No Such Thing As A Free Launch
Big Tech companies have spent billions of dollars integrating AI into their products. Now they need to figure out how to turn a profit – and the method many have alighted on isn’t new or particularly subtle.
They’re giving out the first try for free.
On Tuesday, Google made all its AI features – which previously cost $20 per month – available for free to Workspace users, The Verge reports. The catch? Workspace plans will now cost $2 more a month across the board.
Meanwhile, on Wednesday, Microsoft relaunched its Copilot (itself a relaunch of Bing Chat) as 365 Copilot Chat, which is available for free. But users can also pay for additional AI agents based on usage or shell out a monthly $30 fee for access to the full Microsoft 365 Copilot service.
You might be noticing a pattern here, which is that these features aren’t actually free. Users are either paying more upfront or being nickel-and-dimed for additional services until they fork out the full subscription cost. (If you’re a Microsoft user in an Asia-Pacific country, you may even be dealing with price hikes and new fee structures, per The Register.)
Either way, this trend will only continue as big platforms dial up the monetization of chatbot AI data consumption.
Pornhub Pays
The Supreme Court heard a challenge to Texas’s age verification law for adult websites on Wednesday. Social media chatter about the proceedings is illuminating some surprising aspects of the creator economy.
The Texas law requires websites to verify a visitor’s age if at least one-third of its content is classified as “sexual material harmful to minors.” Eighteen other states have passed similar laws.
During the Supreme Court hearing, a trade group representing porn sites, the Free Speech Coalition (FSC), conceded that 70% of its content could be considered obscene to children.
That revelation was prompted by Justice Samuel Alito asking FSC whether sites such as Pornhub publish essays by luminaries “like the old Playboy” used to do.
Well, Pornhub may not publish pieces by Gore Vidal or William F. Buckley Jr., but it does host explainer videos about neural networks. Really.
Engineering PhD student turned adult content creator Zara Dar publishes non-pornographic STEM videos on both YouTube and Pornhub. And she claims her Pornhub ad revenue per view is three times higher than on YouTube.
However, TastyFPS and Raptor Bacon, two creators who post gaming videos on Pornhub, have previously claimed YouTube has the higher CPMs.
Opponents of online age verification laws argue that they deter adult users who fear sharing their data, which in turn threatens creator revenue – apparently even for non-adult content.
Forget it, Jake. It’s Chinatown
The law banning TikTok is designed, per its own language, “to protect the national security of the United States from the threat posed by foreign adversary controlled applications.”
Well, clearly that’s backfired, because American TikTok users are so indignant about the decision that they’re flocking to other, more explicitly Chinese social video apps instead.
The most popular so far is Xiaohongshu, or RedNote, more accurately translated as “Little Red Book” (which has Maoist connotations). The app gained more than 700,000 new users over the past few days, Reuters reports. Meanwhile, Duolingo claims a 216% year-over-year increase in people signing up for Mandarin lessons, which it attributes to users learning the language “out of spite.”
The trend might not last, of course, and there are still some kinks to work out. Censorship of LGBTQ+ content, for example, might require a stronger workaround than even Americans who unironically use the term “unalive” to circumvent content moderation are accustomed to.
But the exodus is already setting the stage for a fascinating cross-cultural exchange – one that happens to also disrupt the best laid plans of marketers who assumed everyone would immediately move from TikTok to Instagram or Pinterest.
It always ends up being the secret third thing, doesn’t it?
But Wait! There’s More
Bluesky is working on its own photo-sharing app called Flashes. [TechCrunch]
Opening arguments in The New York Times copyright lawsuit against OpenAI have begun. [Digiday]
OpenAI, meanwhile, will fund four new Axios local newsrooms. [Axios]
The CEO of Walgreens admits that the retailer’s anti-shoplifting strategy failed: “When you lock things up, you don’t sell as many of them.” [Business Insider]
More than 400 Washington Post employees say they are “deeply alarmed” about the paper’s direction, as per an open letter to owner Jeff Bezos. [CNN]
State Farm cancels its Super Bowl commercial in response to the LA wildfires. [Ad Age]
You’re Hired
Nextdoor hires Michael Kiernan as its new CRO. [Adweek]
Out-of-home agency billups appoints Ranganathan Somanathan to the newly created role of chief global growth officer. [MediaPost]