Blockchain technology is a hot topic these days—so much so that I’ve heard several publishing industry people say they are tired of hearing about it. My message to those people is to brace themselves, because they ain’t heard nothing yet.
Perhaps not since the advent of the internet itself has a single technology buzzword captured the imagination of so many. Book publishing is no exception: a growing number of startup companies, people in existing companies, and investors are touting the promise of blockchain technology for publishing. Meanwhile, skeptics say that blockchain cannot possibly live up to all the hype.
Unlike other industries, such as financial services or even music, blockchain technology is at the very beginning of whatever life cycle it may have in book publishing. At this point, it’s worth understanding what blockchains are and the possible applications that the technology might have for books. A blockchain is simply a type of distributed database—a ledger of transactions that isn’t owned by any single entity. Instead, every entity that participates in a blockchain has a copy of it that is guaranteed to be complete and up to date at any given time. When someone wants to add a piece of data to a blockchain, other participating entities perform complex mathematical calculations to validate the data; once a sufficient number of entities have agreed on its validity, the data is added to everyone’s copy of the blockchain.
The best-known blockchain today is the blockchain for the Bitcoin cryptocurrency; it keeps track of all Bitcoin transactions around the world. But that’s only one blockchain. Just as there can be arbitrarily many databases, there can be arbitrarily many blockchains.
Right now, three very different types of applications for blockchain technology are subjects of discussions and experimentation in publishing. One is rights and royalties tracking. This can be a difficult and complex task for publishers. The basic idea is that, instead of each publisher (or agent or content distributor) maintaining its own big, hairy rights and royalty management system, everyone would deposit transactions on a common blockchain—and those who want to get paid or grant permission simply need to look on the blockchain for transactions to process. This would save everyone money, increase certainty, and enable more of the low-value rights transactions that, currently, many publishers consider to be more trouble than they are worth.
The second application is consumer e-book distribution. Right now, when you buy an e-book from a retailer, you aren’t actually purchasing it; you’re getting a file along with certain rights described in a license agreement. Those don’t include many things that you would be able to do with a print book, such as resell it, lend it, or give it away. Blockchain technology enables e-book buyers and sellers to use a common permanent record of transactions that establishes “ownership” of e-book files: if I sell an e-book, the blockchain reflects that the buyer is the owner and I’m not anymore. And such a scheme can exist independently of individual retailers, so that if I sell an e-book that I bought from one retailer, the buyer should be able to read it using another retailer’s app or device—and the ability to read the book persists beyond any retailer’s lifespan. Authors can also use this solution to sell their writings directly to consumers and have a permanent, irrefutable record of authorship.
The final application that’s currently being discussed is piracy track-and-trace for print books. This is a variation on existing anticounterfeiting technologies in pharmaceuticals, jewelry, and other industries. It involves embedding unique identifiers into legitimate products, entering those identifiers into a database, and scanning products of that type to ensure that they have legitimate identifiers. As with rights and royalty processing, blockchain technology makes it possible to do this with a common distributed database instead of a centralized database that a single entity has to maintain. And print-on-demand technology has gotten cheap and efficient enough that a unique identifier (number, QR code, or barcode) can be printed in each copy of a given book during manufacturing.
Which of these three applications of blockchain technology in publishing will succeed, and when? We don’t know yet. Each of them has practical limitations, such as the volume of transactions that a blockchain can process and the unprecedented degree of cross-industry cooperation necessary to adopt solutions. But with so much talent, money, and (yes) hype flooding the space, we’re bound to find out what problems are solvable—and worth solving—over the next few years.
One thing is for sure: blockchain technology is not just the latest techno-buzzword that everyone can safely ignore until it goes away. Blockchain is here to stay, so the publishing industry might as well see what it can do.
Bill Rosenblatt is president of GiantSteps Media Technology Strategies and a founding partner of Publishing Technology Partners.