One-third of indie publishers could shut down by next year as AI search hits traffic
One-third of publishers in the Independent Publishers Alliance could be out of business by the end of next year if no regulatory intervention is made to protect publisher business models in the wake of AI search, a board member from the group has warned.
Chris Dicker, CEO of Candr Media Group, told The Media Leader that, if nothing changes, an estimated 100 of the 300 websites owned by Independent Publishers Alliance members are unlikely to survive in the next 15 months.
“We’ve already seen some shut already,” Dicker said. “The lay-offs are happening as we speak. I know numerous companies that have made lay-offs. I run a media business — we’ve made lay-offs. Across the board, I’m hearing lay-offs everywhere at the moment.”
Google’s move into AI search via its AI Overview and AI Mode features has severely disrupted the status quo of online publishing by reducing the incentive for users to click through links to publisher websites.
While Google has repeatedly denied, without providing evidence, that these tools reduce referral traffic, Dicker and other publishing leaders have confirmed to The Media Leader that traffic is down “across the board”.
Particularly at risk are publishers that primarily create content — such as step-by-step, how-to guides or other “evergreen” informational articles and recipes — that, as Dicker put it, AI companies can most easily “steal and directly compete with”.
“As it stands at the moment, our content is being stolen without permission,” he continued. “[AI companies] are taking our content and surfacing it to their users instead of them having to come back to us.
“Where is the incentive for any publisher to carry on producing content if it’s just going to be stolen and there’s no remuneration back? The ecosystem collapses. There is no viable, visible ecosystem right now.”
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Strike a deal or sue?
While some larger publishers have struck licensing agreements with AI companies to allow them to train large language models using their content, terms of those deals have been opaque.
Most smaller publishers have not followed suit, in part because they lack the scale to be sufficiently useful — or threatening — to tech companies like Google, OpenAI or Anthropic.
From Dicker’s perspective, striking deals with AI companies isn’t likely to be worth it for larger brands either, as they are “giving away their entire brand” for a value far less than what they’re worth.
“I don’t believe any of these deals will renew,” he stressed. “But if they do, it’s going to be for pennies on the pound, because they’ve got everything already.”
Meanwhile, for any smaller publishers considering suing AI companies for copyright infringement (some members of the Independent Publishers Alliance have done so, including Mumsnet), it’s plausible, as Dicker acknowledged, that they could be out of business by the time a legal decision is made. Big Tech can effectively afford to run out the clock.
“The only way to hold these perpetrators to account is to sue them, knowing full well that they’re always going to end up winning in the long term because of the amount of money they’ve got,” Dicker lamented. “How messed up is our legal system for that to be the case? It is quite shameful.”
AI replacing traffic
Over the past year, some media agencies, such as those owned by Stagwell and the7stars’ sister shop Bountiful Cow, have sought to highlight the opportunity for investment in news publishing even as adspend has continued to move towards social platforms, search and display.
Adam Foley, Bountiful Cow’s CEO and former director of advertising at The Guardian, told The Media Leader that AI isn’t killing publishing but rather it is “exposing how fragile a lot of publisher monetisation models already were”.
As AI content floods the open web, he explained, CPMs are being lowered. At the same time, referral traffic is declining due to the growing popularity of AI search, as well as social media platforms reducing their algorithmic support of news.
“There’s a double squeeze on traffic and monetisation,” Foley pointed out.
Anecdotally, he has seen many publishers he works with admitting traffic is “seriously impacted”, meaning any that relies heavily on programmatic display is struggling.
“Businesses that are built for page views were viable when Google sent traffic. But AI doesn’t send traffic, it replaces it,” Foley continued.
What can publishers do?
Foley believes publishers that invest in original reporting and high-quality user experiences (including with low ad load) are best-placed to do well amid the transition in search.
Furthermore, those with a “distinctive view of the world”, such as the Telegraph or The Guardian, are likely to maintain a closer relationship with audiences, since they offer a “filter” that “resonates” with their readers’ world view — something that is challenging to replace with AI.
“AI can generate clicks, but it can’t build a brand that people trust — and that’s never been more important,” Foley said.
On the contrary, publishers that have “compromised user experience” with high ad clutter and show “snatched lines of editorial in between 10 ads on a page which is jerking all over the screen” are less likely to attract loyal readers and thus succeed in growing their business in the new era.
The issue, especially for smaller publishers and regional outlets, is that their executives have resorted to creating worse user experiences either to keep their content free rather than behind a paywall or to hit revenue targets rather than further cut costs through laying off journalists.
“It’s become a bit of a death spiral,” Foley acknowledged. “More ads meant fewer users; fewer users meant more aggressive monetisation and a worse user experience.”
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From Dicker’s perspective, the “death spiral” is now existential and has occurred due to little fault of the independent publishers he represents.
As he described it, any publisher reliant on revenue from ads and affiliates was suddenly thrown under the bus, as the fair value exchange with Google (display of article headlines and descriptions in return for user traffic) no longer applies.
Sarcastically, he suggested publishers “evolve” by joining class action lawsuits and adding a line in their profit and loss statement for how much money they’ve scraped back by collecting fines — much like how Big Tech might consider paying said fines as a cost of doing business.
On a more serious note, Foley advised smaller publishers to adjust to focus on developing a loyal community of readers and, at the same time, break “the addiction to adtech” and rebuild “something people actually want”.
Dicker agreed, but noted that this may not be realistic for many already working on shoestring budgets amid declining revenue and traffic. Putting up paywalls could be one strategy, but doing so would have an adverse impact on consumers, taking away their ability to access trusted information for free, subsidised by advertising.
Will advertisers reward publishers?
For Dicker, the ideal outcome for publishers, and one that still recognises the growing consumer use of generative AI for search, is to mandate a new value exchange between AI companies and publishers.
That could mean paying publishers a percentage cut of revenue every time a large language model surfaces content from a publisher.
Importantly, such a payment-per-use model is more ideal than paying per scrape, according to Dicker, because an AI company could plausibly scrape a website once but surface that content to users countless times.
Such an intervention, likely through a regulator or further legislation, would at least give publishers the ability to be compensated if their work is appropriated by generative-AI search engines.
However, this appears unlikely given the current political environment: the Labour government has repeatedly sided against the creative industries on copyright, instead opting to court investment from AI companies.
This week, as US president Donald Trump visited the UK, Google, Microsoft and Nvidia touted over $40bn worth of AI investments in the country.
Foley admitted it is incumbent on advertisers and their agencies to help publishers “weather the storm” and “reward the enhanced user experiences that quality publishers will offer” — something he admitted the industry “doesn’t have a great recent track record of doing”.
He continued: “We need to acknowledge that it’s worth paying higher CPMs for quality journalism — which may reach less people than it used to, but delivers trust and an excellent user experience.
“A good outcome would be that we are forced to stop pretending that stuffing pages with clickbait, yesterday’s news and programmatic advertising is a viable business.
“What’s left — trust, tone, talent and first-party data — is worth paying for.”
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