Paywall violation ‘eviscerates’ fair use defense: What OpenAI-NYT twist means for publishers

What we’re seeing
  • OpenAI’s head of ChatGPT Nick Turley wrote that “[p]ublishers” face an “existential threat” from OpenAI’s products, which, he said, “are largely substitutive, period” and “will get more and more substitutive as they get better.” 
  • A Microsoft executive described how defendants “started a ‘doom loop’ that will hurt the performance of our models and the entire web at the same time.” 
  • OpenAI co-founder and president Greg Brockman wrote that OpenAI’s models are “particularly good at predicting text of news articles,” “excellent at news,” and “very good at any news task.” 
  • Microsoft recorded 83-93% drops in “click-through rates” for The New York Times’ and Daily News’ domains when comparing click-through rates for its traditional Bing Search engine with click-through rates for its Copilot chatbot. 
  • Microsoft’s CEO Satya Nadella testified that conversing with chatbots “has substituted … giving you the information right there on the website on the AI platform versus needing to go to the underlying source.”

A new tranche of internal emails and analysis in The New York Times’ lawsuit against OpenAI and Microsoft spells out what publishers have suspected for years: tech giants treated their journalism as free fuel for AI products that could ultimately wipe out the businesses that created it. 

The filings, unsealed last Thursday, show executives talking about the “gazillions” of dollars at stake in commercializing AI models while privately acknowledging the “existential threat” those products pose to publishers’ underlying economics. 

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The case for and against retail media networks as brand-building channels

The original pitch of retail media networks was to find shoppers while they’re shopping and make the sale. Now that RMNs have accomplished that, they’re trying to convince advertisers (and more of their wallets) that they can build their brands on their respective channels.

The capabilities are there. For every retailer that isn’t Amazon — the woolly mammoth of retail media with its own tech stack, measurement capabilities and streaming channel — RMNs have juiced this offering with partnerships. Meaning, retailers that don’t have their own streaming platforms or tech stacks, they’ve inked partnerships to roll out those offerings. For example, Kroger’s partnership with Disney Advertising, Walmart’s partnerships with TikTok, Meta and Snap or Instacart’s partnerships with NBCUniversal.

“Retailers own far more than online ad placements. They own aisles, screens, apps, content and cultural moments,” Kim Mayo, executive director of retail media at Trade School told Digiday in an emailed statement.

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