Content licensing is publishers' fastest path to payment

The use of copyrighted material in the development of AI tools has become a hotly contested issue. Creators are understandably annoyed that their work has often been used without consent or compensation. With the regulatory landscape uncertain, publishers have largely been left to fend for themselves. This leaves them with two main options: Litigation or licensing. However, these are distinct strategies. Litigation is like a speculative investment whereas licensing is more like a bond. The former is risky but may produce a windfall in the long-term. The latter provides short-term certainty but the returns are likely to be less dramatic than the results of a courtroom victory. 

Getty v. Stability AI shows why copyright litigation moves too slowly for publishers

Getty Images’ long-running battle with Stability AI shows how challenging it can be for publishers to navigate these approaches. A lawsuit in the High Court of England and Wales (Getty Images v. Stability AI) initially saw Getty accuse Stability of primary and secondary copyright infringement as well as trademark infringement, though they ultimately dropped their primary infringement claims after they couldn’t prove that their images were stored or reproduced within the United Kingdom. 

In her ruling, Mrs. Justice Smith upheld Getty’s claim of trademark infringement but rejected their claims of secondary copyright infringement. However, this is not the final word on the matter. Smith recognized that the case raised novel points of law, so she granted Getty’s request for leave to appeal. This means the case will be taken to the Court of Appeal and perhaps even the UK Supreme Court. 

Getty is also suing Stability in the US as well. Although Stability sought to have the case dismissed, Judge Trina L. Thompson of the US District Court for the Northern District of California has allowed it to continue. And no matter who wins in the District Court, the matter will almost certainly be appealed.

The twists and turns of Getty’s legal battles against Stability highlight one of the major drawbacks to litigation: It can be incredibly slow. Getty may eventually prevail in court, but that victory is months or even years away.

Content licensing gives Getty revenue and attribution that litigation cannot

Faced with that frustrating reality, it should come as no surprise that Getty isn’t putting all of their eggs in the litigation basket. As they contend with Stability in the courtrooms of London and San Francisco, they are pursuing licensing agreements with OpenAI and Perplexity.

These deals share a common pattern. Getty will provide their catalog of images to the developers via an API integration. Both sides come out ahead. There are many instances where AI-generated imagery just won’t suffice. For example, journalism often requires photos of actual people and events. By striking a deal with Getty, OpenAI and Perplexity acquire a veritable treasure trove of such images. In return, Getty acquires a revenue stream along with the assurance that their material will be displayed with proper attribution. 

Of course, there are a lot of unknowns about these deals. It’s not clear how much money will end up in Getty’s coffers, and thorny questions about the use of Getty’s images to train future AI models and the extent to which Getty’s images can be modified by AI remain unanswered. But the market seems to think Getty is making the right call. After their licensing deal with OpenAI was announced, Getty’s stock price surged 145%.

Content licensing is becoming standard practice across publishers of all sizes 

Still, I think these deals represent a step in the right direction. Robust content licensing programs have the potential to transform uncertainty into opportunity. Not only can they provide publishers with compensation for their hard work, but the enhanced visibility that comes from proper attribution can help publishers expand their influence. These deals also have the potential to pay off faster than the glacial pace of litigation. 

Looking at the PressGazette’s coverage of the various deals being signed between publishers and AI companies, the direction of travel seems clear. Licensing has become increasingly common. And it’s not just media behemoths that are inking deals. Marketplaces like Dappier and Tollbit are helping to democratize licensing thereby making it accessible to publishers of all sizes. 

At the same time, AI platforms are increasingly seeing the benefit of these deals as well. In the long run, building your AI model around high-quality, well-provenanced content is the way to go. Not only will this lead to better, more responsive models, but it also incentivizes publishers to keep producing new content. 

And adopting an ethical approach to licensing allows platforms to stand out (in a good way!). When AI was just a curious, sci-fiesque novelty, the use of creators’ work in the development of these tools was rarely interrogated outside technorati circles. But the mainstreaming of AI means more and more people are asking questions about the ways in which AI developers benefit from the creative endeavors of others. Failing to read the room now may well come back and haunt you later on.

Litigation and licensing ultimately serve different purposes. Litigation is a speculative investment. It's expensive, the returns are uncertain, and the payoff may take years to materialize. But the potential upside is enormous: A favorable precedent from the Court of Appeal or a US district court wouldn't just benefit Getty–it could strengthen the negotiating position of every publisher that comes after. Licensing, by contrast, is a structured approach to the problem. The deals with OpenAI and Perplexity establish certain rules that reduce publishers’ uncertainty about the immediate future and generate a certain amount of revenue and attribution now while the appeals concerning unlicensed usage grind forward.

Smart publishers will take a holistic approach. They’ll pursue litigation when it’s worth the time and effort, but they won’t let that stop them from pursuing licensing deals in the meantime. And thanks to marketplaces like Dappier and Tollbit, that option is no longer reserved for companies with Getty's resources. The regulatory landscape may remain uncertain for years to come, but publishers don't have to wait for certainty to start getting paid.

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