Newsmax is warning to the rise of artificial intelligence (AI) by signing lucrative licensing agreements with tech developers and incorporating more automated workflows into its editorial practices, the CEO of the company said on a conference call with Wall Street analysts and investors this week.
Following the release of the company’s third quarter (Q3) earnings report, Newsmax CEO Christopher Ruddy said the company is already starting to see positive financial benefits from various content distribution deals and AI-based licensing agreements, including an arrangement struck with Facebook owner Meta Platforms to use Newsmax’s video clips and web stories to train its large language models (LLMs).
“Licensing is taking the Newsmax brand globally and on leading AI platforms as news consumption diversifies,” Ruddy said.
Newsmax’s embrace of AI isn’t just providing more cash to the business — the company earned $15.2 million in profit on $69 million in revenue during Q3, fully reversing its financial loss from last year — it is also speeding up the editorial process at Newsmax’s cable TV and digital news operations.
Ruddy said off-the-shelf and specialized programs aren’t being used to write articles wholesale, but are being used to create “background information” that might appear on-air and online. AI programs are also helping Newsmax reporters, editors and researchers sift through large amount of dense data, create video and digital graphics, browse through legal documents and other remedial tasks.
“Where an article might have taken 2 or 3 hours to put together and post on the web, it might take less than an hour now or even sooner,” Ruddy noted.
Newsmax is not alone in building out an executing a long-term news strategy based on AI workflows and improvements: The E. W. Scripps Company is taking the same approach at its local broadcast TV stations and national streaming network Scripps News. That restructuring has led to some short-term pain, with pink slips recently issued to hundreds of employees just a few months after two dozen others more were laid off.
Something similar may play out at Newsmax in the coming months as Ruddy and other executives turn their attention to long-term profitability.
“These are very dramatic effects,” Ruddy said, referring to the outcome of AI use at the company. “Sometimes they’re more difficult to quantify, but I do think that will impact the number of employees we need as we grow.”
