Friday, August 4, 2023

Media Execs Suck At Negotiating With Tech Companies

From Tedium, August 2:

A Dylanesque Negotiating Strategy
One of the news industry’s biggest, longest-standing problems is that they do not value the work they create at the level it deserves. They should take a cue from the music industry’s biggest stars. 

I’m really struggling to wrap my head around how media executives score deals with large tech companies.

There has to be a science to it, right? But what I’ve seen from the recent deals OpenAI has made with the Associated Press and major newspaper publishers makes me think they just suck at negotiation.

The AP’s OpenAI deal does not list a price. A deal with a consortium of local newspapers calls their deal a $5 million investment. And the best that anyone seems to have gotten from any of these agreements, honestly, is AP getting OpenAI to pledge to pay them more if someone manages to negotiate better than they did. With a bar that low, maybe someone will cross it.

And what does OpenAI get in the agreement? Content—lots of it, in amounts and at levels of depth few other editorial resources can muster. Content is hard to produce consistently, at scale, for a long period, and the AP—by virtue of the fact that it is a wire service built around accurate information gathered in a consistent style over a period of many decades—has one of the strongest sources.

So why are they giving it up for, potentially, peanuts?

I can’t be sure exactly how these meetings go, but historically, based on what we’ve seen from the media industry in the past, they start like this:

1. There’s a shiny object that’s getting a lot of attention, and media executives, who aren’t necessarily technology savvy, haven’t considered a potential solution to this problem.

2. A meeting gets set up, usually between the executives of the buzzy new company and some of the top figures at the media empire.

3. The technologists inevitably wow the media execs, leading to a situation where the media companies concede a lot of ground because they presume they can’t miss out on this new opportunity....