Microsoft Introduces Payments to Publishers for Content Featured by Copilot

Microsoft is making strides in the AI space by announcing plans to pay publishers for content featured in its new feature, Copilot Daily. This is part of its Copilot AI-powered assistant, which integrates across multiple platforms. Copilot Daily, unveiled alongside several other updates, is designed to deliver a spoken summary of weather updates and current events, similar to the functionality already offered by AI assistants like Amazon's Alexa and Google Assistant. However, Microsoft claims that its version is more user-friendly and aimed at combating “information overload,” emphasizing a clean, simple, and easy-to-understand format.

Microsoft will only pull content from authorized sources for Copilot Daily, as outlined in the company's blog post. While the details of publisher agreements remain under wraps, Microsoft has already secured partnerships with major media outlets, including Reuters, Axel Springer, Hearst Magazines, USA Today Network, and The Financial Times. At launch, this feature will be available to users in the U.S. and U.K., with plans to expand to additional countries and include more publishers soon. Although Microsoft hasn't disclosed specific financial details, it’s clear that these deals represent a significant shift, as Microsoft’s content-licensing deals have historically been limited to platforms like MSN, rather than its AI products.

The move to compensate publishers for AI-generated content aligns with industry-wide trends. Several AI vendors, such as OpenAI, Perplexity, and Apple, have entered into similar payment agreements to avoid legal claims related to the use of copyrighted content. Microsoft itself is involved in a lawsuit accusing the company of using millions of articles from The New York Times to train its chatbots without proper compensation. Licensing content provides AI vendors with critical data for training, and according to some estimates, the market for AI training data is projected to reach $30 billion within the next decade.

Other AI firms are adopting revenue-sharing models as well. Perplexity, for example, has begun sharing ad revenue with publishers when its AI-powered search tool presents their articles in response to user queries. Similarly, OpenAI has inked content-licensing agreements with major publishers, including Condé Nast, Time, News Corp, Vox Media, and The Associated Press. Despite these partnerships, some critics argue that the financial terms undervalue the work of journalists and content creators. For instance, OpenAI’s annual payments to publishers reportedly range from $1 million to $5 million, with concerns over poor execution. As of mid-2023, OpenAI’s ChatGPT was providing broken links to news articles from some of its content partners.

The financial difficulties faced by the news industry add urgency to these debates. News organizations have been hit hard in recent years, and the job cuts in journalism are a stark reminder of the struggles to find sustainable business models in the digital age. According to Fast Company, 10,000 journalism jobs are expected to be cut by the end of this year, which, while an improvement from the 21,400 lost in 2023, still paints a bleak picture.

Various factors are contributing to this decline. Ad budgets have been slow to grow, while inflation has led to a reduction in paid subscriptions. The rise of AI-generated news summaries has also reduced traffic to news sites, with search algorithms and social media feeds further limiting access. Big Tech companies such as Google and Meta are often blamed for training consumers to expect free news content and capturing a growing share of ad revenue. As it stands, approximately 60% of global ad spending is directed toward these tech giants. One study found that broadcasters lose nearly $2 billion annually in ad revenue to Google and Meta’s platforms.

In light of these challenges, Microsoft’s decision to pay publishers for content featured in Copilot Daily could provide much-needed financial support to the struggling news sector. It’s also part of a broader shift in the tech industry, as AI developers seek to build relationships with content creators in a way that balances innovation with fair compensation. The success of Copilot Daily and similar features could be a turning point for how AI companies and publishers collaborate in the future.