Background
A global publishing company with content spanning newspapers, magazines and digital media was looking to learn about the training dynamics and monetization of large language models (LLMs) and generative artificial intelligence (Gen AI), in particular the monetization opportunity the tools presented. Publisher content is a large source of data for LLM training, creating significant value for technology companies that own and operate LLMs. However, publishers are not currently compensated the use of their content by LLMs. To monetize this use of publisher data, publishers must determine the value their content provides in the training of LLM models, the value that the industry can receive in return and a practical payment collections system that can be implemented quickly.
The client sought the assistance of L.E.K. Consulting to determine the monetization opportunity of AI in publishing due to our extensive experience in digital publishing and content licensing/distribution.
Approach
To identify the size of the potential monetization opportunity, our team started by providing an overview of LLMs and an analysis of their training dynamics, including the number of existing LLMs, the main datasets used for training LLMs and the volume of data — especially publisher data — that LLMs train on per year. Our analysis projected significant growth in revenue opportunities, driven by trends in Gen AI usage and business models.
After quantifying the opportunity, we evaluated various monetization schemes by drawing analogies from industries such as social media, music and publishing. For each scheme, our team assessed potential risks and considerations from how the Gen AI companies were generating revenue, how dependence on publisher (and other) content was likely to shift, and applicable usage terms from duration to attribution.
Our assessment identified several key AI monetization business models for our client, calculating potential valuation ranges and highlighting important considerations such as training, how substitutable it is, editorial standards, B2B or B2C use cases.
Results
Our work equipped the client with a detailed understanding of LLM training datasets and a fact-based valuation illustrating the significance of the publishing content to LLMs and their Gen AI tools. This analysis established a new foundation for an industrywide compensation structure. We delivered a comprehensive data monetization strategy for capturing new revenue streams from Gen AI companies and safeguarding the value of the publisher’s content. This strategic approach provided our client with provided visibility and equipped them with the tools to navigate an asymmetric conversation. Our insights provided the client with actionable strategies and clear next steps, positioning the company to capitalize on growing monetization opportunities within the AI landscape.
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