The content licensing economy has arrived faster than anyone expected. Microsoft and Amazon have both entered the marketplace business. Venture-backed startups like TollBit and ProRata have built infrastructure for publishers to license their content to LLMs. And, in 2025, AI companies committed an estimated $2.9 billion in licensing fees to a relatively small number of large publishers. That figure is growing by orders of magnitude.
Every one of these entrants is proof that the market is real. They are not, however, proof that the problem is solved.
A patchwork that cannot scale
Consider the status quo around content payments between creators and distributors, without AI in the picture.
YouTube tracks and attributes an estimated 5 to 8 billion content interactions every day, applying format-specific revenue-share formulas to roughly three million monetized channels – all through proprietary infrastructure it built and maintains entirely on its own.
Amazon Prime Video negotiates individually with hundreds of studios and distributors under a mix of flat licensing fees and per-hour viewing rates, each tracked and reconciled against deal-specific terms.
Apple News+ distributes subscription revenue across thousands of publishers under its own proprietary formula, calculated by engagement time.
Across these and others, the underlying transaction is identical: a platform licenses content, a contract governs what it owes and a payment must be calculated, verified and sent. Yet every platform has built its own system to do it, and every publisher staffs its own operations to manage each relationship independently.
The baseline is a tangle of incompatible systems, opaque calculations and redundant overhead.
Now add AI.
Large language models have emerged as a new class of distribution platform, one that ingests content not from a few hundred large-scale publishers but from tens of thousands of content creators simultaneously. The LLMs create usage transactions that existing payment systems were never designed to handle. With traditional platforms, the math is at least auditable – a publisher can pull Roku’s numbers, do the arithmetic and verify the check. With LLMs, that visibility disappears.
Microsoft, for example, is developing pricing models that would pay publishers based on the “demonstrated value” of their content, a metric that sounds reasonable until you ask who defines value, who measures it and who verifies the calculation. The entity doing the accounting cannot also be a buyer of the content flowing through the system. That’s the fox guarding the henhouse.
The VC-backed startups entering this space don’t resolve the conflict either; they just delay it. We’ve seen this movie before in programmatic advertising, where intermediaries in a complex supply chain each found ways to extract value from transactions at the expense of the principals they were supposed to serve.
Venture-backed settlement infrastructure carries the same incentive. Their investors will constantly be pushing for top-line growth, and when those companies eventually seek an exit, the logical buyers are the same platforms already guarding the henhouse.
What every other industry figured out
Other industries confronted the same challenge, as bilateral arrangements collapsed under their own complexity, and each arrived at the same answer.
The music industry solved it a century ago. ASCAP, founded in 1914 and owned by its members, collects performance royalties from every broadcaster, streaming service and venue that uses music. ASCAP distributes these royalties to songwriters, artists and publishers without any stake in the outcome.
No bilateral negotiations. One independent intermediary, accountable to no one but its participants.
The ACH network did the same for banking. Nacha sets the rules. The Clearing House, owned by its member banks, runs the operational infrastructure. Neither has a stake in the transactions flowing through the system. More than 10,000 financial institutions trust the ACH network because no one inside it has a stake in the outcome.
These institutions exist because bilateral arrangements can’t scale. Settlement infrastructure is costly, complex and non-differentiating – overhead that introduces more risk than value.
Industries like mobile telecommunications that didn’t nail the infrastructure learned this lesson the hard way. The GSMA, a member-owned association representing over 750 carriers worldwide, established the standards and frameworks that allow any phone to roam on any network anywhere in the world. But the operational settlement work was left to commercial clearinghouses. The largest, Syniverse, passed through multiple private equity owners while carriers grew increasingly uneasy about the neutrality of the infrastructure they depended on but didn’t control.
In 2021, Syniverse disclosed that hackers had accessed its systems undetected for five years, compromising credentials across nearly 235 carriers and exposing billing records and message data for billions of users. The lesson was that critical infrastructure answerable to investors rather than participants creates risks that governance by the industry, for the industry, is specifically designed to prevent.
The right hands
The content industry is entering an era of proliferating distribution endpoints, each requiring licensing arrangements with tens of thousands of content creators of all sizes. Every platform, LLM and publisher adds another node to an already unmanageable web.
Left on its current trajectory, this complexity will overwhelm all but the largest organizations and erode trust between payor and payee. The programmatic advertising ecosystem stands as a cautionary example of what happens when complexity and misaligned incentives are left to compound. Without a course correction, the content licensing economy risks recreating the same dysfunction at a greater scale.
It’s time for the industry to build independent settlement infrastructure designed for trust, transparency and accountability. The question is whether we build this infrastructure now – with trust and accountability by design – or wait until complexity and opacity make the choice for us.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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