companies continue to seek quality training data, the value of established media properties could increase, potentially reshaping the economics of digital publishing.

• The inclusion of variable components in the deal suggests potential upside based on usage or performance metrics
• Other publishers may use this deal as a benchmark in their own AI licensing negotiations
• Questions remain about how these licensing arrangements will impact the development and output of AI models