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AI is the biggest technology shift of our lifetime. This show is about how to profit from it together.
Each week I talk with the founders and CEOs closest to AI and Content, the ones figuring this out in real time.
I’m also building an AI content business myself and share the lessons I learn along the way.
WHAT WE COVER
The Titans -- How companies like OpenAI, Anthropic, Google, Meta, and xAI are moving, and why their decisions matter.
The Incumbents -- How content giants like Disney, News Corp, Universal Music Group, and Reddit are responding to AI, and what it means for creators and publishers.
The Playbook -- Real lessons on AI business models, content strategy, creativity, IP licensing, distribution, and getting paid.
Family & Our Future -- Every episode ends with me asking my guest what AI means for our jobs, our families, and the next generation.
ABOUT YOUR HOST
Rob Kelly has interviewed Steve Jobs and Bill Gates, helped pioneer early web content licensing, and built multiple companies with more than $100 million in total sales. His work has appeared on CNBC, CNN, TIME, and Entrepreneur.
Thanks!
-Rob Kelly
Welcome to Media and the Machine. I'm Rob Kelly. This show is about AI and how to profit from it. I believe this is the biggest technology shift of our lifetime. I'm a three time founder and CEO of content driven businesses, and each week, I talk with the people on the inside of AI and content, the ones building this new world and learning what works firsthand.
Rob Kelly:I'm an optimist about AI, but I'm also a realist. So every show ends with me asking our guests what AI means for our jobs, our families, and our future. This week's episode's a little different because I'm the guest. I was honored to appear on the Media Copilot podcast hosted by Pete Paschall. Pete has spent more than two decades in tech and media, including senior roles at CoinDesk and Mashable.
Rob Kelly:Today, teaches folks in PR, journalism, and media how to keep up with AI. Pete and I covered a lot of ground. We get into the spreadsheet I keep, which tracks 99 AI licensing deals, what I've learned from them. I share when and why I think OpenAI will settle its lawsuit with The New York Times before its IPO, and how OpenAI can help grow the Times business. We dig into Yelp's content licensing deal with OpenAI, and a business model I call licensing content to commerce, where Yelp can turn an AI answer into revenue.
Rob Kelly:Pete gets my take on why I believe we are far from running out of content to train AI on. I will get into my own use of AI, including how I increased my writing productivity 8.7 x without being a spammer. Now please enjoy my conversation with Pete Paschel. For this time, he's the one asking all the questions.
Pete Pachal:Give me a little more background on your relationship with both journalism and sort of the business side of of media.
Rob Kelly:Yeah. Well, I grew up on Wall Street. My dad taught me to love business. He I was one of those nerdy little guys who, at 13, my dad dressed up in a Brooks Brothers suit and dragged me into the office as a kid, maybe 12, 13 years old. And he just taught me to love it like a game, kinda like folks like sports or, you know, I read the Wall Street Journal, like, I read the sports columns, and I love sports.
Rob Kelly:And dad told me I should write for the school newspaper, so I did. He rarely gave me advice, by the way, so I took it. And that was a lot of fun. And then I started writing about tech much like you, and I wrote for a company called CMP Media, one of the favorite companies I've ever run across in Manhasset, New York, Long Island. They had great customers.
Rob Kelly:So folks like Steve Jobs and Bill Gates would agree to sit down with me for interviews. Nice. And nothing to do with me. Just I had a few 100,000 people are gonna write them a check. You see and you still remember the thrill of a byline.
Rob Kelly:Right? Seeing your own name.
Pete Pachal:First time Yeah.
Rob Kelly:There's nothing print
Pete Pachal:when when it was print.
Rob Kelly:Nothing like it. Yeah. Nothing like it. And then I decided to I I found that was like spectating, and I wanted to get in the game more. So I started running the content licensing business for CMP Media, and they had 16 magazines, a million articles.
Rob Kelly:And my job, was the only one who did it, was to sell that feed to LexisNexis, Bloomberg, Dow Jones News Retrieval, and it was a great business, highly profitable. I'm sure we'll get into that later. And that got sort of my whetted my appetite for the business side of things. I then founded or CEOed three different startups. And my last startup in early two thousand eighteen, OnGig, I got lucky in that I had a smart cofounder, Kevin.
Rob Kelly:And we started using Google's AI back in 2018. This is, you know, four plus years before ChatGPT. We're using machine learning, natural language, incredible stuff at the time, by the way. Still is, in fact. And Google had us in twice to present to them.
Rob Kelly:I'm so humbled by that. But we were one of their only customers too, it's funny to have a big company like that, and OnGig was using their AI and paying them. So they had us in twice to talk to a fifty, hundred person team. Then I created this newsletter daily doc just for fun, and I started using ChatGPT because it launched around the same time. It a d x my productivity, so I was sold on AI.
Rob Kelly:And along came the New York Times suing OpenAI. I thought that was interesting. A few months later, The Wall Street Journal owner, News Corp, made a $250,000,000 deal with OpenAI. And I thought, you know, you love content like me and media. I thought that was just the most unusual thing to the top AI to to the top media companies in the world taking totally different strategies.
Rob Kelly:So I launched Media and the Machine as a newsletter and then a podcast, and we cover business. But at the end, also, I I ask all my guests questions about sort of the future of AI and humanity, our families, our jobs. And I consider it a moral duty to be like a little guide out there. So it's it's it's mostly business, but anyone's gonna find the ending interesting because we're talking about the future. And as you know, no one knows quite where this is leading.
Pete Pachal:Nice. That's great. And so, I guess, you know, I'd love to get right into it in terms of you mentioned those two big touch points in the AI content, you know, while licensing and and legal stories of of the past few years. They are very different in that in terms of the approach, but it's all orbiting around the same thing. Can you tell me a little bit about those two deal?
Pete Pachal:Like, basically and those are all sort of in a context of a couple years ago, but I guess I would wonder, like, how how did how what leads a media company to do one or the other? And then, you know, you tell me how that the approach to AI may have evolved over the last couple years since those deals were made or lawsuits were filed.
Rob Kelly:Yeah. I think I mean, The New York Times, you know, that happened, first at the end of two thousand twenty three. And it's really as I I'm staring at a spreadsheet, by the way, with 99 AI content licensing deals. I haven't figured out how to share this, by the way, in a way that isn't totally ripped off by AI companies AI companies and
Pete Pachal:something with a lot of bot blocking. No? They have cloud player call. They'll they'll they'll
Rob Kelly:Yeah. Exactly. So what's funny though is I started to log all these deals, you know, some went retroactively. So for instance, even though it was late two thousand twenty three that the New York Times sued OpenAI shortly after ChatGPT launched, they had New York Times had just done a deal with Google licensing their content around a $100,000,000 deal. It's not talked about a lot, around $30,000,000 a year.
Rob Kelly:And, you know, I I only use sources that are reputable, whether it's Reuters or the companies announcing deals themselves. These numbers aren't perfect, but The New York Times value their data, their content. And so when OpenAI came along, they they had their playbook. They were ready to protect that. They licensed their archives just like I used to do for CMP Media, and they get paid for it.
Rob Kelly:And along came OpenAI starting to use what The New York Times thought was their content, and so they were quick to sue.
Pete Pachal:And so the the $100,000,000 that you're right, it isn't isn't really talked about a lot is and, honestly, like, the Google sort of deals and quasi deals they've done have been a little different than the others in the space because they are so influential. But was that essentially to use the Times content in their AI products?
Rob Kelly:You know, I'm guessing here only and and speculating, but I think it was such early days that they didn't know, you know, exactly how things were gonna pan out, but they wanted to be paid. So they had a relationship with Google for years. Obviously, Google sent a lot of traffic, and they've worked out issues over the years. But I imagine that The New York Times quickly, you know, got got new terms in there if they didn't already at the start of the deal to account for for AI in some form and renegotiated things because they're the New York Times. They got some leverage.
Pete Pachal:And certainly, so did so did News Corp. So they had probably what was one of the most lucrative deals that I read about of the, you know, the it's all reporting, but apparently, it was something like 250,000,000 over five years or whatever it was. But it so so I found that interesting, and I think this is sort of speaks to one of the insights that you've written about recently, which is that training data was sort of a big feature of those big deals circa 2024, it feels like. And I the I've got a lot of questions about it. Like, the the one of the main ones is that, were was that essentially a protective type thing?
Pete Pachal:Because training data to me, it feels like it's kind of been it's already been done. Right? It's not like you can take the data out of the model once it's built. And so I I feel like it was sort of an after the fact licensing thing that sort of would would sort of come into this. And so you tell me, like, whether my interpretation is is sort of how this was treated at the time.
Pete Pachal:But I also feel like, as you've observed, that training data is no longer, like, the featured item in a lot of this stuff. And I'm kinda curious why. Like, do publishers feel like that ship has sailed or, like, especially considering some of the, court decisions since that have sort of seemed to steer at least a little bit towards the fair use idea. Give me the whole background on, like, training data and why how it was treated back then and and why, as you've observed, isn't it's not as featured prominently in deals in.
Rob Kelly:Yeah. And you're right. So back in 2024, the vast majority of deals announced included training, including News Corp, and you're right. Five year, $250,000,000 deal. And by the way, just to put that in perspective, I know this because I ran content licensing for CMP Media.
Rob Kelly:We generated they've long since been sold, so I could share these numbers. I think we're up to about 2,500,000 top line when I was licensing CMP's content. Million articles, fair amount, 2,500,000. But that's pure profit except for my salary.
Pete Pachal:We were
Rob Kelly:turning on a feed. Right? So these you know, it might not sound like as much $50,000,000 a year, but when it's pure profit, that could be bigger profit than the majority of News Corp's publications. So just a nice thing to keep in mind. This is not normal revenue.
Rob Kelly:This is gravy, highly profitable. It's a little different with AI, but the concept's still the same. And so you're right. It was mostly training. I I think it maps to how how LLMs also evolved.
Rob Kelly:In the beginning, they had to be trained. And then the second stage was you needed inference, as you well know. You know, basically understanding how to answer questions then. And then finally, you got into RAG. And sort of the deals have mapped that pretty well.
Rob Kelly:I still think training is hugely important, but what's happened is that inference and RAG have, you know, caught up and and been important as well. And training now is being used for different kinds of training. I'm sure we'll cover this, but I have strong opinions on the fact that we have not run out of content data to train on. Anyone who says we have is is, you know, mistaken in my opinion.
Pete Pachal:But what's left? What what what are you basing it on? Are you thinking about, like, multimedia or private data?
Rob Kelly:Yeah. The way I look at it is that the whole world increasingly is recorded. And so, you know and this one happening over the last twenty years or so as videos have become video, and video recorders are now on our phones and everywhere, CCTV and all that stuff. So, you know, I look at it as endless. Do you remember in the old days when Google used to come out with something and say, like, x percent of the queries on Google this year?
Rob Kelly:Something like 35% were new. You know? Yeah. And it always seemed really strange. Right?
Rob Kelly:You would think, like, the queries would be like the Knicks score. You know, I'm a Knicks fan. Or what's the news today? But there's so much new information that comes out every year. So I see that even more so with with AI and and training on content in that every day, we just are living new lives and we're doing new things.
Rob Kelly:More of it's being recorded, nearly a 100% in some cases. And so, you know, Madison Square Garden, you know, they they record the face of every person who walks in. Controversial. But picture that on steroids or, you know, over in China, that's done for just about everything. So and then you've got, of course, like, space, you know, data going on in space, data inside your body, biology, data underwater.
Rob Kelly:But even on land, the old fashioned stuff, content and data, there's still a tremendous amount of new data, and it'll be need all the time needed. And folks will still pay for training on that. It's just the percentage of deals with training as the emphasis is lowering to around 48%.
Pete Pachal:More like, do you pay for it because you don't wanna get sued? So that's why you're only gonna pay people who have the resources to sue you because you think that from a legal perspective, it's defensible. Right? You know, that probably might be the most defensible part of AI scraping. And if that's and that that kinda feels like maybe two things are a consequence to that.
Pete Pachal:One, the number of people you would who you would make that deal with, you were scared of suing you, there's sort of a a a there's a certain finite amount of them. And then, you know, the the the well, let let I'll let you go ahead and just answer if you think. Maybe I'm just too much of a cynic about these things, but tell me, like, what you think in terms of the and I know you're more on the media side, but, like, what is the AI company sort of attitude here and why has it shifted?
Rob Kelly:Well, I mean, I think you're right about the training part. You know, you can't put the toothpaste back in the tube as they say, and the models are well trained on what I would call the Internet corpus currently. Right? They grabbed all that. They grabbed it in many cases without either, a, telling folks they grabbed it or, b, sharing where they grabbed it, which is, I think, by the way, a huge issue that is gonna come up more and more that models are trained on data.
Rob Kelly:They're not being transparent about it, and that could lead to some pitfalls for AI companies, you know, when they're using someone else's data and a customer uses ChatGPT to create something. Mhmm. Like, at an enterprise level, like a new movie. Where's that where's that footage coming from? So that's, you know, that's my view.
Rob Kelly:But I think the New York Times is probably a good case to to talk about how, you know, if you're going to train on their content, they wanna be paid. If you're gonna answer questions, inference on their content, they're gonna wanna be paid. And if you're gonna show up today's news stories on your, you know, on your LLM, they're gonna wanna get paid. And I've got some strong opinions on also how they're gonna wanna get paid. I think it's gonna change here coming up with New York Times and Reddit.
Pete Pachal:Yeah. Well, tell me about that. Like, I do feel like you're a 100% right. Like, inference and surfacing current news. I guess, you know, you you actually said a few different kind of categories there.
Pete Pachal:So so the go a little deeper on what each of those means and then what the, well, what the compensation should be like. Right? Because it's like there's a lot of different models on, like, paper crawl, paper use, which are similar, but obviously different in terms of when you get paid. But then there's other stuff that is associated with inference, like, for example, you know, branded call. We don't have to go down through all the business models.
Rob Kelly:Mhmm.
Pete Pachal:But, generally, with these deals in particular, are they favoring one type over the other? And then for all of those, it feels like there's attribution is a key part of it. So how how is have has a standard emerged in terms of how that's being tracked?
Rob Kelly:Well, you had a great interview with Jonathan Hunt, I believe, his name over at HubSpot. Did I did I get their name right? And he he he sort of articulated it well in my opinion, which is I I I'm paraphrasing, but he basically said we don't really care how much you scrape our content, and they've got media businesses as you focused on in in the interview. And all they care about is the business model they have on the back end to support it. So my belief is any content driven company or media company just has to have a back end business model to support this.
Rob Kelly:So let me give you an example for the most recent content licensing deal announced. A big one is Yelp. And Yelp's content local data is being this is with OpenAI. Yelp and OpenAI did a content licensing deal, and OpenAI gets to use all of Yelp's local data and and put it up there. It did not mention whether it's used for training or not.
Rob Kelly:But in Yelp's case, what they're getting is very interesting. One thing they're getting is a request for a quote. You know how you can be a service provider like a plumber on Yelp? And if you go on Yelp and look for a plumber, it says request quote. Well so that's a very interesting new model, which is like a content to commerce, you know, but it's a licensing content to commerce model.
Rob Kelly:And in a way, Yelp doesn't really care that much on on how much content they give up if they can get revenue from that request to quote. And I think the New York Times is gonna do something similar. I think when they settle and do their licensing deal with OpenAI, I think you're going to see it focused on generating traffic to their commerce, including subscriptions to New York Times, subscriptions to all their digital stuff. You know, you can buy it any way you want, their games and their recipes and so forth. So I think you're gonna see more of that.
Rob Kelly:In that case, they don't really care as much about being scraped if they're getting the revenue on a usage base.
Pete Pachal:So let me let me get let me see if I'm hearing this correctly. So it'd be like, instead of just getting, like, your information is contributed to this answer and here's a citation, they would also get oh, and by the way, you can subscribe right here in the in the UI. There's, like, it's like a subscription button. Is that kind of the idea? And then Absolutely.
Pete Pachal:Right.
Rob Kelly:Yeah. It's kind of similar to affiliate ads and affiliate marketing in a strange way. There's no better phrase. Although I'm starting to call it licensing content to commerce. Content to commerce is a, you know, known concept.
Rob Kelly:So back to HubSpot, they're happy, you know, Jonathan's happy to get a whole, you know, crapload of subscribers coming in from OpenAI because that supports their business. And I think the New York Times and Reddit is another example. One of the reasons they haven't closed their renewal with, with Google, for instance, which is is coming up here, is reportedly just that they're holding out for more value of people clicking through to Reddit. They wanna be the brand. That's the other theme here.
Rob Kelly:If you could be the brand, New York Times, you know, Reddit, you're in good shape. It's a lot harder when you're not the brand, of course, a known brand.
Pete Pachal:Yeah. Exactly. I know even USA Today is sort of musing in the same way that Reddit was a couple years ago about, oh, maybe we'll even nuke ourselves off Google entirely. I know the crawler situation is slightly different than it was before, but that just sort of seems like there there's a very few brands that could actually, like, do that that have the kind of leverage, you know, and it is probably the, you know, those three, the the the ones we've been talking about. Do you put any stock in any of those kind of threats?
Pete Pachal:I mean, I guess it's we're not quite at Google zero yet. We probably never will be at zero. But do you think those kind of threats will ever, be real? Like, people would wouldn't mind or not wouldn't mind, but, like, if that the stakes of getting removed from Google would be less than, you know, whatever whatever deal you think you're not getting.
Rob Kelly:Yeah. I mean, I think it's gonna shift, but I I also look at it as, like, two scenarios. We're talking about large publications. But if you and I were to form a start up tomorrow and suddenly we we let's say we weren't getting any traffic from Google, but we're getting traffic from ChatGPT and Gemini and Claude, you know, we'd be thrilled. Right?
Rob Kelly:So picture some 20 launching a new business and all this free traffic's coming on board. So I think it helps to take a beginner's mind to this world. The Google traffic, obviously, is going down for just about everyone I've talked to, and I know you've talked about this at great length. But taking a beginner's mind and looking for what value can you get out of AI and what's your back end to just run a good business regardless of where the traffic comes from.
Pete Pachal:Yeah.
Rob Kelly:But I will I do think it's gonna come from AI. That will get ironed out in the courts. I don't see something where yeah. You remember when ChatGPT launched how there was there were no links. There were no citations.
Rob Kelly:It was just pure answers. By the way, it was pretty pretty great, but not not fair. Right? And over time now
Pete Pachal:Once they got links, they half of them were made up.
Rob Kelly:Okay. Yeah. And, you know, over time, it's evolved to look more like sort of perplexity did out of the gate, is, you know, links and attribution. And I think all that will get ironed out, and there'll be value coming from AI. And the good media companies with a back end business model will prosper and but others are definitely gonna go out of business.
Pete Pachal:Yeah. And it's all like you say, it's all happening in the AI answer, and there's so much focus on that. Your your mention of the subscription button possible in sort of an AI answer is interesting. I I definitely am hearing and and there's stuff happening that is suggesting that that real estate is now getting sort of rethought and and renegotiated. Right?
Pete Pachal:So there's the story from the other week about how time is now putting essentially, trying to build ads for bots into their site, which is a very interesting approach I find just from a fundamental aspect because it shifts the expectation of revenue away from bots and AI companies and to the advertiser. So the advertiser then essentially buys an ad specifically for the bots that gets scraped and passed along into the answer, which is, you know, like, obviously, invites a host of questions, we'll see how this whole thing plays out as if it just actually becomes some kind of sustainable or or even any kind of revenue. But I'm I'm also, like I see I see these things as a user too, and I'm like, oh, the not that AI answers are clean, but relative to what a search engine results page looks like, they're relatively clean today. And I feel like, oh, that's over the coming years is going to be renegotiated, and you we I even see it now with the now the ChatGPT is advertising in the answers. They're also linking out the brands more from the answers themselves.
Pete Pachal:So there's all these sort of things that are factoring into the user experience as the the the answer is sort of getting reshaped. I think I guess my question is, like, how how quickly do you see the AI answer becoming something more akin to the SERP result with a lot of different things with different labels? And what are the chances that the the publisher actually ends up getting a better deal than they got with Google?
Rob Kelly:Yeah. I don't know how it'll net out in terms of versus Google in the end, but I I will say that I I believe that AI is going to increase the amount of queries and requests in the world because we're gonna have these agents you're talking about. And you and I might, you know, say, I don't know how many agents you have, but I have the equivalent of, you know, I don't know, five or 10. And and I think it's gonna be the people really progressive right now that I'm talking to are well in excess of that. And so you and I were talking about microphones, podcast microphones before we got on.
Rob Kelly:And if, you know, if you wanted to get an upgrade to your microphone and, you know, in the future, you ask an agent to go look out for one, it's gonna go out and look at content sites. It's gonna run into an ad as you pointed out, and that will influence the agent. The agent's gonna need new current info, and someone will get paid for it. And I think it won't be purely ChatGPT and and the bunch. It'll be the content and ad providers in that case.
Pete Pachal:Yeah. Yeah. Exactly. And I think the idea of I mean, it's already a a science and a growing science on sort of how do you influence these answers. And, you know, publishers have an interest in that too because they're competing in the information space.
Pete Pachal:Of course, they're also because their product is information, there's often the sort of existential question attached, and then they just end up blocking. So so let's talk about blocking for a minute. In terms of, like, for for particularly for publishers, we've talked a lot about sort of the big publishers and the big players. But, you know, most folks and certainly most of my listeners are sort of in the mid to small tier range. And, for for them, there's always the, well, I can't get OpenAI on the phone, so I might as well just block.
Pete Pachal:You know? And this obviously applies to sort of everybody, which as to your point, the future is AI. You know? If you're blocking, you're not going to be where information is now transacted. So I'm oversimplifying here a bit, but, like, I wanna hear your take on, like, what is a balanced approach here that helps preserve your authority, but also doesn't just, like, give away the store by just opening crawlers up to everything.
Rob Kelly:Yeah. And I think this is where the the squeeze sort of is. The the large companies have the leverage of a a legal team. So, obviously, The New York Times and and others can big big publishers and media companies have that leverage, you know, to to fight OpenAI and and the bunch. And the the small companies, as we talked about taking a beginner's mind, you might just not care.
Rob Kelly:You just wanna be discovered. Right? You want your content and back end products, Hopefully, you have them to to be found everywhere. I think it's that middle the the mid sized companies that are feeling the biggest squeeze, and these are the ones that I know you had Bill Gross on from pro rata and Tolbit and some others are trying to serve that world. And that's the one where I I believe the New York Times case is really gonna have an impact because I think they care about the money, but I also what I'm hearing from their camp is they care about the principal.
Rob Kelly:Like, they actually really care about that, and I think they're gonna show show their leadership in this space by setting some something of a playbook is is my hopes. And I think Reddit's, by the way, doing something similar even though they're kind of a different than a legacy media company, although they've been around now twenty years or something, haven't they? So those mid level companies, and that has not been figured out. I mean, pro rata is I I I think Bill admitted on or shared on your he wouldn't hide this. But a AI has not paid, as far as I know, a single one of Pro rata's publishers.
Rob Kelly:And so they, you know, they got some things to figure out there, and it's not Pro rata's fault. I mean, it's just it hasn't worked itself out. But there are some interesting new protocols coming up as you well know. I find the RSL, really simple licensing protocol. That one is one to watch because they have about 40% of the Internet's content companies behind them.
Rob Kelly:So that'd be a collective so that they can go to OpenAI and say, we represent Reddit, which they do, and they represent PeopleLink and a bunch of others. And it's time to sit at the table. And the good news about them is they they don't just care about the they they represent the big companies, Reddit and PeopleLink and so forth, but anyone can sign up. You and I can sign up for our podcasts, and we can write into the code that, hey. We wanna get paid if you scrape our content, or we only want traffic.
Rob Kelly:We don't wanna get paid, and you actually write a contract within the code. I think you're gonna see some protocols like that become standard.
Pete Pachal:Yeah. It definitely does feel like slowly but surely the media side of things is figuring out collective action even though it is not sort of inherent to their DNA. You mentioned RSL. There's spur that started in The UK that's trying to sort of figure out at the very least, like, what the plumbing should look like and how to correctly attribute things. And, there's just there's just a lot of, lot of collective activity that didn't exist a couple years ago.
Pete Pachal:It took them long enough.
Rob Kelly:And by the way, just in a strange twist, we've always been so far ahead, The US, ahead of, The UK and the rest of the world in tech. Things have really tightened up in terms of AI. And there are some ways in which, the EU and some of their new laws and spur and so forth might take off fast over there, and we might actually follow suit because we see a new model. Just might be an interesting twist to look at.
Pete Pachal:Yeah. And there's also the I I know I'm interested in seeing how Google ends up allowing folks to sort of split off their AI overviews because right now, I believe that's the you can you can opt out of Gemini through Google extended, but you can't opt out of overviews. And I feel like it's funny. Like, Google, like, claims like, a lot of folks claim, like, we're never gonna put ads in our AI experience or our chatbot in the way OpenAI does, but yet they have all these AI experiences throughout the rest of their product that is ad supported anyway. Just find that a bit of an irony.
Rob Kelly:By the way, how cool would it be if Google took their page out of the YouTube creator monetization model, which they pay 55%. You probably know. You you've got YouTube channel. 55% of the ad revenue over to the creators. Huge opportunity for Google to do this with all creators.
Rob Kelly:They've already got the model. They've got the tech. And I could also see Apple doing something like this. They did it with iTunes, and they took Napster in a legal sort of marketplace of music content. And they turned it into something more like HBO Max or, you know, just a subscription model.
Rob Kelly:And I think there's some opportunities for some companies to make some big moves. And the AI companies are are not doing so well in terms of, you know, sort of favorability out there. And, you know, they might face some challenges here. Some some friends of mine are saying, you know, the pitchforks might be coming for for the AI models and their CEOs with folks being so upset about what they're doing, young folks especially. Are aren't you hearing this from young younger folks in your life?
Rob Kelly:I mean, anyone under 18 or 20. I would say for me, it's only a it's about two out of three or maybe even three out of four totally down on AI. I'm an AI optimist, so it's hard for me to hear that, but young folks can make some noise.
Pete Pachal:Yeah. There's a 100% of backlash through for a a bunch of reasons. And the two main ones that I feel like are most influential are the teachers are mostly still still skeptical of it, and the message, like, is cheating goes out to most kids in k 12 and to a large extent folks in college. Some some folks are AI forward and are sort of more acknowledging that this is the future and sort of teaching kids how to how to use it, but that's that's rarer. And the other part is sort of all the stuff going on in society now with regard to just activism and whether it's anti data center, anti AI, or just sort of this general, like, unrest that's kind of almost class warfare, which involves, like, suspicion of big tech and etcetera.
Pete Pachal:There's all this kind of stuff that circulating around that, and I think that has an outsized influence on on the younger generation. So And their jobs.
Rob Kelly:Yeah. Yeah.
Pete Pachal:We got the jobs. Well, this is the other thing. Again, I don't wanna get this into too general AI commentary, but the whole idea that the AI marketing is always about doom and gloom, which is kind of you know, it's come back around and, you know, there is there's very little marketing of AI like, hey. This is going to do great things for you. But I also know you and I as I guess I think of myself as an optimist too.
Pete Pachal:You know, we're seeing great results just in our personal work. Like, you've said, you'd it you've kind of eight x your productivity, which I'd actually like to to double click on there a bit because that's interestingly precise. You and I'm glad you didn't say 10 x because that's it feels like
Rob Kelly:you No. I could tell you. Was 8.7 x. It because I measured it in a spreadsheet. I measured in a spreadsheet with Daily Doc as I was writing.
Rob Kelly:It was purely word count. I I can't spam. It's not in me. So I write the same quality content, and I measured my word count from blogs pre daily doc that I did for my SaaS company versus daily doc. And I just looked at word count, and it was 8.6 x the volume in the same periods of time.
Rob Kelly:So it meant I could do it I could do more, whatever you wanna measure it. But it was that that's what got me sold on AI. I was like, wow. That's my own personal thing, and I'm I'm not that good. There's others who are doing it a 100 x.
Pete Pachal:Yeah. I I certainly would make more I've made more liberal use of AI as time's gone on. But this year with the rise of coworking apps and agents, it's it's really night and day. Like, I started getting into I get something I it's been difficult to measure other than I've been able to do things I could never have done on my own, which is to say, like, a lot of the coding and maintenance of software and and sites and that sort of thing but that you need a whole team to do. Well, now I do have a team.
Pete Pachal:It's just bots and agents that that run it for me, which is great. So as we're wrapping up here, I wanna just get your, honestly, your your view of the future and, you know, speaking specifically about licensing business models, the future for publishers and media. Like, what do you see? And I I I wouldn't mind if you sort of game this out in sort of a variation of my final question, which is like, what how do you game that out where it's it's the media loses, and how do you game it out where media wins? And you can define those terms however you like, but I feel like most people in media feel like we're on the losing path.
Pete Pachal:Give us some some thoughts on, like, where my why that might not be the case, but what would happen if if for both of those sort of endpoints.
Rob Kelly:Yeah. I think well, I'll take the argument for and I love that. I love Peter Thiel's contrarian philosophy, by the way. Like him or hate him or somewhere in between. He always takes the other side, and I think that's a useful exercise for us as humans, not beyond just AI talk, humanity.
Rob Kelly:So making the case that media could really take a big hit would be that AI companies win most cases, including the fair use, and they argue they it's transformative, so they can train on any data content they want. And we're just slow to regulate things like compensation for any media company for using any content. I think the mid the middle folks, mid tier companies, media companies, content driven companies, a lot of them could take a big hit. And if they don't have good business models, you know, a lot are gonna lose sorta like the small mom and pops back in the Amazon days. Okay.
Rob Kelly:But I I would call it, like, the medium sized mom and pops, not not just small creators because they can do quite well. Mhmm. So I think it's gonna be a really tough time. So it but also, I'm I'm a little bit of a, you know, Darwinian sort of thinker about this, which is there are a lot of companies that weren't healthy enough that, you know, all good things come to an end. That that's gonna happen.
Rob Kelly:That's us evolving and getting better. So I believe that. On the flip side, I think the media companies have enormous cloud and leverage. So for instance, I believe that OpenAI will settle with The New York Times. They're gonna wanna settle before their IPO.
Rob Kelly:They're gonna wanna beat Sam's gonna wanna beat Dario at Anthropic in any way he can, And I think OpenAI will close a deal with The New York Times, and it'll be transformative to the industry. And then they'll have a blockbuster IPO. And there's plenty of money to share. You know? And maybe I
Pete Pachal:was thinking that's gonna be a big check, especially if if the New York Times, as you say, is really trying to stand on principle here, but everybody has a price.
Rob Kelly:And, you know, some of the some of the thinkers here, including Sam Altman at OpenAI, have talked about this idea of sharing, all the wealth, not just universal basic income. But there's a new thing called you know, it's, I forget the name for it, but it's like sharing just the capital, sharing the market value of these AI companies. It's possible we see some bailouts and things might change, and it's just a value distribution. So as well as OpenAI and Anthropic all do, maybe that money gets flowed back into our pockets, whether it's a company or an individual. So I again, I suffer from optimism bias.
Rob Kelly:I think things will work out in humanity because we're just amazing, you know, species, but they're gonna change. That's for sure.
Pete Pachal:Nice. Good stuff, Rob. I'll leave it there. Thanks for dropping by, sharing your thoughts and all your, analysis on all the licensing stuff that's happened in AI in the last few years.
Rob Kelly:Hey, Pete. Keep up the awesome work.
Pete Pachal:Appreciate it, man.
Rob Kelly:Well, this is Media and the Machine. A few things about you and me. If you wanna hear about the next new episode, make sure you hit follow on the show on your podcast app. And if you like something about this episode, the guest, the topic, even one part of the conversation, leave me a rating or review and tell me. That helps me know what you want more of so I can make the show better for you.
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