Digital Bookworm: How Emerging Technologies Disrupt the Publishing Industry

The general NFT market has already permeated its way into a wide variety of businesses. It has jumped — and continues to jump — from industry to industry such as art, media, and gaming. Among its most recent endeavors, however, is the idea of NFT books. Those in the publishing industry have begun to notice a decline in readership throughout the years. Through innovation, they hope to recapture, and even expand upon, their audience base. Additionally, most authors and publishers share growing apprehensions that physical books — whatever genre — may soon become obsolete as technology continues to develop.

Hence, they have looked to embrace the digital disruption rather than fear it. This is evident in the rise of ebooks and audiobooks. Technology, however, comes with its fair share of perils. In this light, piracy and loss of sales prove to be among the most troubling for authors and publishers alike. The marriage of books and NFTs could provide a potential solution to these aforementioned problems.

In terms of drawing in more readers, NFT books could significantly change the reading experience in a positive manner. Turning books into tokens will incentivize owners to — in some way — promote a particular title. It essentially becomes an investment. This, in turn, also brings in more sales for authors and publishers. “Imagine when all of an author’s readers can suddenly make money as well,” explained Margarita Guerrero, head of partner and publishing relations at the publishing startup Readl. “How much more would they be engaged?”

Flipping to a New Chapter

Just last week, British publishing company Pearson announced its plan to turn its textbooks into NFTs. The firm hopes to profit from secondary sales through this move. The rise of digital textbooks has allowed publishers to benefit from secondhand sales. Physical educational books would often transfer from owner to owner, but this left the publishers with little to no room for profit.

“In the analog world, a Pearson textbook was resold up to seven times, and we would only participate in the first sale,” explained Pearson CEO Andy Bird. “The move to digital helps diminish the secondary market, and technology like blockchain and NFTs allows us to participate in every sale of that particular item as it goes through its life.”

The same is true for other genres outside of educational textbooks. Authors and publishing houses are often dependent on selling thousands of copies of books for sales at modest prices. Most books, however, usually don’t take off as much as expected. In 2020, Bookstat data showed that 2.6 million books were added to the market. It further cited that 96 percent of the total sold less than 1,000 copies and only 268 sold over 100,000 copies. Suffice it to say, the economics for writing and publishing don’t add up when it comes to profits.

NFT books are not entirely novel. However, its market is not as thriving as NFTs of virtual art. Other authors have since been using blockchain technology to self-publish their own books. Moreover, German digital publisher Bookwire also launched an NFT marketplace of its own last year. Despite this, the general publishing world is still yet to capitalize on these emerging technologies.

An Industry Bookmark

Pearson’s entry into the NFT world could mark a new era in digital publishing. Likewise, it sets the tone for other publishers to follow suit and profit off of secondhand sales. Although, it stands to argue that the integration of NFTs in digital publishing serves no technical innovation. Publishers can already track the ownership of a textbook, for example, even without using blockchain technology.

The highlight of this nascent technology is the offer of decentralization. Integrating blockchain into digital publishing would only add an additional layer to the existing digital rights management (DRM) framework that mitigates users from pirating books. Also, NFT owners can generally sell their tokens on third-party markets without the approval of creators. Yet, big companies entering the industry seem to discount this principle.

This also goes against what most publishers want, which is to give buyers less control over their titles. Nonetheless, Pearson’s commitment to NFTs is not yet final. For the most part, Bird has already expressed that Pearson has “a whole team working on the implications of the metaverse and what that could mean for us.” Publishers may also see this as an opportunity to dive further into digital markets and tap into a wider audience.

A bunch of publishing startups have started to explore similar initiatives. Their take, however, is more for authors and readers-turned-investors to jointly own the copyright to a particular title. This gives blockchain technology an opportunity to shine. “That’s the beauty of web3,” Guerrero added. “At the end of the day, it’s all about ownership, and if you own something, you have the right to resell it. You have the right to lend it. For the first time in history, the author of the IP will always get something back.”

Don’t Judge the Cover

Author Emily Segal was among the first to publish a “Web3 book” titled Burn Alpha. In April 2021, Segal launched a crowdfund for her work on Mirror — a publishing platform that leverages crypto and blockchain technologies. In just a single day, the author raised 25 ETH (which was around $52,000 at the time) from 104 investors including Andreessen Horowitz general partner Chris Dixon and NFT marketplace Zora co-founder Jacob Horne.

“It’s not just about the mechanics of being able to do a crowdfund. It’s about making sure it gets in front of people who are interested in what you’re doing and interested in contributing,” Segal noted. “I do think people were excited that it was the first [web3] book, and I was very conscious of that. People, especially those in a tech adjacent world, love ‘firsts.'”

Seeing the potential of ebooks and blockchain tech, Alexandria Labs is aiming to expand upon the growing market. It hopes to become the “great library for the metaverse” after the platform launches its own NFT books library. “We were really inspired by the ancient patronage model where the wealthy classes would support the arts so that everyone can access it,” explained co-founder Amelie Lasker.

“We want to try different tiers,” Lasker elaborated. “Maybe there’s a more accessible, more affordable version where it’s just the ebook, and then there’s a more expensive version that has original art or some kind signature from the author—or a unique piece the author has written into it that’s only for that one copy. That creates rare books.”

“One cool thing about this ebook model is that for the first time ever, secondary ebook markets are monetized,” added Alexandria Labs co-founder Sonia Joseph. “Right now, if someone were to buy a book, that’s a one-time transaction. If they sell the book again, the author won’t earn a commission. But because it’s a digital object that can be tracked, every time a book changes hands, the author is earning secondary royalties.”

The Epilogue

Emerging technologies seem to disrupt every industry they can reach. Who would have expected NFTs and books to become a thing? For now, however, this is all just the tip of the iceberg for NFT books and the future of the general publishing industry. Whether these disruptions will bring about positive outcomes remains to be seen. How other individuals — whether authors, avid readers, or NFT enthusiasts — will receive these developments also has to be gauged.

Source: Esquire, The Guardian, The Verge