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Startups are currently re-imagining the world of books, from authoring to publishing, selling, buying and property rights, and see vast possibilities to change the way writers earn their living through the digital coding revolution sweeping the world, especially through “Web 3” technology. What if book lovers, for example, could own stakes in the Harry Potter series? Or monetizing “fan literature”?
The author of the novels, Ally Griffin, asks in an article published in the American magazine “Esquire”, what if the “Harry Potter” series could be turned into something like a public joint stock company in which individuals could buy “shares”, and then with the growth of the franchise these “shares” would become » more valuable? Then the whole thing turns into an investment opportunity. Thus, early readers of stories can make a contribution that will multiply later if the book’s popularity grows. And if readers can own a percentage of the franchise, it may motivate them to help the book succeed, as they can promote it on Facebook or use their talents as directors to bring it to screen, all of which will increase the value of their original investment.
This is the future that a number of publishing companies are pursuing with the goal of changing the value of a book from a $10 Amazon product to an investment opportunity worth hundreds or thousands of dollars, while creating a market of readers eager to see the books they love succeed.
Griffin says the endeavor likely won’t work, and that finding readers will be a huge challenge, but if it does, seeing those companies would benefit the author, who in that scenario could keep a percentage of the ownership of those “shares” and win over investors altogether. Like Amazon owner Jeff Bezos who holds a percentage of Amazon stock, and gets richer as the value of his company’s stock increases.
Usually, the rights to the book are owned by a publishing house or the author (if self-published), but these start-ups imagine a third option, where authors and investors jointly own the copyright, and see the possibility of this being achieved by “Web 3” technology, which allows the ownership of Digital information, whether a video on YouTube, an album on Spotify, or a book, granting the property rights to earn “royalties,” where a YouTube video is earned from views, a music album from broadcasting, or a book from reading.
“This is the beauty of Web3,” Griffin quotes Margarita Guerrero, head of partner relations and publishing at publishing startup Riddell. After all, it’s all about ownership, and if you own something you have the right to resell it, and you have the right to lend it. For the first time in history, the author of an “IP address” will always get something in return.
Griffin finds it exciting in theory, but in practice, outside of the wild success stories of “Harry Potter”, there are very few books that generate enough returns to spark an investor’s desire to participate. The industry currently relies on selling thousands of books at a relatively modest price, with BookStat reporting 2.6 million books added to the market in 2020, 96% of which sold less than 1,000 copies, which means that few authors earn a living only from Writing and publishing books.
Griffin notes that the book’s author, Emily Segal, wanted to change that, and in April 2021 launched a crowdfunding fund for her book Born Alpha using the Mirror publishing platform, which uses the Ethereum cryptocurrency. It raised 25 Ethereums from 104 investors, which equates to about $52,000 in one day. But if fans in a crowdfunding fund make donations in exchange for a product, Griffin explains that backers in a crowdfunding fund on Web3 are investing, and financing a project that attracts early Ethereum wealthy people looking for investment opportunities. What early investors get in a collective crypto fund are tokens that act like “shares.” The non-fungible token represents intellectual property, and whoever owns it actually owns the rights to the book.
Let’s imagine a world in which we can invest in “Harry Potter,” says Griffin, and what can be earned once the book series is complete. Noting that the value of the Harry Potter franchise reached 43 billion dollars as of 2021, which will likely increase in value with books, movies, merchandise and the use of theme parks “Internet protocol address” Harry Potter. In this scenario, many people can watch for a low fee, but only one (very wealthy) person is really the owner, and that person increases the value of their investment by lending it. Like a record company that owns CDs of top musicians: anyone can listen to the album on Spotify, but one (very rich) entity earns royalties for every broadcast.
That’s what Alexandria Book Labs is up to, co-founder Emily Lasker says: We were inspired by the old patronage paradigm, where wealthy classes support the arts so that everyone can access it. The platform will launch with a small library of books with irreplaceable icons, with different levels of experience. There may be an accessible and affordable version that is just an e-book, and then a more expensive version that has original art or some type of signature from the author, or a unique piece written by the author inside a custom copy, which constitutes rare books. One of the great things about this e-book model is that for the first time ever secondary e-book markets are being invested in, adds the company’s co-founder, Sonya Joseph. Hostess: Because it is a digital object, it can be tired every time a book turns hands, and the author earns secondary royalties.
But is there a secondary market large enough to generate revenue? Griffin points to some startups seeking to add value to owning the digital good, such as publishing company Paragraph, which is looking at a “token gateway” approach, where an author could offer exclusive benefits to readers who reach a token threshold, such as membership in a community Or merchandise, signed copies, and special events, motivating readers to own a greater percentage of the book. About this, says Paragraph founder Colin Armstrong: “The author could put some content behind the scenes as a portal, making it available only to those early supporters.” If he wishes, he can allow token holders to participate in choosing the direction of the writer’s stories. The writer can create a voting mechanism and allow those early supporters to vote on how to proceed with the written content.
Other startups like SolType see another way to reward readers, as they are building a social platform for reading, where they can offer “tips” to the author, gain the ability to comment on books, and be in a community with the author, where the first 10 tip readers earn a certain percentage, and the The tips are later shared between them and the author and owners of the book’s non-fungible tokens, and SolType takes a 10% service fee. “We envision a kind of Web3 marketplace for social networks,” says Juan Briceno, one of SolType’s founders. We have a model that rewards readers and buyers of non-fungible tokens to promote the author’s work. We make building communities easier for authors.
And to all these advantages, Griffin adds: What if we could write in the Harry Potter universe and make a living doing it? There are companies that see great opportunities in “fan literature,” such as Alexandria Labs. While some authors object to the idea, “fan literature” is how some write their books. Griffin reports that EL James’ novel “50 Shades of Gray” began as Twilight fan stories. There are 355,595 works by Harry Potter fans on the Archives of Or On platform, although it attracts thousands of readers whose authors cannot sell their work due to copyright law. But what if Rowling could sell her characters for use in “fan literature” and earn a percentage of the income each time someone else used them? Griffin asks.
It’s almost like software licenses, Joseph says. Creatively this gray area is colored in, providing space for fans to be part of the creative process without infringing on the original author, and there are certainly authors who would be willing to give it a try.
If the characters can be sold for use in fan stories, the start-up Adem aims to make the characters owned by the community from the start before putting them into a book. “Irreplaceable tokens allow characters to exist through any medium imaginable,” says Chris Dixon, head of Andersen Horowitz Venture Capital. Characters developed by ADEM creators will be part of a shared world called ADEMVERSE and can live in games, TV shows, movies, books, or in genres not yet created, thus earning property rights to the creators of the icons each time they are used.
This may seem like a far-fetched dream right now, says Griffin. The players are few, their companies are young, and there are no books on their platforms. Also, the platforms are complex and not easy to use at all. But even if it becomes easier to use, it will not solve the biggest challenge facing the publishing industry at the moment: finding readers.
The author of the article says she has funded mass fiction using Ethereum and sold chapters of books as non-fungible tokens, but although she sees plenty of opportunities in this area, she will publish her book for Kindle. For now this is where the readers are. In order to truly influence the industry, one of these platforms will have to become the next Kindle.
Everyone wants an alternative to Amazon, and we wonder if Web3 offers an opportunity to make that alternative in a financially viable way, says Emily Lasker, co-founder of Alexandria Labs. ».
Griffin sees the only startup poised to do so anytime soon is Wattpad, with five million writers currently contributing their stories to the app, and 94 million users spending an hour reading each day, mostly from Generation Z. If Kindle or Wattpad decide to enter the Web3 space before it’s too late, they probably have a better chance of success, because they have large markets, or traditional publishers could get involved and change the whole game.
And yet, this future in which an author can fund a book up front, attract investors, sell pedigree and even generate income for his fan base, while retaining an ownership stake in his work, that future doesn’t exist, and the author doesn’t magically win readers over those things. “The interpersonal part is still as difficult in Web 3 as Web 2 or traditional publishing,” says Segal, “and the author still has to connect with people, promote his work, research, and make sure that what he’s doing attracts readers. It is not a magic wand.”
However, one day it could be. Could the next Harry Potter be financed up front? Can the biggest fans become investors? Can they contribute to success by writing “fan literature” and doing fan art? Can they make a profit if the book eventually becomes a movie or a theme park? Could this create a market for readers and ultimately prove to be a better strategy for readers and authors alike? That’s what Griffin hopes.