News Corp expects ‘large chunk’ of Anthropic’s $2.2b copyrighted books settlement
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More news: News Corp CEO Robert Thompson said the company and its authors under subsidiary publisher Harper Collins will receive “a large chunk” of AI lab Anthropic’s USD1.5 billion ($2.2 billion) class action settlement after pirating books to train its models.
On Friday, Thompson told analysts on an earnings call that “we and our authors at Harper Collins naturally expect to receive our fair share of that payout starting later this calendar year”.
In September, Anthropic agreed to settle a class action lawsuit and pay USD3,000 for each of roughly 500,000 books covered in a settlement after an earlier court found that it had pirated millions of books.
He later stressed that “there is a fundamental misconception about the impact of AI on News Corporation”. He argued that AI is “retrospective and synthesises generic content” while News Corp has “contemporary, creative, proprietary content, which is only accessed if AI companies pay us” through its “woo or sue strategy”.
“We've been consciously building a moat, and it is a moat with saltwater crocodiles, with sharks, and even more dangerous species, lawyers. More importantly, the moat separates commodity content from our premium prescient IP,” Thomson said.
The company has already signed a multi-year deal with OpenAI that permits the use of content from News Corp editorial, business and real estate products. Thomson also said "negotiations are advanced for other AI deals".
News Corp also expanded its partnership with Bloomberg to include the right to use its Dow Jones content in AI.
When asked if the recent negative market reaction to the release of Claude Legal has shaken the business’ confidence regarding its investment in the Dow Jones Professional Information business, Thomson said “absolutely not”.
“We are fully confident in the Dow Jones Professional Information business for the reasons that I outlined in the previous answer. We're also very confident about the trajectory this quarter and next quarter.”
What they said: “It is worth remembering that AI models need data, otherwise they are just lines of inert code. They need real-time, real-world data, and that's what we produce every single minute of every single day,” Thomson said.
“Without compelling content, these AI operators are not omnipotent, they are not unique, they are eunuchs.”
News Corp tops estimates for Q2 revenue as earnings slide
The news: Media giant News Corp posted a 6% lift in second-quarter revenue, driven by growth across its Dow Jones, digital real estate and book publishing divisions.
Revenue for the second quarter came in at USD2.36 billion ($3.41 billion), higher than the USD2.29 billion market consensus expectation, according to Visible Alpha.
This was an improvement on the USD2.24 billion revenue in the prior year, and above the USD2.14 billion revenue generated in the first quarter.
However, net income from continuing operations dropped 21% to USD242 million in the second quarter, lower than the market consensus of USD247 million.
Earnings per share came in at 34 US cents, compared to 40 US cents in the prior year, and below the 35 US cents per share expected by the market.
The context: News Corp attributed the drop in net income to the USD87 million gain on REA Group's sale of PropertyGuru in the prior corresponding period.
The company said the primary driver for its revenue growth was higher circulation and subcription and advertising revenue at its Dow Jones segment, higher real estate revenue in its digital real estate business, and higher physical book sales in its book publishing division.
Dow Jones (+8%), book publishing (+6%) and Realtor.com operator Move (+10%) all grew revenue year on year.
What they said: "It is clear that expectations of AI's impact are continuing to evolve and that the more perceptive players have come to realize that provenance is paramount," said News Corp CEO Robert Thomson.
"What is the point of acquiring cutting-edge semiconductors if they are being deployed to repurpose gormless, factless, feckless content sets? We do believe an increasing number of insightful companies understand this content contradiction and will indeed pay a premium for our premium content."
The source: ASX
