Discover more from Economics Design Newsletter
Tokenising Publishing and Distribution Rights (NFT)
This book is tokenised.
No, this is not one of the “tokenised collectable” books. Rather, I am tokenising the publishing and distribution rights. This is an experiment of tokenising rights like intellectual property rights, publishing rights, and licensing rights.
Tokenisation is the way to represent the value of something. As we discussed mostly in this book, we are usually tokenising the economic value of an ecosystem. That is a huge topic on its own. You can probably guess that after going through so many chapters. And, there are other values that can be tokenised. This is what I am experimenting with.
The value that the token represents is the right to publish and distribute this book in various geographies. I chose NFT because there could be a possibility of embedding some form of token rules (e.g. maximum number of books sold) into the token. That means each token could be unique on its own.
I believe very strongly in only tokenising something if the token version of it adds real value. In the publishing world, you have two ways to get a book published. Either going to a publishing house or self-publishing.
The publishing house route is great since they specialise in such business. However, they also have to take on the risk and many are not willing to do so. This is especially true for new areas of specialisation. I know this because I spent two years speaking to publishers and failing miserably. They either find it too technical, too niche, too complicated or they are simply uninterested. Their main fear is understanding the market demand for such books.
That brings us to the second option, self-publishing. That means doing everything on your own. While it is good to give you full control of how the book will be, you lose out on having the specialised skillset to bring the book to new heights. For example, campaign strategies, PR network, and greater distribution reach.
Thus, I saw tokenising publishing rights as a solution. I can help a publishing house get a better grasp on the market demand with actual market demand and for self-publishers (me) to tap into their specialised skillset and network.
$EDBK, that means Economics Design Book. A very innovative name, I know.
The general idea is to:
Limit publishing rights of physical books to specific geographical regions
Price publishing rights in accordance to the perceived risks
Use the token to account for distribution of additional income
The main fear by publishing houses is to know the market demand for the book. Thus, $EDBK signals the demand to decrease information asymmetry. Since $EDBK is an NFT that represents the right to resell and publish the book, the only difference is in the details. For example, how long they have the rights for, the geographical area and quantity of books.
The price of the $EDBK is determined by a bonding curve. The earlier a publisher purchases the token, the cheaper it is. That means, they take on the risk to be the first mover and in return, pay a cheaper fee as a publishing house. As market demand for the book increases, this encourages other publishers to get the rights. Now, the publishers are certain about the market demand of the book and there is less risk to publish this book. Thus, they pay a higher fee to buy the rights to publish the same book.
The publisher pays royalties to the author, me, and keeps the mark up. Part of the royalties will be added to the pool and distributed to the $EDBK holders proportionally, including any other sales by the self-publisher (me). These rules and agreements will all be embedded into the bonding curve, via a smart contract.
Call out box: So, if you are a book distributor keen on participating in this experiment, please reach out to firstname.lastname@example.org! Or if you are keen on distributing the books, let me know too