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NYT, OpenAI, and fair use
Plus, The Economist’s short-form video guidelines
Good morning and welcome to Business Side.
Starting this week, we have a new posting schedule: Our briefing will hit your inbox Monday and Wednesday mornings. With two briefings per week, we’ll be able to devote more time to each edition, and we’ll still roundup the whole week’s news.
Today, we’re covering how fair use might apply to generative AI, The Economist’s short-form video guidelines, and the web version of Threads. Let’s dive in.
NYT, OpenAI, and fair use
Last week, we learned that The New York Times might sue OpenAI, as licensing talks between the two companies grew heated.
The news follows recent reporting that a coalition of publishers — including The Times, NewsCorp, and IAC – have been considering coordinated legal action against AI companies. In the broader media world, several suits were already filed this year:
Getty sued Stable Diffusion in February.
Authors Mona Awad and Paul Tremblay sued OpenAI in June.
Comedian Sara Silverman sued OpenAI and Meta last month.
At the heart of these cases is the concept of fair use, which allows copyrighted material to be used without permission for a limited and “transformative” purpose. For example, fair use allows a teacher to include a few paragraphs from a magazine profile in a lesson without paying the publisher or worrying about copyright infringement.
We don’t yet know how fair use will apply around generative AI, but two recent cases provide clues.
In 2015, a federal appeals court ruled that Google was allowed, without permission, to digitally scan tens of millions of books for its Google Books product. The decision rested on three arguments:
The purpose of the copying is highly transformative, the public display of text is limited, and the revelations do not provide a significant market substitute for the protected aspects of the originals. Google’s commercial nature and profit motivation do not justify denial of fair use.
The first two arguments could plausibly hold for generative AI companies. Large language models do highly transform the material, and any word-for-word copy is generally limited.
But AI companies seem to be on shakier ground regarding the third defense. As AI chat interfaces continue to grow in popularity, it’s likely that they will address all sorts of needs currently filled by publishers and other copyright owners.
The second case hinged on another issue: the commercial use of copyrighted material. In a 7-2 decision earlier this year, the Supreme Court ruled that Andy Warhol was not protected by fair use when he altered a photo of the musician Prince – and then licensed that photo to Vanity Fair. In the majority opinion, Justice Sonia Sotomayor acknowledged the photo’s transformation, but wrote that it “must be weighed against other considerations, like commercialism.”
Whether or not The Times sues OpenAI, a legal fight between news publishers and AI companies seems inevitable – with an interpretation of fair use at the center.
To go deeper, here are some resources:
A Bloomberg Law analysis of the Warhol case
An HBR overview of the generative AI legal landscape
An academic paper on “Artificial Intelligence’s Fair Use Crisis”
And here’s the latest news in digital media:
The Economist’s head of social media Liv Moloney shared four guidelines to create short-form videos for Instagram and TikTok.
Activist investor ValueAct sold off some of its NYT shares, lowering its stake from 6.2% to 4.6%.
Threads is planning to launch a web version early this week.
Elon Musk posted on X that “Block is going to be deleted as a ‘feature’, except for DMs.”
Amazon’s “Sponsored Product” ads will now appear on premium 3rd-party websites, including BuzzFeed, Hearst Newspapers, and Ziff Davis brands.
WPP’s CEO Mark Read said savings from the use of generative AI in ad campaigns “can be 10 or 20 times.”
A federal judge upheld a U.S. Copyright Office finding that AI-created art is not copyrightable.
The newsletter Formats Unpacked profiled Not a Newsletter.
NYT profiled Standard Industries, an industrial company that’s invested in Puck and Air Mail.
Nieman Lab interviewed Kendall Baker, who left Axios to lead newsletters at Yahoo Sports.
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