The old saw about the stages of grief may need updating for the digital media age: denial, anger, bargaining, and then — if you are a large newspaper company — a licensing deal.
That, at least, is the picture emerging from this week's second-quarter earnings reports from The New York Times Company, News Corporation, USA Today Company, and People Inc., all of which acknowledged that traffic declines driven by artificial intelligence have become an unavoidable feature of their businesses.
The response, across all four companies, has been a version of the same strategy: license content to AI companies where possible, sue or block them where it is not, and extract more revenue from the diminishing number of readers who still arrive through the front door.
Robert Thomson, the chief executive of News Corporation, offered perhaps the most succinct encapsulation of this approach, describing it as a "woo and sue" framework. (One imagines the phrase tested well in internal meetings.)
The licensing agreements represent a practical acknowledgment that the traffic AI systems have diverted is unlikely to return. The lawsuits, meanwhile, serve as both a revenue-recovery mechanism and a form of institutional theater — a way for publishers to signal to shareholders, and to themselves, that they have not simply accepted their displacement.
The third element, squeezing existing readers, is the quietest part of the strategy but perhaps the most consequential. It suggests that the major publishers have concluded, at least implicitly, that the era of mass-audience digital reach is contracting, and that the business going forward will be built on the readers willing to pay rather than the millions who once arrived free via search.
Whether this amounts to a sustainable model or an orderly retreat remains, for now, an open question — though Mr. Thomson's memorable phrase suggests the industry has at least found its vocabulary.
Original story published in adweek.com: "What Publisher Earnings Reveal About Their AI Strategies"