"AI licensing revenue is emerging as a rare bright spot, according to first-quarter earnings. In particular, AI licensing deals with Meta, signed in December 2025, are starting to produce "meaningful" revenue for some publishers, for the first time. While neither publisher broke out exactly how much money they made from AI licensing deals in Q1 2026, USA Today Co. for the first time reported "notable" revenue from AI licensing agreements in the quarter."
"AI licensing revenue falls into two buckets - lump-sum deals or pay-per-use models - and a publisher can secure either or a mix of both. But it's hard to forecast because it blends fixed licensing fees with volatile usage-based payments tied to external AI platform demand. The result is a real but uneven revenue stream that can be difficult to model as a consistent offset to declining traffic-driven ad revenue."
""We haven't seen enough proof points to tell if the licensing story is going to play out the way [IAC and USA Today] are envisioning," said Daniel Kurnos, managing director of internet & media at investment banking firm The Benchmark Company. "It's just too [unclear - text cut off]" Analysts remain unconvinced it is material enough yet to offset ad revenue lost by traffic declines."
Publishers are diversifying revenue streams away from traffic-dependent advertising as AI licensing deals become increasingly significant. USA Today and IAC both reported notable AI licensing revenue in Q1 2026, driven by licensing agreements with Meta finalized in December 2025. AI licensing operates through two models: lump-sum deals or pay-per-use arrangements, often combining both. However, the revenue stream remains unpredictable due to its blend of fixed licensing fees and volatile usage-based payments dependent on external AI platform demand. While representing a positive development for publishers, analysts remain skeptical about whether AI licensing revenue is substantial enough to meaningfully offset losses from declining traffic-driven advertising revenue.
#ai-licensing-revenue #publisher-business-models #advertising-decline #meta-licensing-deals #media-earnings
Read at Digiday
Unable to calculate read time
Collection
[
|
...
]