Instant Settlement Series: The Publishing Industry
The challenges associated with physical work and delayed payments, as discussed in the construction and logistics industries articles, might not be as directly applicable to industries with less physical movement. However, the principles of instant settlement and the removal of intermediaries can still bring efficiency and innovation to various sectors. The advantages of instant settlement, such as reduced transaction fees, faster payment processing, and increased transparency, can positively impact industries beyond the physical realm. Whether it's in the realm of digital services, intellectual property, or other sectors that are already dematerialized, the application of instant settlement principles can streamline transactions and enhance overall efficiency.
Navigating The Written Odyssey
Entering the realm of book publishing, especially for a debut author, is a journey filled with challenges. The primary hurdle involves persuading a publishing house to forge a deal, a daunting task for those yet to establish their reputation in the market. The negotiation landscape is complicated by endless uncertainties, making it difficult to strike a mutually beneficial deal. Even if you try to be fair for both sides it is hard. Most people will prioritize themselves and what they get in an uncertain environment - like figuring out how many books will be sold for a first time author. The dynamics intensify when publishing houses provide editors to authors--an arrangement that frequently sparks friction. Authors, protective of their creative work, may resist alterations, but editors, with seasoned expertise, have to navigate the delicate balance between preserving the author's vision and refining the content.
The complexities extend to the business side, with potential pitfalls surrounding signing bonuses. Questions linger: What if the bonus overshoots and the book underperforms? What if the book succeeds, but the bonus proves inadequate, leading the author to seek alternatives for subsequent works? Marketing poses another challenge, raising dilemmas about investments, audiobook adaptations, navigating royalty payments, and banking fees for small markets and international payments.
Just like in the logistics industry here with royalties, we have the same problem of counterparty risk. In addition to stopping the payments to the authors completely, do you trust the publishers that they are giving the correct sales numbers? Translation decisions add another layer, raising queries about language choices, and fair compensation for translators. What about the illustrators? Each party involved creates more and more friction in the system just because everyone is seeking fair compensation. The payment system does not allow them to focus on what they provide in terms of value, but focuses everyone on mitigating the shortcomings of it. Addressing these multifaceted challenges requires not only innovation but also transparent and adaptive contractual frameworks to foster a more equitable and efficient publishing ecosystem.
The challenges for authors extend beyond the realm of creative content, and the intricacies of the publishing and marketing landscape. While the invention of ebooks has somewhat dismantled barriers, enabling easier self-publishing, the journey is not without hurdles. Authors opting for self-publishing must navigate the complexities of setting up accounts and managing distribution before reaching the point of uploading their work. Once published, the dual role of author and marketer emerges, demanding not only literary prowess but also strategic promotional efforts to capture the audience's attention and drive sales. The demanding nature of marketing leaves authors with limited time for their core competency - writing - which hinders the development of subsequent books that they would like to write.
Lighting Up Publishing: From Solo Authors to Collaborative Ventures, Unleashing the Potential of Instant Split Payments
Now that this is the third industry that we are looking into, we know that delayed payments are the problem and that they are tied to time and not actual work - You have to write the book till this date or else We will gather all payments and royalties will be paid later. Since we know now that the Lightning Network can fix this lets dig into the solution and what it may look like.
If you're a first-time author and choose to publish your book on your self-made app, you can instantly receive 100% of the income for each purchase. By utilizing a non-custodial solution like Breez, where no one holds money for others, you avoid the complexities associated with traditional payment methods. This setup eliminates the need for currency exchanges, providing a seamless global payment network directly connected to your app. The benefits go beyond mere currency considerations, freeing buyers from the hassle of exchange rate fees and relieving them of the complexities associated with navigating diverse regulations and processes across various countries. Who knows what regulations you have to deal with to be able to operate with the Iranian Rial just to sell a simple book? With a non-custodial solution on the Lightning Network, you get to avoid all that.
That is a big benefit for one-man shows in the book industry, but lets take it a step further. In this scenario, where the relationship involves only the author and a publisher, the process becomes streamlined without the need for intricate negotiations, personal data sharing, or complex contracts with various clauses. With the instant settlement, there's no need for advance payments, both the author and publisher receive a percentage from each sale instantly when the purchase is made. The publisher, responsible for uploading and promoting the book on their website, and the author are now aligned in the common goal of selling more books. The only task left is to determine the fair percentage splits between the author and the publisher, fostering a collaborative and efficient partnership. Now the word royalties will have a completely new meaning.
Okay, that is between two entities, but we are not going to stop there. Now that the book is published the book can be translated to other languages. In that case, the complexity does not increase a lot. They just have to determine the percentage share split between the publisher, author, and translator for each sale of the translated version. Upon purchase of the translated book, each payment will be split three ways. Meanwhile, the original language version undergoes a two-way split, with the translator excluded from this split since they didn't contribute to that version. This ensures that the relevant individuals receive sats exclusively for their specific contributions. There might be a need for a separate publisher for the translated language, leading to a split between the author, translator, and second publisher. For the original language, the split occurs between the author and the first publisher. Theoretically, the current system goes through a similar structure for the payments, but I am reminding you here that only the instant split settlement makes that plan match the reality in practice. The moment that any entity starts holding funds for someone else even for a little, then the problems go up exponentially. This is why Breez is committed to preserving the peer-to-peer nature of Bitcoin in lightning payments.
Instant Splits For Narrators, Producers, And All Contributors - A Symphony Of Fair Compensation
We are not done yet with the benefits. Now that we have a path for each language, what will it look like for audiobooks? In that case, you just add one more split based on the agreement between the parties. If you create an audiobook in the original language then the split will be between Author, Publisher, and Audiobook creator. The creation of an audiobook is a project on its own of casting, recording, post-production, and distribution. That has multiple people involved so the split for the audiobook payment in reality may look like this:
Author, Publisher, Producer, Recording engineer, Narrator, Editing/mastering engineer.
In this dynamic model, contributors may wear multiple "hats" within a project, allowing them to assume various roles and, consequently, earn a share for each responsibility they undertake. For instance, an Author might take on the roles of both Producer and Narrator, performing additional work beyond their original scope. In such cases, the Author receives a percentage for each distinct role. However, should the Author choose not to take on these additional roles, someone else can assume those responsibilities and reap the corresponding benefits. This structure ensures alignment, with compensation tied directly to individual contributions at the time of each book sale, eliminating compensation for time or speculation based on future sales.
Unlike the other two industries we explored in construction here and logistics here, the timing of payment in the publishing industry differs. In the preceding sectors, individuals receive compensation instantly upon completing their respective tasks. However, in the realm of authors, payment is not immediate for the act of writing; it occurs when someone is willing to pay the price for the published work. This distinction highlights a fundamental principle: everyone is remunerated when they deliver value to someone else who is willing to pay. Whether delivering a package to the correct address or constructing a house for someone else to inhabit, optimizing the process with the client in mind becomes paramount. Therefore, receiving sats is contingent on providing intrinsic value to others, aligning the industry with similar principles observed in construction and logistics. If you build or deliver something that people do not want, that means you did not provide value.
Instant Influence: From Metrics To Value - A Paradigm Shift In Compensation For Promotions
Now lets take it even a step further. This will not be the only industry where the influencers can change their business model, but I will use it as an example to explain the change that they will experience in their service. Currently, the influencers get paid for views or mentions depending on whether the medium is audio or video. Their value, as perceived by those paying them, hinges on metrics such as subscriber counts, views, and downloads. But for the person that is paying, is it going to matter if the influencer talks about a book but then it does not result in sales of the book? Or again what happens if someone mentions it but the sales are extraordinary, then the influencer has to receive a more fair compensation. Connecting payments directly to actual value, rather than relying on derivative indicators, ensures influencers receive fair compensation in line with their impact on sales.
Well, the instant settlement fixes that. Authors can now decide on a fixed percentage for influencers per sale, allowing anyone to become an influencer without the need for a massive following. Even a small blog with a modest readership of less than fifty people can result in direct, instant compensation for sales generated. This eliminates barriers to entry for the influencers to have a following and aligns incentives for authors seeking broader promotion. There is a massive friction in the influencer market currently because with poor measuring tools you do not want the money to be wasted on promotion that does not work. This future system is not going to waste a single sat for promotion because it is not paying for a promotion. You are negotiating a commission on every sale which the actual buyer pays - increasing sales is the intent of the authors reaching out to influencers anyway.
Now that we have an influencer promoting a book the UX (user experience) is going to be completely different. Right now to promote anything as an influencer you receive a code that you have to ask for, from the publisher in this case. Then your viewers/listeners have to go to the website and fill in all the information about themselves. Then they have to enter their card information which has to be secured from the website somehow. Then they enter the promo code and receive the ebook that they wanted. On the other side, the publisher has to hope he does not get a chargeback for whatever reason in the next 30 days. The instant settlement UX will be:
- Influencers enter a lightning address where they want to receive their commissions from for every sale.
- Then they display a link or a QR code that will be a lightning invoice for the specific book.
- The buyer enters an email where they want the ebook to be sent.
The instant split payment is sent and everyone including the influencer receives their share of it. This way even influencers might realize that the likes, views and comments are not the most important thing and focus on providing real value for their viewers. This not only streamlines the process but may also alleviate the impact of negative comments and dislikes for influencers. Because their income is not tied to the likes that means it will no longer be the most important thing. They will focus on promoting quality products that sell a lot so they get a piece of those sales and the likes will be secondary.
The transformation in influencer behavior triggered by instant settlement not only disrupts their traditional approaches but sparks competition among publishers and influencers alike. Authors may opt for a model where they focus solely on writing, leveraging influencers to handle promotion without dealing with traditional editors. This introduces a more diverse competitive landscape, where publishing houses will compete with content creators from different industries who passionately recommend authors they love. While these changes benefit readers, authors, and participants, those resistant to competition may be the only ones disliking this evolving landscape.
Indeed, envisioning the transformative power of instant payments, there's an opportunity for an innovator to replicate what Amazon did to bookstores. By adopting a model built on advanced technology and leveraging the advantages of instant settlements, this individual can start with books and subsequently explore avenues for expansion. The potential for such a disruptive force lies not only in reshaping the publishing landscape but also in inspiring new possibilities across diverse industries.
Now lets go and publish that app.
This is a guest post by Ivan Makedonski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Read more: https://bitcoinmagazine.com/technical/instant-settlement-series-the-publishing-industry
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