How Social Tokens Can Transform Book Publishing

Forefront Journal publishes essays from the frontier of web3 social and tokenized communities. This is a guest essay from Allen Taylor, author of Cryptocracy.

Forefront Journal publishes essays from the frontier of web3 social and tokenized communities. This is a guest essay from Allen Taylor, author of Cryptocracy.

It's been 15 years since Amazon paved a path for independent book authors with the introduction of Kindle Direct Publishing (KDP). While the service has been a huge boon to self-publishing and independent book publishing overall, KDP is behind the eight ball when it comes to providing tools for collaboration. One of its downsides is no provision for royalty splitting between co-authors and other collaborators.

Currently, collaborating authors must trust each other when co-authoring a book, and if an author shares royalties with an illustrator as is often the case with children's books, Amazon has no technology to make that simple and trustless. As a result, other services have arisen to fill the gap.

PublishDrive introduced a royalty distribution service in 2014-- but it's not cheap. The starting package, for $16.99 per month, only distributes royalties for up to two books. The top-tier membership costs $99.99 per month.

By contrast, Draft2Digital (D2D) takes a percentage of royalties before distributing sales revenue to authors. That translates into fewer royalties for authors.

In the absence of fair and equitable economics for book publishing collaborations, social tokens must rise to the occasion.

By design, social tokens are collaborative tools. That's what makes them attractive for solving the royalty-split problem for book publishing collaborators. Specifically, social tokens can deliver five core benefits for independent authors and publishers.

They offer a utilitarian solution to a real-world problem. One example is seamless and trustless royalty splitting. They may be issued by an individual author or an organization such as a publishing company or DAO. PageDAO was launched with this, and more, in mind.

They are designed for communities that value collaboration. Even individual authors can use social tokens to foster communities around their books and other content products while using the tokens to incentivize fans to become collaborators.

They must be organic to the community they serve. They need not be traded on public exchanges, but they may be transferable. They may also be soulbound and non-transferable, but having community-driven utility is a must.

They are managed by the community with no hierarchical organization. Individual authors need not fear loss of control over their literary creations. After all, it is the token, not the author's work, that is managed by the community. That said, an author can use the social token as a tool to reward community members and elevate the status of fan to collaborator through an incentivized reward system.

The value of the token is based on these core characteristics more than on price. For many fans, the value of the token lies in the ability to gain direct access to and collaborate with their favorite authors, an unprecedented benefit for most readers.

Until now, innovative indie authors and book publishers have resorted to publishing books as non-fungible tokens (NFTs). The downside to this is that the NFT is more often the cover art for the book while the book content is "unlockable." In PageDAO's case, books can be read for free while the token that represents the book is more of a speculative asset. In both cases, the value of the content is overshadowed by the value of the token, if there is any.

A healthy alternative for book authors and publishers is the issuance of a social token.

Social tokens generally fall into one of several categories: creator tokens, personal tokens, brand tokens, or community tokens. Each of these can be used to transform book publishing projects into community collaboration efforts. Individual authors, for example, can reward fans for book purchases, providing feedback on a manuscript before it is published, social media activity related to a book, or for co-creating content, characters, or backstories. A publishing company may pay royalties in the brand's token or reward authors for marketing activity related to the company's entire book catalog. Author collaborators might use social tokens to split royalties from book sales and include illustrators, book cover artists, indexers, and others involved in the book publishing process. Tokens could also be used to pay for flat fee services such as book formatting and cover creation.

The following three case studies illustrate how social tokens can be used by authors, collaborators, and publishers in any book publishing enterprise.

Case Study #1: Single-Author Fan Base

As we say in the south, there's more than one way to shoe a horse. The same can be said for building a fan base. Social tokens turn an otherwise pseudo-anonymous relationship into a more rewarding community-oriented enterprise.

Joe Pulizzi is an international bestselling author. Using principles he outlined in his book Content Inc., published in 2015, he built an online publication and community called The Tilt where he educates content producers and trains them to become content entrepreneurs. Simply by signing up for the The Tilt newsletter, prospects earn his creator coin $TILT.

When $TILT launched in March 2021 it was worth 34 cents in U.S. currency. At its peak in November 2021, $TILT held a value of $54.227. It has since fallen to $6.919, but the price isn't the best part of Pulizzi's proposition.

Members of The Tilt community who own the creator coin can earn additional $TILT by referring new members, access an exclusive Discord channel, receive discounts on training and educational courses as well as merchandise, and other benefits depending on how much $TILT they hold. The Tilt will also pay authors $250 USD in $TILT for articles accepted for publication.

The Tilt is just one example of how an individual author can turn a concept into a community and business enterprise. Here are a few other ways authors can use social tokens to create a community around their content.

Issue tokens for proof of purchase. Authors have no way of knowing when a reader buys a book at Amazon or another bookstore---online or offline. A call to action at the end of a book can incentivize readers to join the author's email list and/or receive tokens with proof of purchase of her latest release.

Reward fans for social sharing. An author's most ardent fans will be happy to share content related to the author's books in exchange for tokens.

Incentivize launch team members. Launch teams are valuable in providing early momentum for a book's success. Tokens can motivate launch team members to be more active in helping the author promote new releases and push a book to bestseller status.

Offer exclusive content for token holders. Just as Pulizzi uses $TILT to reward token holders with merchandise discounts and an exclusive Discord channel, authors can offer gated content to token holders either on their own website or through third-party services like Patreon and Substack.

Allow readers to collaborate on projects. Authors can encourage and motivate fans with opportunities to help choose the next project, suggest book titles, play a part in character creation and world building, and collaborate on elements of storytelling or assist with research. What reader wouldn't want to be involved in helping their favorite author craft his next bestseller?

As a bonus, if an author's social token manages to increase in value due to an increase in the author's reputation among readers, fans who hold social tokens can profit from their participation in the author's community.

Case Study #2: Royalty Splits for Collaborating Authors

Collaborating authors currently have no easy way to split royalties that is both equitable and trustless. Social tokens can ease the tension in co-author and author-illustrator relationships, but the mechanics can be tricky.

Currently, when authors collaborate on KDP, one author serves as account holder while the other author must trust the account holder to share royalties. By setting up a DAO or DBA, collaborators can share a bank account in that entity's name and convert royalties into tokens. While that may seem clunky, there is currently no other mechanism for making royalty splits simple, and it would be much less expensive than current alternatives like PublishDrive.

BookCoin is a new service that has yet to be tested, but is offering authors several ways to tokenize books, including individual chapters. This would benefit authors involved in multi-author anthologies and could lead to new publishing models.

Bottom line: The normal cost of doing business for authors should not be prohibitive when collaborating. It should be rewarding for all collaborators.

Case Study #3: Indie Publishers Rewarding Authors and Readers

Publishers can use social tokens to reward both authors and readers. International publishers can make payments easier by paying authors in social tokens rather than dealing with cross-border exchange rates. This would make payments faster and cross-border payments simpler.

Social tokens can also give rise to new publishing models. Two current examples follow.

Jenkins Yacht Valet is a publishing initiative working with bestselling author Neil Strauss on a book titled Bored and Dangerous, to be published as an NFT. Minters can burn the book to earn passage into a fictional world called Azurbala or stake the book for voting rights in an exclusive creator club called Hawthorn. Community members purchased NFTs and helped create the characters for Strauss's book.

Actor Rob McElhenney and writer Keyonna Taylor have partnered in a venture called Adimverse. The pair are inviting other writers to collaboratively create characters with the right to own and govern those characters in future stories.

These applications go beyond book publishing, but similar initiatives can be employed for the book publishing process.

Book readers can be rewarded through social tokens allowing them to purchase books, NFT avatars based on characters in a book, and for helping to promote a book publisher's catalog.

While there are many upsides, there are downsides to using social tokens for book publishing. An author or publisher could lose control of artistic direction if the community of token holders votes against an author's vision for a character or story. There's also the financial risk of a token losing value if a community bails on the author or publisher. It could also create sticky copyright situations that lead to collaborator tension. One collaborative effort among YA authors went sour when criticism mounted over the project, in part due to the audience not understanding the nature of NFTs and partly due to the project's targeting of minors. That illustrates that authors and publishers must know their market well enough to ensure that social tokens will be acceptable to that audience.

Social tokens transfer power away from platforms like Amazon and Draft2Digital and put it into the hands of creators and readers. They also create a more intimate relationship between author and reader. They can turn the long-standing practice of book publishing into a community enterprise that rewards authors, readers, and publishers alike.