Financial Times chief executive John Ridding has told other news publishers they “have leverage and should insist on payment” from AI companies.
His words for the industry at the WAN-IFRA World News Media Congress in Copenhagen came one month after the Financial Times became the first UK news publisher to announce a licensing deal with OpenAI.
Ridding said on Tuesday of the deal that the FT had wanted to be an “early mover” but also to understand the potential use cases and impact of AI and to broaden its overall reach.
Giving a keynote speech, Ridding said: “The payment matters, for principle and for revenue of course, but also important is the opportunity to extend our reach and to understand how users will interact with AI.
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“As with the digital and mobile revolutions, pulling up the drawbridge or trying to hold back the tide is not going to be a strategy for success.”
Ridding said now is a genuine “defining moment” for the news media but that the opportunities from AI are as big as the risks, pointing to potential improvements in the reader revenue model such as through better personalisation.
He also cited the FT’s award-winning investigation into German fintech company Wirecard, saying it would have been easier with AI tools to help sift through the “mountains of documents” involved.
Meanwhile the FT has launched an AI-powered Q&A tool providing “smart briefings for corporate customers” and it has begun translating its digital edition into 25 languages using Google Translate describing this as a “powerful driver” for the FT’s “global ambitions”.
But he said this “means little” if publishers are “cut out of the loop between readers and information, and therefore revenues”.
He warned that disintermediation and the separation of publishers from their readers was the “biggest threat” to the news industry right now but that this is why the FT is “doubling down” on its high-quality reporting and investigations.
Ridding said publishers like the FT with trusted, accurate human-made journalism could be in a strong position because “for all the hype, AI makes a lot of mistakes and falls short when facts are formed.
“And the key point is that it is likely to fall further short without engaging trusted sources for training and, crucially, for grounding and validating queries.”
‘Not as if big tech doesn’t have enough money’
Ridding cited DMG Media editor emeritus Peter Wright‘s recent warning at the House of Lords future of news inquiry. Wright said generative AI “is the dog that eats its own tail. If it develops in the way it looks as though AI developers want it to develop – where they basically just appropriate all our work without any compensation at all – they will destroy the very news content on which their models are trained.”
Ridding said: “So what does this mean? In simple terms, it means news organisations have leverage and should insist on payment. And it means it’s rational and self-interested for AI platforms to pay.”
He said “it’s not as if there isn’t enough” money, saying the big five tech platforms, themselves just a “subset of AI players”, made $80bn in profit in the first quarter of 2024, up 30% on 2023.
This compares, he said, to somewhere between $3bn and $6bn for the world’s news media per year (rather than per quarter) – an estimate he prepared using ChatGPT itself.
“So surely it’s smart, as well as right, to invest some of those funds into the journalism that will improve their services,” Ridding said.
Ridding suggested a potential model that could work between platforms and publishers: “The ultimate goal could be a systematic alignment of usage, and revenues. Imagine if publishers had the data which showed how their material had contributed to answering requests. A basis for a systematic flow of revenue to news media would be established. The incentives for reliable and original reporting would be increased. A vicious cycle of information degradation could be reversed.
“This isn’t just a daydream, entrepreneurs and engineers are working on such a systemic solution. And I wish them luck.
“For regulators and policymakers, this could be just the kind of consumer-oriented market-based solution that has been absent in tech-media tensions of recent years, aligning platforms and publishers with an incentive for producing reliable news.
“But regulators and policymakers can’t just sit back and wait for the pieces to fall into place. Right now they need to step up and protect intellectual property. They should require that publishers are paid when their journalism is used for training and grounding.”
Publishers ‘can have a happy ending’
Ridding also told the room of global news chief executives and senior leaders that taking a short-term view right now is “not a recipe for success or survival”.
He said the “biggest challenge is to plan and invest through the cycle. The major changes that we are all facing can’t be conquered on a quarterly rhythm. It’s hard to take a long term view when the floors and the walls are all moving at the same time.”
He acknowledged that the FT is “fortunate” to be owned by Nikkei, a Japanese private company, which focuses on “mission maximisation over profit maximisation and supports a long-term view”.
Ridding later added: “To conclude, I’m not naive enough to suggest that a new deal between platforms and publishers which provides systematic payments for training and grounding solves all the problems in the information ecosystem.
“The scourge of deepfakes [and] social media‘s optimisation for attention are different and deep-rooted problems. And whack-a-mole policing by the platforms is nowhere near sufficient to hold back the toxic tide…
“But I am suggesting the potential alignment of news media and tech on the use of and payment for original reliable journalism with effective links to that journalism will keep quality news media on the stage with its vital role,” adding that this is necessary “for avoiding a cycle of decline and a plague on all our houses: publishers, platforms, politics and people.
“This long-running drama in news media can have a better ending, even a happy ending, if the main actors play their parts right and play them right now.”
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