A month or two ago, Austin Business Journal Editor Colin Pope came out of his office holding his phone. He had just gotten a taste of how Facebook parent company Meta was using artificial intelligence to provide additional insights from stories users had shared on the social media platform.
Not only did the AI share some obvious news bits from the headlines, it appeared to scrape insights from behind the paywall and give users a simple summary of what's in the story without requiring them to visit the original.
Editors, publishers and content creators worldwide are going through similar revelations as they see how their work is being regurgitated by generative AI systems.
The new dynamic, which has played out through lawsuits and content sharing agreements with big tech companies, created an opening for serial entrepreneur Dan Goikhman. He had built a career around monetizing content, founding startups including UNREEL.CO and Replay.
About a year ago, he and his co-founders Krish Arvapally and Akshay Arvapally, who are brothers, built out the foundation for a monetization ecosystem for content and data.
At the time, they weren't sure how it would ultimately look. But after seeing a flurry of content rights lawsuits between giants such as OpenAI and major publishers and celebrities, they landed on the idea of creating a content rights marketplace where media companies could build AI tools that used their proprietary stories and data, as well as allow them to sell that content and data to AI developers in a marketplace.
The new startup, called Dappier, which references happier data, has now brought much of its 10-person team to Austin. On June 26, it announced it raised a $2 million seed round led by Austin firm Silverton Partners. The company already has several customers, including The Publisher Desk and Exame, a leading business magazine in Brazil.
There are limits to how much you can protect your media content, but Goikhman said it's possible to build an ecosystem that makes pulling that content riskier for AI developers.
"There's no amazing, foolproof way of saying, 'hey, just don't take my content,'" he said. "But I do think that if you write the rules, if there's a way to say, 'look, we're the Business Journals, you can take content, it'll cost you a $10 CPM (cost per mille, also called cost per thousand in the media impressions industry) for the latest stories and maybe a $7 CPM for older stories.' If that's there, it's really, really hard, I think, for OpenAI or anyone else for that matter to make a case for why they need to scrape your content on an open, free-use basis, and so we want to kind of provide the rails."
Dappier looks at the emerging generative AI industry as a big opportunity for all kinds of companies. But it'll be easy for many to get left behind, and laws, lawsuits and markets will keep evolving.
"It's going to be a long time before the legislation shakes out on what fair use is," he said. "But at the same time, our proposition is to try and aim to be like what iTunes was to the music industry when they were fighting against Napster. Provide a way to be a good actor."
Dappier's model makes it relatively easy for media companies to turn their data into formats AI can easily use. It then lets creators set a price to charge for access to their data models so that they get paid each time their data is used by an AI system. Meanwhile, it lets publishers create AI agents or assistants that allow readers to further engage with the company's current and archived content.
Goikhman built his first several startups on the East Coast, and he's worked with Dappier's other co-founders for around 20 years. Around 2021, Goikhman and his early team members decided they wanted to relocate. They each wrote down a list of cities that they'd be willing to move to. Austin came out on top. The company is working in a coworking space in the Lakeway area now, but it plans to move closer to downtown and eventually build out a larger office that could house a significantly larger team.
Goikhman said that Silverton Partners discovered Dappier and reached out to them. Over the course of a couple months, the Dappier team decided it had found a great partner to work with, noting some of Silverton's top investments in companies such as WP Engine.
"We all understood that this was early days in a new space. But they understood our domain expertise," he said. "And knowing that as serial entrepreneurs, we know what it takes to kind of figure it out as the market evolves."
Generative AI is an increasingly crowded industry, with chatbot builders, large language model developers and countless smaller firms helping customize data sets. Goikhman said it's a new landscape, but a somewhat familiar evolution for many publishers.
"This is a new distribution channel," he said. "You used to have a print magazine, and then you got a website, and then you got Facebook. This is just another way and an awesome new way to make money. So will it be life changing today? Probably not. It's going to take some time to build up. But just like mobile went from zero to however many hundreds of billions of annual dollars in revenue it is now, I expect the AI content distribution landscape to evolve similarly."
