Leveraging Blockchain in the Publishing Industry: Some Useful Applications of a Nascent Technology

Imagine explaining the internet to someone in 1990. You could describe how there are virtual locations you can visit, called “websites” and that those sites can be virtually browsed using a window located on your computer screen. You can read a magazine through your computer but instead of having the articles printed on paper, you would transmit the information to your computer via data packets through a series of tubes. Also, through the same series of tubes, you can also pay to stay in a stranger’s home for a few days, and right after that you can directly contact any celebrity or politician with a 120 character messaging platform. They would have a lot of questions, no doubt. In fact, it would be downright bewildering. The internet before conventional web browsers with attractive user interfaces is a confusing premise. Why on earth would we want to transmit digital packets through tubes to our houses? The problem with explaining the internet to someone pre-internet is that at the time we could not have predicted all the possible ways to use it, and the ways that we continue to reinvent the way we use it. Blockchain technology presents similar levels of possibility. The majority of blockchain in practise currently is exploring the ways that it can revolutionize financial and data management. However there are three major implications for blockchain on the publishing industry: digital rights management, royalty distribution and e-book ownership and alienation.

 

Here is a basic breakdown of how blockchain works: At its most basic level, blockchain technology uses ledgers to track transactions. Blockchain is used most frequently as a system for tracking crypto-currency exchanges. Bitcoin is the most well known block-chain based digital currency (aka crypto-currency).  However, blockchain is not limited to crypto-currency and can be applied to numerous different scenarios. A simplified idea of a blockchain ledger is like a Google sheet: people who have access to the sheet can enter data simultaneously into an existing table. The digital ledger of a blockchain is no different, except instead of manual entry, the ledger is updated automatically. Data written to the ledger is referred to as a “transaction.” For this paper, and for blockchain in general, the term “transaction” is not limited to the financial definition of a monetary exchange, it means any exchange or interaction that occurs digitally that is recorded. Each transaction starts the process of tracking by creating a “block,” or a digital record. This block is then added to the “chain” of transactions which reads like a ledger when altogether. If a digital artifact, let’s say a Bitcoin, has any transaction at all: if it is used to purchase something, if it is exchanged for cash, if it moves from one digital wallet to another, each interaction is recorded in the ledger. This ledger in turn is duplicated and distributed and stored across possibly millions of computers (decentralized storage), creating a unique record with a unique history.[1] This method of storage is called “peer-to-peer” storage. If you have ever used a torrenting service, you have used peer-to-peer storage. There are five major principles of blockchain:

 

  1. Distributed database: the ledger is replicated across identical databases and each participant in a blockchain has access to the entire database and no single participant controls the flow of data, or the content of data. When data changes are entered in one copy of the ledger, all other copies are simultaneously updated.
  2. Peer-to-peer transmission: In more traditional data-hosting methods, there is a client computer and a server that hosts the data. The client computer will access the server, view, modify or download the data it needs and then can cut connection. If the server cannot access the network then the data becomes inaccessible. Peer-to-peer means that there is no “one” server hosting data. Client computers act both as a server (hosting data) and as a client (accessing data). Because there are many hosting clients, the data is always accessible, even if another data hosting client disconnects from the internet. Hosting clients are referred to as ‘nodes’.
  3. Transparency with Pseudonymity: transactions occur between blockchain addresses (a unique alphanumeric address that identifies them), and those alphanumeric addresses are visible to anyone who has access to the blockchain system.
  4. Irreversibility of Records: Once a transaction is entered, it cannot be changed due to block-chain algorithms that are built into the technology to prevent tampering.
  5. Computational Logic: Since all transactions occur digitally, you can set up rules and algorithms that can automatically trigger transactions between nodes. A simplified rule could be: “if X event occurs, then Y event should also occur, resulting in Z entry.” [2]

 

So, we now have the possibility to track any data in ledgers, which are kept automatically updated, and which are decentralized, meaning no one person can control the data themselves. The data is also kept secure by the technology itself, which guarantees no tampering. You essentially have a bunch of highly secure and fraud-resistant decentralized databases, but how does this relate to the publishing industry?

 

The first example of blockchain usage in the publishing industry is royalty distribution. Right now, we have intermediary services that manage royalties for e-books. An author publishes with a publishing house, and entrusts that their financial database will accurately reflect the royalties that need to be paid out to them. Amazon hosts the book on their site, and by hosting the book on their site they take a cut from the profits. The publisher trusts that Amazon is accurately reporting the number of e-books sold after taking a cut, which in turn will reflect how the publisher manually calculates the royalties to pay out. Each one of these transactions is privately assessed, calculated, and possibly miscalculated. How can the author trust that the royalties are reflecting the actual number of e-books sold? Having a blockchain system could address this issue. The author presents the publisher with a manuscript, and after establishing royalty rates, those financial calculations (rules) can be set up in the blockchain system. Once ready to ship, the author is given access to the ledger, and Amazon’s systems automatically report back to the ledger when a book has been purchased. The author, publisher, and Amazon can all access the data on how many books have been purchased and can automatically calculate the royalties the author can expect. This cuts out ambiguity and also relieves the need for an accountant, beyond the initial ledger set-up and calculation.

 

This particular scenario relies on Amazon’s co-operation. However, in a world where you can automate digital transactions, you could potentially cut out the middle-man. The publishing industry could create its own e-book distribution platform, which is automatically managed and calculated with a large block-chain eco-system. Essentially a browsable website that calculates its own financial records, and that can send profits directly back to the authors and publishers, already divided up.[3] Ameer Rosic co-founder of blockgeeks.com writes: “Instead of Amazon taking a cut, and the credit card company earning money on the sale, the books would circulate in encoded form and a successful blockchain transaction would transfer money to the author and unlock the book. Transfer ALL the money to the author, not just meager royalties.”[4] Again, blockchain presents possibilities similar to the internet, it is not an answer in and of itself to problems, but it offers a platform that revolutionizes the way we can manage data and financial transactions. It also has very low overhead: it is free to operate (no server storage costs), secure thanks to the cryptography methods it uses (no security departments to pay), and it offers the opportunity to automate data entry (low database management costs).

 

Blockchain also has helpful implications for digital rights management. Tracking down ownership and permission costs, as well as locating the appropriate person to speak to about licensing content can be a time consuming and difficult task.[5] Through a blockchain system for managing rights each book could have an associated blockchain ledger, which contains meta-data which is easily accessible. The immediate advantage of this is that it automates rights information management and helps keep track of contractual monies owed. PageMajik, a publishing innovation technology company, is leveraging block-chain currently for its rights management technology RightsTracker:

 

“All information pertaining to rights and permissions can be stored and tracked using PageMajik’s permission log. The data fields that need to be filled in can be customized for each book or journal, and once filled in, the information is embedded in the corresponding image as well. Appropriate users will be notified when permissions are about to expire or when the limit is exceeded.”[6]

 

Blockchain can hide behind any user interface (UI), which could potentially make it an easy to access database of information, but it would need a high overhead cost of initial programming by blockchain specialists to set up the system(s) that could be leveraged by the publishing sector. There are already several countries, including the Republic of Georgia, Sweden and Honduras that have been experimenting with block-chain based land registries. Rights management for copyrighted books could follow the same logic.[7]

 

The last major application of blockchain which this paper will cover is e-book acquiring and alienation. Alienation refers to the action of transferring ownership of a good that has been purchased. Blockchain presents the possibility of having a unique digital record for each e-book, with built-in DRM (digital rights management) the e-book could not be copied, but it could be re-gifted or sold, removing the digital entry from your e-book library for good and adopted by the new owner into their own e-book library. Because blockchain presents the opportunity for exhaustive records including original purchase date, ownership and transfer of ownership, it could revolutionize the way we manage digital purchases of copyrighted works.

 

Blockchain presents possibilities for data organization and tracking which bypasses the usage of larger e-book outlets like Amazon for tracking retail purchasing, but there remains the problem that organizations in general are a long way out from using blockchain technology because of the technological hurdles: you need not one programmer working for your publisher, but rather you need a consensus of programmers working together towards a common cause, to organize blockchain systems that work together in concert. Another challenge, particularly around rights management, is that publishers would have to contribute to the blockchain system by producing digitally available data on contracts, previous sales, and existing territories, as well as working with existing scholars on rights to create a digital algorithm that would work appropriately.

 

These challenges may seem insurmountable, but in retrospect it likely felt like a huge task for the original architects of the internet as well: I am sure people asked “how on earth are you going to translate packets of data into something the average user can usefully interpret?” In this way it is helpful to think of blockchain as a platform, rather than a digital framework. The technology itself provides the opportunity to self-regulate, automatically calculate and record transactions or interactions, and if strategically deployed it would require little to no maintenance to keep the systems running. A key concept that blockchain presents is the concept of ‘decentralization,’ which has political implications as much as it has technological implications: “It means transferring control over complex systems from constrained human minds and institutions to high-bandwidth, self-regulating interactions. It means eliminating gatekeepers, enabling more widespread access to systems and more efficient, meritocratic incentives within them.” In short, it has the possibility of removing the digital distributor middle-man, like Amazon, because the job of tracking purchases and distribution can be automated and openly auditable.[8]

 

 

 

 

 

 

 

 

 

 

Bibliography

Attaran, Mohsen, and Angappa Gunasekaran. “Blockchain Principles, Qualities, and Business Applications.” In Applications of Blockchain Technology in Business: Challenges and Opportunities, edited by Mohsen Attaran and Angappa Gunasekaran, 13–20. SpringerBriefs in Operations Management. Cham: Springer International Publishing, 2019. https://doi.org/10.1007/978-3-030-27798-7_3.

BookNet Canada. “Can Blockchain Help Publishers Better Manage Rights?” Accessed October 27, 2019. https://www.booknetcanada.ca/blog/2017/12/11/can-blockchain-help-publishers-better-manage-rights.

Giri, Ashok. “Blockchain and the Future of Publishing.” Medium, June 19, 2018. https://medium.com/pagemajik/blockchain-and-the-future-of-publishing-65086b412d37.

“PageMajik | Plugins – PageMajik.” Accessed October 28, 2019. https://www.pagemajik.com/plugins#rightracker.

Schneider, Nathan. “Decentralization: An Incomplete Ambition.” Journal of Cultural Economy 12, no. 4 (July 4, 2019): 265–85. https://doi.org/10.1080/17530350.2019.1589553.

Welpe, Andre Dutra, Andranik Tumasjan, and Isabell M. “Blockchain Is Changing How Media and Entertainment Companies Compete.” MIT Sloan Management Review (blog). Accessed October 27, 2019. https://sloanreview.mit.edu/article/blockchain-is-changing-how-media-and-entertainment-companies-compete/.

“What Is Blockchain Technology? A Step-by-Step Guide For Beginners.” Accessed October 28, 2019. https://blockgeeks.com/guides/what-is-blockchain-technology/.

 

[1] Attaran and Gunasekaran, “Blockchain Principles, Qualities, and Business Applications.”

[2] Attaran and Gunasekaran, “Blockchain Principles, Qualities, and Business Applications.”

[3] “What Is Blockchain Technology? A Step-by-Step Guide For Beginners.”

[4] “What Is Blockchain Technology?”

[5] “Blockchain and the Future of Publishing – PageMajik – Medium.”

[6] “PageMajik | Plugins – PageMajik.”

[7] Attaran and Gunasekaran, “Blockchain Principles, Qualities, and Business Applications.”

[8] Schneider, “Decentralization.”

 

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