Close-up of Google app including search bar and link to AI Mode. Picture: Shutterstock/Nwz
Last week Google announced a raft of deals with national news organisations , under the banner of a new pilot AI partnership programme.
Details on these agreements remain secret but the scheme appears to be a facsimile of its Showcase framework.
This means largely superficial commercial agreements built around either peripheral or non-products but with the real intention – and the real value exchange – centred on securing ongoing access to content for Google ’s core products (in this case AI use) and heading off potential legal and regulatory challenges.
Regulators and the media industry should demand better.
Google AI products ‘profoundly harmful’ to content creators
With the deployment of AI Overviews, Google has been taking the content that media businesses have no choice but to give it – in order to maintain their prominence in the dominant search platform – and creating directly substitutional outputs that erode publisher engagement and monetisation.
AI Overviews are profoundly harmful to content creators, suppressing clickthrough rates from search by 35-50%, depending upon which study you read.
With AI Mode, which is being aggressively marketed in order to address the competitive threat from OpenAI, Google has been taking this further. Only 5% of searches placed in that interface result in the consumer clicking off to a destination website.
The effect of this is that almost all of the economic value created by the journalism used in AI Mode is captured by Google, rather than the publishers that fund the production of this content.
For obvious reasons, this use of publisher content is facing regulatory scrutiny in multiple jurisdictions. In the UK, under the new Digital Markets Unit regime, the Competition and Markets Authority has made the decision to designate Google as having ‘strategic market status’ for search and is in the process of setting new rules that will govern how it operates this business.
Similarly, in the US, Penske Media (publisher of Rolling Stone) is suing Google for the same conduct , and in the EU the European Commission has opened an investigation into AI Overviews following a complaint by the Independent Publishers Alliance.
In the years I’ve been working in and around platform strategy and policy I’ve learnt that one should always be extremely cautious in pre-empting the outcome of regulatory enforcement. It is slow, there are multiple opportunities to appeal and remedies often fall short of those that appear best-suited to deliver the desired market outcome.
However, so blatant and harmful is the abuse of dominance in the case of Google’s current treatment of publisher material, that it is hard to imagine any result other than substantial changes to its content access environment.
This is likely to mean that – inevitably after a long and protracted fight – Google will be forced to give publishers granular controls to determine how their intellectual property is used across search, AI and Google Discover.
Google’s two options: A genuine marketplace, or the Showcase playbook
The deals announced last week, under this pilot programme, appear to signal Google preparing the ground for this future.
At a basic, simplistic level, Google has two options for its approach to securing access to content should these changes come to pass. One would be to create a genuine marketplace for content in which all journalism businesses could partake.
This would mean real licensing deals that pay publishers – on usage – for content when it is summarised within AI Overviews, AI Mode and Gemini.
In this world, publishers could optimise for these platforms, get paid for the value they deliver and make choices about the circumstances under which they are prepared to license their content for off-platform consumption, according to their own commercial strategy.
They could set prices and balance the trade-offs between engagement on owned-and-operated properties and new licensing revenues.
The alternative is to repeat the Showcase playbook. That is, create window-dressing commercial partnerships for products that deliver little-to-no value on either side, with contractual terms that ensure content access is maintained for Google where it matters; today that means search (including AI search features) and AI.
Stage two is to pick off the largest players in order to establish the market norms, before expanding the programme to the extent it is required by their content needs. Smaller publishers are likely to be left in the cold.
News industry needs to fight for fair pay for content in AI interfaces
The deals announced strongly suggest that Google’s preferred route continues to be the second one. Notably, its blog describes paying “for extended display rights and content delivery methods like APIs” not for the use of content in AI.
Perhaps there is some genuine innovation here – something entirely absent with Showcase, which remains a hidden product, serving no meaningful user purpose whatsoever – but these AI deals certainly do not sound like authentic licensing agreements.
As an industry, we should fight against these Showcase-style partnerships as the norm in the AI era. The alternative is to risk entrenching a model in which journalism businesses receive an arbitrary and flat fee for our content whilst Google extracts and retains value as AI expands in deployment and adoption.
We need to fight to draw a line around AI Mode, AI Overviews and Gemini and demand to be paid properly for content each time it is used on these interfaces.
We also need to see these contracts for what they are; an attempt to lock in content access on Google’s terms before regulators force the company to do anything more meaningful.
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