Amazon’s deal to license a broad range of New York Times content comes with a meaty payday for the publisher: $20 million to $25 million a year, according to people familiar with the matter.
The financial terms of the multiyear deal, which haven’t previously been disclosed, offer a window into how publishers and artificial-intelligence companies are valuing news content in the midst of a seismic change in how consumers seek information online. The annual payment amounts to nearly 1% of the Times’s total 2024 revenue.
FILE – In this Tuesday, May 30, 2017, file photo, the Amazon logo is displayed at the Nasdaq MarketSite, in New York’s Times Square. Amazon announced Thursday, Sept. 7, that it has opened the search for a second headquarters, promising to spend more than $5 billion on the opening. (AP Photo/Richard Drew, File)
The companies announced their deal in May and said it gives Amazon access to content from the Times’s news and cooking products, along with its sports property, the Athletic. Amazon can use the material to train AI models and feature summaries and short excerpts of Times content in its products and services, including Alexa.
It was the first AI-related licensing pact for the Times and Amazon’s first such agreement with a publisher.
The rising popularity of AI chatbots is upending traditional search traffic and associated ad revenue from publishers’ website visits. Tech companies have used articles to train their AI models, and pull from news sites to provide users with real-time answers to prompts about current events.
OpenAI has agreements with several publishers, including a deal with Wall Street Journal parent News Corp. That deal, signed last year, could be worth more than $250 million over five years, the Journal previously reported. OpenAI also has a three-year pact with Business Insider and Politico owner Axel Springer worth at least $25 million to $30 million.
The structure of such deals varies widely depending on the products and services the AI companies offer and how they wish to use the content—for example to train their models, deliver chatbot answers quickly or integrate news into emerging products. The Times deal consists of cash payments, according to people familiar with the matter. Other licensing deals may include different financial terms.
The Times is currently suing OpenAI and Microsoft for copyright infringement. Two News Corp subsidiaries are suing AI-powered search engine Perplexity.
The Amazon deal “is consistent with our long-held principle that high-quality journalism is worth paying for,” Times Chief Executive Meredith Kopit Levien said in a note to staff when the arrangement was announced in May.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
