Congrats on the article, Elle. And a clever way to pitch, too (though I can't quite get my head around if there woould be any awkward GDPR implications here in the UK).
I'm in the camp of finding this proposed future rather dystopian. It doesn't help that NFTs and crypto have such terrible reputations at the moment, of course, and that's something that could certainly shift over time as the early adopter get-rich-quick schemes and scams fall away and the blockchain can return to being a useful bit of invisible tech. For now, though, I don't see many benefits for the author, or for most readers.
I'd expect this sort of investment opportunity to attract people interested in money and investment, rather than anyone interested in books/art. But the catch-22 is that books are a terrible way to make money and a terrible investment generally. :) This has been the case for a long time (always?), so I struggle to see how it would be appealing to investors (especially once that "FIRST!" novelty bubble pops).
The notion of giving away partial ownership of ideas and stories feels very strange to me. Won't investors demand sequels, and control, and ROI in general? There's a version of this where creativity and innovation is entirely crushed, as authors all fall into a template of trying to create the most investment-friendly 'stories', while investors then pressure those authors to make more of the same.
There are some basic practical benefits you mention, though, like enabling royalties through the 2nd-hand market. That's an interesting use case that could run silently in the background and doesn't really require the additional layers of financial complication. Blockchain is often presented as an exciting opportunity to Make Loadsa Money $$$, but its in the more mundane-but-useful instances that I think it is most likely to take off.
Ultimately, for me, the assumption that everything will and should be monetised is where I take issue with a lot of NFT, crypto and blockchain concepts. Fanfiction is done out of love for the source material, and I'm not convinced that it needs to be shoehorned into an official monetisation model.
I think what surprises me so far about blockchain tech is that there are so few useful applications of it - or even ideas. Perhaps I'm thinking too small, but it seems its promise should be more evident and more interesting (beyond the early investor Loadsa Money $$$ crowd, that is). Ed Zitron had some interesting thoughts on this point: https://ez.substack.com/p/its-like-the-early-days-of-the-internet
Anyway, I'll shut up now. Always fascinated to see what you're poking at, Elle!
I agree with you in a lot of ways, and won't be putting my own IP up for sale anytime soon. I think if you compare this idea to self-publishing, this idea definitely seems a lot worse. But if you compare it to traditional publishing, it seems better.
For example: you say that "the notion of giving away partial ownership of ideas and stories feels very strange to me." I agree! And yet, so many authors give away FULL ownership of ideas and stories when they enter into a traditional publishing contract.
They do this because they hope the traditional publisher will invest in their book and market it—but it's not an even trade. No startup would take investment and marketing power in exchange for giving up 100% of their company. And yet we give away 100% of our art!
The proposal here then is a middle ground between self-publishing and trad publishing. If a traditional publishing house like Penguin, for instance, wanted to publish my book, I might be willing to take a $20,000 investment from them (not advance) in exchange for them marketing and distributing my book. But I could choose to retain majority ownership of my IP—say 51%—thus still retaining ownership and control over my work.
Many writers will still choose self-publishing. Just like many companies will still choose self-funding. If you can do that and make it work, that is by far the best way to do things. And none of this precludes any artist from writing for the love of it, or from not monetizing their work at all. Those options are always available!
After researching the industry, professionally I think this is really only an alternative to trad publishing, which doesn't seem like a good deal for writers most of the time. Personally, I intend to stick with Substack 😆
You make a good point regarding what the alternative publishing terms are.
Kristine Kathryn Rusch, who was originally traditionally published and has been indie for many many years now has a series of posts about licensing and how licensing in the trad. publishing book space is completely backwards. In the non-book world, IP holders have the power and don't give away the copyrights to their works to licensees for the entire term of the copyright like Trad Pub makes you do. The licensor and licensee work together to both have success. The licenses are time-limited.
Unfortunately, most traditionally published authors have zero ability to flip this dynamic in their contracts because it's the standard "publishing" contract and the publishers won't give in. Hugh Howey was able to crack that nut with Wool and do a print rights-only, limited time distribution deal with Simon & Schuster, but I think the backlash was crazy and no other Big 5 publisher has offered anyone a deal like that recently.
That's an interesting bit of extra context. Useful to see how you imagine it slotting into the wider ecosystem. One potential difference is that traditional publishers are built for making books, and the people who work at them tend to love books. I wonder what kind of investors would be attracted to crypto-funded projects, and whether they'd be interested in 'the book' or simply in the potential profit (and does that even matter?).
My guess is that potential investors would view books the same way that publishing houses view books: Is this marketable? Will this make me money?
In either case the motive is the same. Right now there is no such thing as an entity that is “interested in the book, and not interested in the potential profit.” Publishing houses are businesses, they are motivated by profit and they aren’t going to risk their shirts for a niche title.
Commercial books will do well in this ecosystem just as they do in the current one. And we’ll always have to self publish books that are of niche interest! 🤓
I wonder how it would work in terms of volume and spreading risk. Publishers can spread risk by publishing lots of books, and mixing niche and more commercial fare to some degree.
Publishers are also set up to work over a long period: I wonder how it would translate to individual investors who might not have such a large portfolio, or be willing to wait.
Curious! I like that this raises more questions, the more one thinks about it. :)
Totally! Investment groups do that too. Right now investors typically specialize in a certain asset (tech, consumer products,real estate, etc.) but then spread that risk by investing in several assets in that category.
You might have an investor who solely invests in media (books, music, movies) or even books specifically, and thus a particular book is just another asset in the portfolio.
Even if you talk about individual investors - like an angel investor - they usually invest alongside an angel group that specializes in a certain kind of asset. So they would still be part of a diversified fund.
I’m realizing that maybe I should have also explained how investors work today, and how publishing houses work today in my article. Because there seems to be a lot of confusion online as to the “evils” of the former and the “virtues” of the latter. When in my mind it’s kind of the reverse! 😝
What an incredible way to pitch- congratulations on a fascinating article and on getting it into a dream publication. You are an inspiration, as always. ✨
Ok, this hit the trifecta for me: a relatable (finally) analogy/explanation of how writers can use the blockchain; a revolutionary pitch tip; a mind-blowing publishing concept in an exceptional article. Well-played, Elle!
Thank you for the analogies! I think that's what's missing. The mainstream self publishing community (in my experience) has negative beliefs about blockchain, and just wants to blow up with booktok. It's really hard to find educators who explain it simply.
I think the mainstream publishing community has negative beliefs about a lot of new things. It’s like we want to hold onto this romantic notion of what literature and books once was (and I totally understand that nostalgia) but I also want to embrace what is. I have found this to be an incredibly rich time for writers, and I think future generations will look back on this moment as a romantic literary time!
Aw, I'm picturing an art history class 100 years from now exploring the creative lives of crypto pioneers :) My partner creates NFTs with collaborators on a project called evrloot. He gets to write, others get to design or market it. It's amazing to see dedicated artists co-owning what could be the birth of a video game, and actually making liveable money from the beginning.
Do you have friends in web3 publishing services you could recommend? Or is this a question to ask 5 years from now?
Sort of? Rather than platforms like Mirror or consulting companies like Lost Books, I'm wondering if there are people acting like trade publishers in the blockchain space, taking care of minting, airdropping to the right folks, stuff like that.
Fascinating article and outstanding research. If this process takes off, one thing you can guarantee is that secondary markets will form, derivatives contracts, financial instruments, and all other manner of financial engineering will ensue, leading to boom/bust cycles. That's not necessarily a bad thing, but for this model to stick, it would have to survive the initial bust after the inevitable bubble. That's sort of what's happening with the crypto/NFT market right now. If it survives, and learns, it'll persist. But you're seeing a lot of wash out during this crash.
By the way, I have a background in finance and journalism and I'm currently writing a contemporary fiction novel set on Wall Street. If you ever have questions about the stock market, finance, valuation, etc., don't hesitate to reach out. Happy to help anytime.
I had a long conversation with a friend about the blockchain recently and he made the salient point (of which I didn't have a rebuttal) that once you are talking about an asset or something that is offchain, the use case for blockchain falls apart. Like why does the restaurant in NYC that sold NFTs for access to tables need to use the blockchain to facilitate that other than because the blockchain is (was) the hot thing?
Neil Strauss recently created NFTs of one of his books and sold them on Opensea, and then selected one random token holder to get the copyright to the book. But to execute that transfer of rights, they still needed to effectuate the copyright transfer off-chain.
We can see what happens when speculation runs rampant and then an overheated market crashes.
I think the better use case for blockchain and tokens in the book space is creating a community around an author book that go wherever the author is. Substack is great but what happens if you need to port your audience somewhere else? Or what if I wanted to give exclusive access to paid subscribers to something on another platform? Maybe a token recognized by both Substack and that other platform could help facilitate that.
Totally. A lot of these use cases don’t need to live on the blockchain at all. And if they do, they don’t pertain to anything off chain. We’d have to basically have the whole internet on chain for it to actually work like this!
“… a lesson in the power of creating a platform for your work…” This is so true. You not only have to do the hard work of creating a platform, but then you have to figure out creative ways to use it. (As you did with mining your list for the contacts you needed and then reaching out to them.) I wonder how many creators really think about how they can use their platform in new ways to reach their goals?
Congratulations! It’s funny, I saw the Esquire story first, recognized the byline, and checked my email to find a corresponding copy of the newsletter that I have long enjoyed.
I do hate to say that I think you picked the wrong startups to focus on, and a framing that focuses far too much on investors and far too little on the storytelling and creativity advances that become possible through blockchain technologies.
Personally, I don’t want books to be seen primarily as investment opportunities rather than for their artistic or entertainment value. I don’t want books to become commodities to be pumped and dumped by TikTok influencers. I don’t want to see copyrights fractionalized so that creators incrementally lose control over their own characters, worlds, and visions. I don’t want to see hedge funds crowd true fans and early adopters out of croudfunding opportunities.
These are nightmare scenarios that you present as aspirations, not to mention the legal gray area of representing NFT books or other literary assets as investments. As regulation comes into focus, some of the practices you describe could lead authors into ruinous lawsuits, hefty fines from the SEC, or even jail time.
Speaking as a Web3 author who has already minted tens of thousands of literary NFTs for thousands of readers, I pledge to fight against the future you’ve presented in your article with every ounce of strength I have. Your dystopian funhouse-mirror take slanders many of the hard-working authors who aren’t using bitcoins and ethereum to rack up points in a game.
Yes it’s true. The scope of this article was focused entirely on the premise: what if books were fractionally owned by authors and investors, rather than by publishing houses. Because of that, it’s inherently business focused, and not reader focused.
But, the reason I did that is that I believe that if art was better funded, then it would be better available to us all. It’s already true right now: we are more likely to read a book by a big five publishing house, than to read a self-published title. Simply because better funding allows that title to be better marketed.
Better funded art just means more people have access to it. It doesn’t actually make the work more or less creative, or more or less entertaining, or more or less beautiful.
And TikTok sold 20 million printed books last year. That doesn’t make those books a commodity. It just makes them better read and loved.
I think it depends a lot on the intentions of the funders. Philanthropic or arts-enabling funding is one thing; investors who expect some kind of return is another entirely. The problem with the NFTs and crypto scene at the moment is that it appears to be populated primarily by the latter.
Of course, I'm not saying that it's wrong to expect ROI. I'm not anti-money. :) But I think there's a clearer case for investment in, say, a tech start-up, rather than a new fictional story.
(also, TikTok is an interesting example because those viral boosts happened without requiring NFTs or some kind of complicated investments share model - it was fans being fans, like they've always been, just in a new venue)
Congratulations on the Esquire article. I'll bet that is blowing up your subscribers numbers!
I'm a crypto skeptic myself, and I am guessing that most of this was probably written and researched before the crypto crash. Has the dumpster fire that the crypto market has become over the past few weeks dampened your enthusiasm for this at all?
I do notice and appreciate some notes of caution in your article. I would question the concept that this really represents a new way to monetize a book. It really sounds more like putting the public in the position to act like a publisher. The author collects money from the sale of NFTs (like an advance) and then gives up a portion of their revenue (royalties). It does not sound any different from a typical publisher's contract.
As with traditional publishing, the only money actually entering the system still comes from readers. The investors money is not new money, it is an investment made in the hope of sharing in revenue from readers, which is just what a publisher does. The difference is that these investors don't provide any services for their cut. They do nothing to help the book become more successful.
As with a publisher, the author may make a little more money if the book is unsuccessful and they never earn out their advance. But if the book is successful, they will make less money because they are sharing their revenue with their investors.
The only think that the investors bring to the table is startup capital, and, like all VCs, they will want a big cut of the action. You use them if you have to. But if you can self-finance, you can make far more if your venture is successful and you don't have to give most of it to the VC.
But with VCs, they do at least bring some management expertise and business connection that can help business growth. I don't see what NFT investors can bring to the table to make a book more successful.
And since the success rate of books is so abysmal, I'm not sure how this looks like a wise investment, once the novelty and the speculative mania surrounding it has worn off.
Yes, in a lot of ways you’re spot on. It’s getting investors to invest in your project instead of publishing houses. The difference is that, unlike with publishing houses, the author retains a percentage ownership. And the value for investors is owning a percentage of the IP, not in trying to earn money from readers. So for example: If you are Reece Witherspoon, you might want to invest in a book because you plan to make a movie out of it, increasing the value of your investment. Ultimately the goal of investors is to raise the value of the investment, not to earn royalties on book sales.
This is all entirely hypothetical though. Not one book has actually been funded this way!
Okay, but isn't the value of the investment based entirely on the ability of the book to generate revenue? Isn't that the basis of the value of any investment? Book sales are only one of the potential revenue streams for a book, of course. Movie rights are another. Merchandizing is a third. But my point is, NFTs don't introduce a new revenue stream for a book. They are simply acting as a contractual mechanism governing how the proceeds of those existing revenue streams get distributed.
Maybe that supports new types of contractual arrangement or new means of distributing risks and rewards. I don't see that personally, but maybe it is the case, and maybe that could be beneficial to writers in some way I don't yet understand. My point is simply that they are not bringing in new money. The are simply changing how the existing money moves around.
Yes true. The idea here is that owning the IP is of value. You could earn money from streams (book reads) at the library, if it gets made into a movie, if there is merchandise, if there is a theme park, if there is fanfiction, etc. The same way the IP generates revenue now. Only the author still owns (hopefully a majority of) it and maintains creative control of their work.
Congrats on the article, Elle. And a clever way to pitch, too (though I can't quite get my head around if there woould be any awkward GDPR implications here in the UK).
I'm in the camp of finding this proposed future rather dystopian. It doesn't help that NFTs and crypto have such terrible reputations at the moment, of course, and that's something that could certainly shift over time as the early adopter get-rich-quick schemes and scams fall away and the blockchain can return to being a useful bit of invisible tech. For now, though, I don't see many benefits for the author, or for most readers.
I'd expect this sort of investment opportunity to attract people interested in money and investment, rather than anyone interested in books/art. But the catch-22 is that books are a terrible way to make money and a terrible investment generally. :) This has been the case for a long time (always?), so I struggle to see how it would be appealing to investors (especially once that "FIRST!" novelty bubble pops).
The notion of giving away partial ownership of ideas and stories feels very strange to me. Won't investors demand sequels, and control, and ROI in general? There's a version of this where creativity and innovation is entirely crushed, as authors all fall into a template of trying to create the most investment-friendly 'stories', while investors then pressure those authors to make more of the same.
There are some basic practical benefits you mention, though, like enabling royalties through the 2nd-hand market. That's an interesting use case that could run silently in the background and doesn't really require the additional layers of financial complication. Blockchain is often presented as an exciting opportunity to Make Loadsa Money $$$, but its in the more mundane-but-useful instances that I think it is most likely to take off.
Ultimately, for me, the assumption that everything will and should be monetised is where I take issue with a lot of NFT, crypto and blockchain concepts. Fanfiction is done out of love for the source material, and I'm not convinced that it needs to be shoehorned into an official monetisation model.
I think what surprises me so far about blockchain tech is that there are so few useful applications of it - or even ideas. Perhaps I'm thinking too small, but it seems its promise should be more evident and more interesting (beyond the early investor Loadsa Money $$$ crowd, that is). Ed Zitron had some interesting thoughts on this point: https://ez.substack.com/p/its-like-the-early-days-of-the-internet
Anyway, I'll shut up now. Always fascinated to see what you're poking at, Elle!
I agree with you in a lot of ways, and won't be putting my own IP up for sale anytime soon. I think if you compare this idea to self-publishing, this idea definitely seems a lot worse. But if you compare it to traditional publishing, it seems better.
For example: you say that "the notion of giving away partial ownership of ideas and stories feels very strange to me." I agree! And yet, so many authors give away FULL ownership of ideas and stories when they enter into a traditional publishing contract.
They do this because they hope the traditional publisher will invest in their book and market it—but it's not an even trade. No startup would take investment and marketing power in exchange for giving up 100% of their company. And yet we give away 100% of our art!
The proposal here then is a middle ground between self-publishing and trad publishing. If a traditional publishing house like Penguin, for instance, wanted to publish my book, I might be willing to take a $20,000 investment from them (not advance) in exchange for them marketing and distributing my book. But I could choose to retain majority ownership of my IP—say 51%—thus still retaining ownership and control over my work.
Many writers will still choose self-publishing. Just like many companies will still choose self-funding. If you can do that and make it work, that is by far the best way to do things. And none of this precludes any artist from writing for the love of it, or from not monetizing their work at all. Those options are always available!
After researching the industry, professionally I think this is really only an alternative to trad publishing, which doesn't seem like a good deal for writers most of the time. Personally, I intend to stick with Substack 😆
You make a good point regarding what the alternative publishing terms are.
Kristine Kathryn Rusch, who was originally traditionally published and has been indie for many many years now has a series of posts about licensing and how licensing in the trad. publishing book space is completely backwards. In the non-book world, IP holders have the power and don't give away the copyrights to their works to licensees for the entire term of the copyright like Trad Pub makes you do. The licensor and licensee work together to both have success. The licenses are time-limited.
Unfortunately, most traditionally published authors have zero ability to flip this dynamic in their contracts because it's the standard "publishing" contract and the publishers won't give in. Hugh Howey was able to crack that nut with Wool and do a print rights-only, limited time distribution deal with Simon & Schuster, but I think the backlash was crazy and no other Big 5 publisher has offered anyone a deal like that recently.
https://kriswrites.com/2019/11/06/business-musings-paradigm-shift-rethinking-the-writing-business-part-16/
That's an interesting bit of extra context. Useful to see how you imagine it slotting into the wider ecosystem. One potential difference is that traditional publishers are built for making books, and the people who work at them tend to love books. I wonder what kind of investors would be attracted to crypto-funded projects, and whether they'd be interested in 'the book' or simply in the potential profit (and does that even matter?).
My guess is that potential investors would view books the same way that publishing houses view books: Is this marketable? Will this make me money?
In either case the motive is the same. Right now there is no such thing as an entity that is “interested in the book, and not interested in the potential profit.” Publishing houses are businesses, they are motivated by profit and they aren’t going to risk their shirts for a niche title.
Commercial books will do well in this ecosystem just as they do in the current one. And we’ll always have to self publish books that are of niche interest! 🤓
I wonder how it would work in terms of volume and spreading risk. Publishers can spread risk by publishing lots of books, and mixing niche and more commercial fare to some degree.
Publishers are also set up to work over a long period: I wonder how it would translate to individual investors who might not have such a large portfolio, or be willing to wait.
Curious! I like that this raises more questions, the more one thinks about it. :)
Totally! Investment groups do that too. Right now investors typically specialize in a certain asset (tech, consumer products,real estate, etc.) but then spread that risk by investing in several assets in that category.
You might have an investor who solely invests in media (books, music, movies) or even books specifically, and thus a particular book is just another asset in the portfolio.
Even if you talk about individual investors - like an angel investor - they usually invest alongside an angel group that specializes in a certain kind of asset. So they would still be part of a diversified fund.
I’m realizing that maybe I should have also explained how investors work today, and how publishing houses work today in my article. Because there seems to be a lot of confusion online as to the “evils” of the former and the “virtues” of the latter. When in my mind it’s kind of the reverse! 😝
This was awesome!! 👏
Really looking forward to reading more of your work.
Well thank you so much!
What an incredible way to pitch- congratulations on a fascinating article and on getting it into a dream publication. You are an inspiration, as always. ✨
Ok, this hit the trifecta for me: a relatable (finally) analogy/explanation of how writers can use the blockchain; a revolutionary pitch tip; a mind-blowing publishing concept in an exceptional article. Well-played, Elle!
Awesome how you landed the Esquire gig - that is some pitch-witchery going on right there lol! :)
Thank you for the analogies! I think that's what's missing. The mainstream self publishing community (in my experience) has negative beliefs about blockchain, and just wants to blow up with booktok. It's really hard to find educators who explain it simply.
I think the mainstream publishing community has negative beliefs about a lot of new things. It’s like we want to hold onto this romantic notion of what literature and books once was (and I totally understand that nostalgia) but I also want to embrace what is. I have found this to be an incredibly rich time for writers, and I think future generations will look back on this moment as a romantic literary time!
Aw, I'm picturing an art history class 100 years from now exploring the creative lives of crypto pioneers :) My partner creates NFTs with collaborators on a project called evrloot. He gets to write, others get to design or market it. It's amazing to see dedicated artists co-owning what could be the birth of a video game, and actually making liveable money from the beginning.
Do you have friends in web3 publishing services you could recommend? Or is this a question to ask 5 years from now?
Sounds interesting. There are several people involved in web3 publishing, per the article. Do you mean to recruit for a project?
Sort of? Rather than platforms like Mirror or consulting companies like Lost Books, I'm wondering if there are people acting like trade publishers in the blockchain space, taking care of minting, airdropping to the right folks, stuff like that.
Fascinating article and outstanding research. If this process takes off, one thing you can guarantee is that secondary markets will form, derivatives contracts, financial instruments, and all other manner of financial engineering will ensue, leading to boom/bust cycles. That's not necessarily a bad thing, but for this model to stick, it would have to survive the initial bust after the inevitable bubble. That's sort of what's happening with the crypto/NFT market right now. If it survives, and learns, it'll persist. But you're seeing a lot of wash out during this crash.
By the way, I have a background in finance and journalism and I'm currently writing a contemporary fiction novel set on Wall Street. If you ever have questions about the stock market, finance, valuation, etc., don't hesitate to reach out. Happy to help anytime.
Keep up the great work!
Yes, it will be interesting to see what happens! And thank you so much for the offer!!! I just may reach out!
Congrats on the Esquire piece!
I had a long conversation with a friend about the blockchain recently and he made the salient point (of which I didn't have a rebuttal) that once you are talking about an asset or something that is offchain, the use case for blockchain falls apart. Like why does the restaurant in NYC that sold NFTs for access to tables need to use the blockchain to facilitate that other than because the blockchain is (was) the hot thing?
Neil Strauss recently created NFTs of one of his books and sold them on Opensea, and then selected one random token holder to get the copyright to the book. But to execute that transfer of rights, they still needed to effectuate the copyright transfer off-chain.
We can see what happens when speculation runs rampant and then an overheated market crashes.
I think the better use case for blockchain and tokens in the book space is creating a community around an author book that go wherever the author is. Substack is great but what happens if you need to port your audience somewhere else? Or what if I wanted to give exclusive access to paid subscribers to something on another platform? Maybe a token recognized by both Substack and that other platform could help facilitate that.
Totally. A lot of these use cases don’t need to live on the blockchain at all. And if they do, they don’t pertain to anything off chain. We’d have to basically have the whole internet on chain for it to actually work like this!
Congratulations on the Esquire article! 🍾 What a clever use of your email list. Newsletter writing pays dividends!
“… a lesson in the power of creating a platform for your work…” This is so true. You not only have to do the hard work of creating a platform, but then you have to figure out creative ways to use it. (As you did with mining your list for the contacts you needed and then reaching out to them.) I wonder how many creators really think about how they can use their platform in new ways to reach their goals?
Great story Elle. I love the potential. Thanks for putting it on our radar. Congratulations on your first Esquire publication. Write on!
Useful reading. We do NFT based startup for authors, publisher readers.
Do you have any articles about list building? I’m really curious how you’ve built your Substack readership.
Yes! Right here: https://ellegriffin.substack.com/p/full-send-summer
I printed this I loved it and want to understand it so much.
Congratulations! It’s funny, I saw the Esquire story first, recognized the byline, and checked my email to find a corresponding copy of the newsletter that I have long enjoyed.
I do hate to say that I think you picked the wrong startups to focus on, and a framing that focuses far too much on investors and far too little on the storytelling and creativity advances that become possible through blockchain technologies.
Personally, I don’t want books to be seen primarily as investment opportunities rather than for their artistic or entertainment value. I don’t want books to become commodities to be pumped and dumped by TikTok influencers. I don’t want to see copyrights fractionalized so that creators incrementally lose control over their own characters, worlds, and visions. I don’t want to see hedge funds crowd true fans and early adopters out of croudfunding opportunities.
These are nightmare scenarios that you present as aspirations, not to mention the legal gray area of representing NFT books or other literary assets as investments. As regulation comes into focus, some of the practices you describe could lead authors into ruinous lawsuits, hefty fines from the SEC, or even jail time.
Speaking as a Web3 author who has already minted tens of thousands of literary NFTs for thousands of readers, I pledge to fight against the future you’ve presented in your article with every ounce of strength I have. Your dystopian funhouse-mirror take slanders many of the hard-working authors who aren’t using bitcoins and ethereum to rack up points in a game.
Yes it’s true. The scope of this article was focused entirely on the premise: what if books were fractionally owned by authors and investors, rather than by publishing houses. Because of that, it’s inherently business focused, and not reader focused.
But, the reason I did that is that I believe that if art was better funded, then it would be better available to us all. It’s already true right now: we are more likely to read a book by a big five publishing house, than to read a self-published title. Simply because better funding allows that title to be better marketed.
Better funded art just means more people have access to it. It doesn’t actually make the work more or less creative, or more or less entertaining, or more or less beautiful.
And TikTok sold 20 million printed books last year. That doesn’t make those books a commodity. It just makes them better read and loved.
I think it depends a lot on the intentions of the funders. Philanthropic or arts-enabling funding is one thing; investors who expect some kind of return is another entirely. The problem with the NFTs and crypto scene at the moment is that it appears to be populated primarily by the latter.
Of course, I'm not saying that it's wrong to expect ROI. I'm not anti-money. :) But I think there's a clearer case for investment in, say, a tech start-up, rather than a new fictional story.
(also, TikTok is an interesting example because those viral boosts happened without requiring NFTs or some kind of complicated investments share model - it was fans being fans, like they've always been, just in a new venue)
Congratulations on the Esquire article. I'll bet that is blowing up your subscribers numbers!
I'm a crypto skeptic myself, and I am guessing that most of this was probably written and researched before the crypto crash. Has the dumpster fire that the crypto market has become over the past few weeks dampened your enthusiasm for this at all?
I do notice and appreciate some notes of caution in your article. I would question the concept that this really represents a new way to monetize a book. It really sounds more like putting the public in the position to act like a publisher. The author collects money from the sale of NFTs (like an advance) and then gives up a portion of their revenue (royalties). It does not sound any different from a typical publisher's contract.
As with traditional publishing, the only money actually entering the system still comes from readers. The investors money is not new money, it is an investment made in the hope of sharing in revenue from readers, which is just what a publisher does. The difference is that these investors don't provide any services for their cut. They do nothing to help the book become more successful.
As with a publisher, the author may make a little more money if the book is unsuccessful and they never earn out their advance. But if the book is successful, they will make less money because they are sharing their revenue with their investors.
The only think that the investors bring to the table is startup capital, and, like all VCs, they will want a big cut of the action. You use them if you have to. But if you can self-finance, you can make far more if your venture is successful and you don't have to give most of it to the VC.
But with VCs, they do at least bring some management expertise and business connection that can help business growth. I don't see what NFT investors can bring to the table to make a book more successful.
And since the success rate of books is so abysmal, I'm not sure how this looks like a wise investment, once the novelty and the speculative mania surrounding it has worn off.
Yes, in a lot of ways you’re spot on. It’s getting investors to invest in your project instead of publishing houses. The difference is that, unlike with publishing houses, the author retains a percentage ownership. And the value for investors is owning a percentage of the IP, not in trying to earn money from readers. So for example: If you are Reece Witherspoon, you might want to invest in a book because you plan to make a movie out of it, increasing the value of your investment. Ultimately the goal of investors is to raise the value of the investment, not to earn royalties on book sales.
This is all entirely hypothetical though. Not one book has actually been funded this way!
Okay, but isn't the value of the investment based entirely on the ability of the book to generate revenue? Isn't that the basis of the value of any investment? Book sales are only one of the potential revenue streams for a book, of course. Movie rights are another. Merchandizing is a third. But my point is, NFTs don't introduce a new revenue stream for a book. They are simply acting as a contractual mechanism governing how the proceeds of those existing revenue streams get distributed.
Maybe that supports new types of contractual arrangement or new means of distributing risks and rewards. I don't see that personally, but maybe it is the case, and maybe that could be beneficial to writers in some way I don't yet understand. My point is simply that they are not bringing in new money. The are simply changing how the existing money moves around.
Yes true. The idea here is that owning the IP is of value. You could earn money from streams (book reads) at the library, if it gets made into a movie, if there is merchandise, if there is a theme park, if there is fanfiction, etc. The same way the IP generates revenue now. Only the author still owns (hopefully a majority of) it and maintains creative control of their work.