Major UK media publishers, including DMG Media, the Guardian Media Group, and Sky News, signed on to support revenue-sharing AI startup Prorata.ai on Monday. The move signals growing support for the US-based upstart, which aims to create a fairer and more transparent system for compensating and crediting creators and publishers in the age of generative AI.
Reach PLC, Mediahuis and Mumsnet number among the startup’s new supporters in the UK and Ireland announced on Monday. They add to the US firm’s existing partnerships with The Atlantic, Universal Music Group, and Axel Springer, as well as a number of authors.
DMG Media, which owns the Daily Mail, said it has “made a significant investment” and taken an equity stake in the California startup as part of the deal. It is the company’s first commercial partnership with a generative AI platform. DMG Media vice chairman Rich Caccappolo said the deal also marks the first time a UK news publisher has taken an equity stake in Prorata.
The deal forms part of a funding round valuing Prorata at around $130 million, the Financial Times reported. Founded in January, the California firm has yet to launch a public-facing product.
Rethinking Compensation in the Age of Generative AI
In return, the partnership will give Prorata access to DMG Media’s content for its AI-powered search engine, which is slated to launch later this year. This includes material from the Daily Mail, Mail Online, New Scientist, the i and Metro.
Guardian Media Group and Sky News are also reportedly making content available to the startup.
Tech giants and AI startups scraping content from publishers in news, music, images and video in order to train AI models and create AI-generated material has become a contentious and bitterly divisive issue in creative industries. The core issue is one of funding, credit and recognition, which can be difficult to track given the vast amounts of data used to train AI systems.
Publishers and creators argue that many tech companies are simply stealing copyrighted materials in what amounts to an existential threat to the creative sector.
“The rise of large language models and real-time content scraping represents a material threat to the news industry,” said DMG Media’s Caccappolo. “There is a critical need to attribute content used by LLMs to generate answers and compensate all content creators for their work.”
Many firms, including giants of the news and media world like Rupert Murdoch’s News Corp, the New York Times, Getty Images and Universal Music Group, have launched legal action against AI companies for the alleged theft. This includes AI-powered search engine Perplexity, ChatGPT maker OpenAI, Microsoft, Meta and image maker Stability AI. Other firms, including Axel Springer, the Financial Times and Lionsgate, have inked licensing deals with tech firms and startups to grant access to their archives, leading to a patchwork of different agreements across the industry.
‘The Cornerstone of a Sustainable Economic Model for News Publishers’
California-based Prorata believes it has a better way. The company says its technology can accurately navigate the complex path AI models take when generating content and assign credit where it is due. While this can be relatively simple in some cases, assigning credit in others can be a complicated and tangled affair. By weighing how each piece of content contributed to an AI-generated answer, Prorata says it can calculate how much content owners should be paid on a “per-use” basis.
Prorata CEO Bill Gross said the firm’s technology “is the only one that credits and compensates creators while providing consumers with highly accurate search results.”
“We have had hundreds of content owners and media companies reach out to us from around the world who are interested in piloting our technology. Stealing and scraping content is not a sustainable path forward.”
In theory, Prorata offers a way for publishers to share in the benefits of the AI boom and continue producing content. It has pledged to share half of its subscription revenues with publishers and creators and its website says it can handle images, text, music and video content.
As the debate over AI-generated content continues, Prorata’s model could serve as a blueprint for balancing innovation with compensation in creative industries. “It could be the cornerstone of a sustainable economic model for news publishers, giving them the incentive to continue investing in high-quality, informative journalism,” Caccappolo said.