Blockchain in publishing: can authors take on Amazon?

September 25, 2018
Chris Wheal

A decade ago, e-commerce giant Amazon launched the Kindle and with it revolutionized the book industry. But Amazon’s dominance has worried many and blockchain could be their saviour.

Open book

Writers could begin to explore alternatives to traditional publishing houses

As customers switched over from brick-and-mortar bookstores to online entities, self-publishing stopped being seen as a dirty word and became a lucrative option for savvy, business-minded authors who wanted to take back control of their work.

Writers could begin to explore alternatives to traditional publishing houses and space was created for smaller players, many of whom specialize in romance and genre novels, to gain a stronger foothold in the industry.

According to AuthorEarnings.com, independent authors are now selling more ebook units than the five biggest publishers on Amazon in the US.

Since 2007, Amazon has continued changing the face of self-publishing with the launch of Kindle Direct Publishing and Kindle Unlimited. Each has tightened its monopoly on digital publishing to the extent there are now over seven million digital books in the Kindle store.

Yet many experts say that there are a host of other disruptions and developments set to hit the publishing industry.  Of them, does blockchain technology have the most potential to knock Amazon off its digital throne?

Amazon sign

The vast majority of independent authors are still dependent on Amazon to earn their income

The Amazon landscape

The Alliance of Independent Authors (ALLi) says that self-publishing has given authors a wealth of opportunities, but the vast majority are still dependent on Amazon to earn their income and this makes them vulnerable.

In a recent whitepaper by ALLi, entitled Authors and the Blockchain: Towards a Creator Centered Business Model, author Sabine Priestly said: “As exciting as it is to be an author today, we are still largely bound and governed by the ultimate digital content provider, Amazon.

“Many authors are finding success with other venues, but the majority find their largest market base within the Amazon walls. As we all know, Amazon takes a hefty piece of our work and has full control over our products’ lives, from changing pricing to removing reviews, or stripping rank entirely.”

In Kindle Unlimited, for example, Amazon sets aside royalty funds every month and these funds are then divvied up between self-published authors based on the success of their writing.

In a recent article in The Atlantic, Mark Coker, the founder and CEO of Smashwords, an ebook distributor for indie authors, said that Kindle Unlimited was a “cancer” that was going to undermine the entire publishing industry.

Though authors may feel like they’re benefiting in the short-term, he said, the Unlimited model is training people to read books for what feels like free. “Amazon is putting the thumb on the scale—although customers will happily pay for books, they give these books out for even cheaper.”

Kindle on top of books

One expert said Kindle Unlimited was a “cancer” that was going to undermine the entire publishing industry.

Publishing expert David Gaughran says some of the effects of Kindle Unlimited have been incredibly positive and careers have been built on it, yet the nature of the compensation system has “attracted a horde of scammers that Amazon has utterly failed at combating”.

In a Forbes editorial, he said: “Amazon refuses to police the Kindle Store in any meaningful way, and takes an extreme light touch approach to regulation. This has led to an explosion of all sorts of nefarious activities like clickfarming, bots, mass-gifting, plagiarism, author impersonation, brand theft, and book stuffing.”

White paper on blockchain publishing

ALLi says that blockchain and other hypertext software systems can prevent some of these issues, including piracy, by providing “indisputable” proof of ownership. The use of smart contracts would also put intellectual property rights back in the hands of authors.

In the white paper, the Alliance said that blockchain technology warrants the attention of publishers and self-publishing authors in particular. It adds: “The way that blockchain reconfigures digital text, books and media, legal agreements, monetization of content, and payment pathways makes it a technological breakthrough for publishing.

“It can be used to maximize the value of the authors’ intellectual property and moral and monetary rights. It could also deliver an author-centred financial model for the first time in publishing history.”

It claims that blockchain could change the publishing industry in three key aspects of business:

  • Storage of value: Data stored in nodes that are time-stamped and verified by the network makes copyright tracking, and the subsequent royalty or commission payments, easier and more accurate.
  • Licensing and rights management: Blockchain allows for a clear and transparent licensing framework with smart contracts reducing complexity and potential disputes. Embedded blockchain mechanisms track the distribution of the content and automatically accumulate credit and disburse payment to the respective rights holders or service providers.
  • Micropayments: With blockchain, cryptocurrency and smart wallets, it is easy to make direct micropayments to authors. Micropayments can be collected in any digital currency added to an author’s wallet. Payment is automatic and payment for value flows directly from consumer to creators and contributors, instead of through a long chain of distribution and sales intermediaries, all taking a cut first.
Words self publish near computer

Only Amazon knows the true scale of the self-publishing industry

Questions of ownership

Since the birth of the internet and the social media revolution, content creators are at risk of their work being shared and republished in a swift timescale with no reference to its owner.

Po.et was set up in 2017 with the aim of transforming the publishing industry by creating an immutable and distributed ledger for creative works. It is designed to record metadata and ownership information for digital creative assets.

Working on the same principle of Proof of Existence, Po.et has created a platform on which written content can be time-stamped using the Bitcoin blockchain and be discoverable along with important metadata.

Max Bronstein, media and strategy lead for Po.et, said that Po.et was designed to help answer “questions of ownership or attribution on the web,” including “who owns the work, who created it and whether or not the usage of the work is authorized.”

Legacy data

One of the issues facing digital authors is that only Amazon knows the true scale of the self-publishing industry as it doesn’t report its ebook sales to any of the major industry sources giving it an advantage over the market.

One source of numbers for online book sales, including for indie ebooks, is the website Author Earnings. It recently estimated that traditional publisher reporting is, “now missing two-thirds of US consumer ebook purchases, and nearly half of all ebook dollars those consumers spend.”

It said that it was these non-traditional sectors are precisely where ebook sales have continued to grow, year after year, and as a result, what was once a small blind spot in the industry’s online-sales numbers now blocks half the view.

As blockchain is based on openness of information, there is no central agency to keep hold of records and they would be available for everyone. This will allow data to be analysed more efficiently.

Amazon bookstore

Non-traditional sectors are precisely where ebook sales have continued to grow

Could we see a blockchain bestseller list?

In April at the 2018 London Book Fair, blockchain publisher Publica went live with its first book – Sukhi Jutla’s Escape The Cubicle: Quit The Job You Hate – on the Google Play Store.

Publica aims to build a platform that uses blockchain as a universal, free system for authors to directly manage how their work is distributed and how they’re compensated for it. With a blockchain book, the middleman is cut and the transaction is direct between author and reader.

The reader gets the text within an app. The text cannot be tampered with or transferred outside of the contract terms coded therein. And the author is paid immediately, with payments divvied up according to the smart contract – for example, the contract might call for 10% of the book’s price to go the author’s publisher.

Payments are made in cryptocurrency directly to the authors “digital wallet.” In the case of Publica, that cryptocurrency is known as a “pebble.” Cryptocurrency can then be traded on a coin exchange.

The future

Blockchain could prove to be a disruptive technology for digital publishing, but as ALLi says: “For disruption to be a positive business force, it must drive new competitive advantage for all. While we don’t yet know the outcome of the changes already ignited, never mind what might be ahead with blockchain and cryptocurrency, what we do know is that the shift in publishing power toward the author continues and is accelerating.”

As technology continues to evolve, the self-publishing industry will not be immune and changes are likely in how books are distributed. An author-centred model could yet challenge the monopolies that ebook retailers currently hold in the market.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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