With so many technological advances in recent years, can publishing keep up? Michael Bhaskar and I discuss AI tools for writing, blockchain and NFTs, digital narration, and impacts on intellectual property rights licensing in this wide-ranging interview.
Today's show is sponsored by ProWritingAid, writing and editing software that goes way beyond just grammar and typo checking. With its detailed reports on how to improve your writing and integration with Scrivener, ProWritingAid will help you improve your book before you send it to an editor, agent, or publisher. Check it out for free or get 25% off the premium edition at www.ProWritingAid.com/joanna
Michael Bhaskar is a writer, researcher, and co-founder of publishing company, Canelo. His latest book is Human Frontiers: The Future of Big Ideas in an Age of Small Thinking.
You can listen above or on your favorite podcast app or read the notes and links below. Here are the highlights and the full transcript is below.
- How much does publishing embrace technology?
- Why a long-term view is important for both indie and traditional publishing worlds
- Implications of Natural Language Generation tools like GPT-3
- The need for both creative play in terms of attitude to AI creation but also ethical guidelines around statements of use. [See the Alliance of Independent Ethical Guidelines.]
- Thoughts on AI narration for audiobooks
- Blockchain and NFTs
- Intellectual property rights and new technological possibilities
You can find Michael Bhaskar at MichaelBhaskar.com and on Twitter @michaelbhaskar.
Want more futurist episodes? Check out my resources at www.TheCreativePenn.com/future
Transcript of Interview with Michael Bhaskar
Jo: Michael Bhaskar is a writer, researcher, and a co-founder of a publishing company Canelo. His latest book is Human Frontiers, the Future of Big Ideas in an Age of Small Thinking. Welcome, Michael.
Michael: Thank you very much for having me. Great to be here.
Jo: I'm excited to talk to you.
First off, I wanted to ask, how have you managed to combine your interests in technology and publishing. Tell us a bit more about you.
Michael: Well, with some difficulty, it has to be said. I often feel like I'm slightly leading two lives and endlessly trying to find little bridges between them, not always successfully. It is a bit of a struggle.
I've always loved books and reading and storytelling, but I have always also been really interested in technology and how people invent new things and then what technology does to change the world. And those have just always been things that I've been fascinated about.
At various times, one or the other seems to nudge ahead. And I always thought there would be a bit of a divide and one would have to choose.
I guess the thing that brought them together for me was when I'd had left university and I was doing a few jobs and then that was just before the digital publishing wave hit in kind of the middle of the last decade…or, well, two decades ago now, 2005-2006. That created a few openings to work on ebooks, to work on digital publishing, to work on interesting digital experiments. That was the first way really that I felt like these two things could work together.
I've always tried to maintain writing about both, writing about publishing but also writing about technology, working on publishing but always trying to use technology in interesting ways. So, it is an odd struggle and often they feel like very different worlds.
When I'm doing my writing, it feels very far away actually from being a practicing publisher. So, I try and find these bridges between the worlds. But it doesn't always quite cohere even for me, to be honest.
Jo: As I was saying before we started recording, I'm so glad to talk to you because I feel this too. I feel like I lead these two lives between being the artist and then being the business person who loves technology.
It's hard to find people to talk to you because a lot of the bookish people seem to have some kind of disdain for technology. And yet, what we basically do now, as publishers, is so bound up in technology. I feel like finally publishing might be embracing this stuff. What do you think?
Michael: To some extent. When I first started to work in digital publishing, 16 plus years ago, it astounded me how hostile the entire publishing industry was to technology. I found this a very unusual attitude because actually the publishing industry, and one of the first things I noticed about it is obsessed with newness and new things.
It's always, ‘What are the new books? What are next year's books, next year's writer, next year's hot ideas?' And, so, on the one hand, I just thought, ‘Wow, there can't be many industries that are just as constantly open to a sea of new products and new people as publishing.'
But at the same time, it had this incredibly conservative hostile attitude to any kind of meaningful change in the technological base that it worked on. That really did surprise me.
What is amazing is that I don't think that has really changed. What's actually happened is that somebody like Amazon or Apple have solved the technological problems for publishers so they don't have to think about it particularly hard. Publishers are also quite hostile there.
Again, just going back to when I first came into publishing, people thought Amazon was another book-selling account. They thought, ‘Oh, well, Amazon will never be as important as Waterstones or the supermarkets. I remember I always used to tell people in publishing, they complained about Amazon, and I would say, ‘Well, why don't you invest the company's money in Amazon stock?'
Obviously, they didn't do that. Neither did I because I didn't really have any money. But had they done that, they would've been absolutely cleaned up on it. But, of course, they didn't because they didn't have a vision of what technology would do or how it could evolve and change and what the technology companies might become.
It was just so far away from their thinking that that never occurred to them that Amazon might become this extraordinary behemoth that it has become.
Jo: Funny you say that because I made a decision, a good few years ago now, not to go exclusive with Amazon and not sign with KDP Select for most of my books, which so many indie authors do.
But, at the same time, I bought shares in Amazon because I was like, ‘I believe in their business model. I just ethically choose not to do that.' But, obviously, that was pre-pandemic. So funny that you recommended that too.
It's interesting, the choices we make. You used the word ‘hostile' a minute ago. And the other thing that I think has changed since you got into this is that —
There was this antagonism, this hostility between the traditional publishing industry and independent authors.
I don't know if you remember when we were being called ‘the tsunami of crap' back in 2010, I guess when Kindle was really taking off.
Michael: I think, unfortunately, a former employer, who I do actually have a huge amount of respect for, I think was one of the people who said those exact words.
And I think, in that case, he got it catastrophically wrong, and I just couldn't disagree with him more about that, to be honest.
Jo: How do indies and traditional publishers and hybrid publishers fit together in this new world?
Michael: I think the ecosystem is vast, and it has space for so many different players. I guess here I can talk about my experience at Canelo.
We love working with indie authors, that is great, we have a lot of authors who publish a lot with us but also publish on their own. I think that works absolutely fine. I think it means you're both working on that author's stuff. I think the author benefits from a publisher marketing but also from the editorial relationship.
You can often really see that a writer is improving from that repeated working with professional editors. But then also that can go back into their own work. So, we love it. We just think it's a great model. There is room for everyone.
I also think that traditional publishers, they are somewhat focused on the big genre or book that's very fashionable. And indie authors can follow their noses a bit and go into things that the big publishers have forgotten about or overlooked. So, I think that's hugely valuable.
At Canelo, we love it when we realize that something we really enjoy is just being completely ignored by the big houses. And often, that's something that we can then work on within the authors who are in the space.
So, for me, it's all just one ecosystem and there is space for everyone. The big publishers, they do things no one else can, they can back things and make things happen. But for me, there shouldn't be any antagonism.
I think any publisher that is looking down their nose at anyone writing is just being an idiot. And I think the whole debate is really over. It's just an established fact that there is room for everyone, that there is great work coming from every corner. And that's just the reality and everyone needs to get on with that and acknowledge it.
Jo: I'm so glad you feel that way because I always thought it was a bit of a waste of time to have any kind of antagonism in a world of books. Because we should be defending our books area against gaming and TV and all these other things that take people's attention rather than against other people of the book, one might say.
I feel that there's still a lot of misinformation and harking back to the, in quotation marks, ‘good old days' and that perhaps people don't realize that all authors don't get seven-figure deals and that kind of thing. I still think the expectations are stuck in the 90s, for some reason. I hope that, slowly, we're all changing that expectation.
Michael: I hope so. One thing I would say that I've definitely seen just become ever more extreme in the traditional publishing world, and it's not something that at Canelo we get involved with, we have a different model, but it's just that the polarization between the big bets of a publishing house and then everyone else is massive.
Some people are getting paid astronomical amounts of money, but they are small in number and most people aren't. Most books aren't really working that well.
So, the traditional publishing world is not this gold mine or this great place, it's actually just this very divided place between people who have got lucky or are already famous, in many cases, and everyone else.
And again, that's just the reality of it that I think everyone thinking about the book world needs to know. It is this incredibly unequal place.
Jo: Absolutely. And, look, to be honest, I think it's the same in the indie space. There are authors making seven figures, multi seven figures, as independent authors. But that's not the majority.
The majority of people might make a few hundred, a few thousand that someone like me, who's got 30 plus books, is making good money. But I think it's the same, people see the outliers, the ones in the news, the J. K. Rowling or whatever.
You're obviously a publisher too. We make money from years of creative work. And I think that's what I encourage authors to think is we love writing, we love books. This is a career, I've been doing this since 2006 I started writing, so, 15 years in, I make a good living. And I'm happy.
Of course I'd love to break out, wouldn't we all, but I think long term creative work is the reality for all of us in publishing.
Michael: I think you really capture there is how much of a long game it is and something I say this to authors all the time, ‘How much of a linear relationship there is between your output and your income?'
If you're going to write 1 book every 2 or 3 years and expect that to really deliver a meaningful income, you will really struggle. Whereas people who are just nose to the grindstone producing two or three books a year, year in year out, over a decade, then that can really really start to add up.
And I think, possibly, a lot of people just underestimate that, just how much of it is about hanging in there, being very consistent, working very hard, and then it starts paying off. There is this idea, and again, this is perhaps more the model of a traditional publisher and it's this hit-driven idea that you're going to sit there, work on a masterpiece, and it's just going to become some major bestseller.
It's kind of like scoring a mega goal out of nowhere and that's it. But actually what it's more about is a long slog, it is more like a series of marathons than just scoring one mega goal. I think that that's an important message that publishers forget and writers forget, but that's just the nature of the beast.
Jo: Well, ‘thinking long term,' everyone on my show hears that a lot. Let's get into the book because we've talked really about the past and the present but let's move into the future.
The second half of your book, Human Frontiers, goes into how big ideas might emerge tomorrow. You mention GPT-3, which I've done a number of shows on, so, we don't need to get into technological detail. But you say, quoting from your book, you called it a ‘powerful real-world application already throwing up startling ideas.'
I've been playing with Sudowrite, which is one of the tools that's been built on top of GPT-3. There's a lot of them now, essentially natural-language generation tools. I have included a statement of AI usage in the back of my next novel, which is coming out soon, Tomb of Relics.
I wanted to ask about your opinion, as a publisher, for writers who are already using tools like GPT-3 and might not be admitting it as well.
What are your thoughts on Natural Language Generation tools like GPT-3?
Michael: Lots really, and I'm so glad, Joanna, that somebody in the writing world is thinking and talking about GPT-3 and in general, large language models and natural-language programming because, as far as I can see, I think your podcast is probably the absolute center of it. No one else is talking about this.
It's been something that I've been thinking about for quite a while because I did a kind of consultancy gig for two years as a writer in residence at DeepMind, which is a subsidiary of Alphabet, and for those who don't know, is probably the world's leading AI lab. Perhaps along with OpenAI who produced GPT-3.
For two years, I really had amazing insight into what was going on in AI, what was coming, why it's so important, how far advanced it could be, and just thinking through all of the issues around it, and in particular the social and ethical issues.
To come on to what GPT-3…I think it's astounding that it's not being really thought of because it is a true existential-level event for publishers. But publishers, as I mentioned, they've not tried playing with GPT-3 and other large language models, so, they have no real conception of how powerful they are. They have no real idea of the level of textual interest that they can generate.
And, of course, the thing about GPT-3 is that's not the last word. You've got to imagine what's it going to be like in 10 years when it's GPT-15 or they're talking about models with trillions of trillions of parameters. I think it's this extraordinary existential event that nobody is really thinking about. And it really is the case that these businesses that are worth billions of pounds probably should start doing that. So, that's one thing.
As for your point about, a statement of usage, I think that is an absolutely brilliant and must-do suggestion. I think then there almost needs to be some industry-wide pact and policy on this that basically agrees to state what is AI-generated and what isn't.
Of course, this is a massive societal problem because the potential for misinformation, and not just in natural language but in image generation and video generation, which is now fast coming up there, is so huge. We need to develop all of these mechanisms and norms about what's true.
It'd be really interesting to see if the book world could lead on this because actually it's quite a contained use of AI. It's not like just putting out stuff on social media, an author and a publisher, one or the other or both, effectively do control what goes in the text. So, it'd be a very good litmus case for establishing a benchmark, ‘Right, this is generated by AI. This is generated by AI.'
If we could do that well, it might become something that is more widely adopted by news organizations, say, or governments. It's a really exciting idea, it's something I'd love to be pushing and to get more involved with to like help create this standard.
The difficulty is just going to be a matter of time. And am I or is anyone up for spending three years explaining just loads of stuff to publishers who don't really want to know?
Jo: I agree with you on that. I've been involved with the World Intellectual Property Organization (WIPO), and Orna Ross and I put together a submission for the British government IPO on AI and copyright. And, basically, my feeling a year later is the genie is out the box already or the horse has bolted or whatever you want to say.
And, as you mentioned, if it's going to take three years to explain this like it did for ebooks, for example, then it's already too late. I already know people who are generating work and publishing it, traditionally published authors, as well as independent authors, who are not stating AI usage.
There's no legal requirement. You can use a plagiarism checker and it's not plagiarized actually, that's also kind of scary.
Michael: Yeah, it's completely newly generated.
Jo: Exactly. So, I feel like what I'm trying to push for and what the Alliance of Independent Authors is pushing for is an ethical use of AI. And, also I'm not ashamed of using AI tools.
I've stated in the back of Tomb of Relics, I use Google, I use Amazon, I use Amazon Auto Ads, I use ProWritingAid, and I use Sudowrite. So, all of these things are AI tools, it's not just the generation. Plus, I use it more as an extended thesaurus, at this point, but I'm very keen to push what is possible. Have you actually tried it?
Michael: I have, yes, I have and I tried an early version of GPT-2 as well, which already had astounded me. And that wasn't made publicly-available at first because OpenAI made a big thing about how worried they were about it. So I have tried GPT-3 and I was stunned by what it could do.
And then I haven't used it in the past couple of months because I just didn't have access to anything, but I'll follow up on some of the things, so, I'm amazed by it.
I'm like you; I would say it's inevitable that people are going to use it, and that's why I think your approach is incredibly sensible. It's not about not using tools, it's just about for grounding when you have and are using them. I think that's such an important distinction.
And look, Jo, I think we should start some kind of campaign about this because it's genuinely important. I can honestly say, it's just not on the radar of a lot of the big companies at all. It really needs to be. The fact that their authors might already be using it, that should set alarm bells ringing.
Jo: You mention alarm bells, what I don't want is the sort of fear that we have.
To me, what has changed in my own reaction to all of this is I have gone from fear of AI taking my job to, ‘Oh, this is absolutely wonderful. I love this.' I'm giggling away when I'm using Sudowrite.
A year ago, I wanted to train a language model with my own output, with my own J. F. Penn books, and then write more in my voice. And I've completely changed my mind now, I don't want to write with myself, I want to write with ‘a mind' that is not like me.
The stuff that comes out now between me and the AI…and, of course, the difficulty is the prompt engineering, that's the thing. And it's almost this childish wonder.
I'm sitting there giggling, and that is not normal behavior for me during my writing time.
Michael: In many ways, this is one of the arguments that I'm making in Human Frontiers. The book is saying that, in many ways, we're having problems coming up with major new ideas. And there's a lot of evidence across the board in society that we are, despite what a lot of people think, actually really bad at big revolutionary ideas.
I am so excited by the potential of AI to reignite a new generation of ideas.
And this is definitely the track record of AI is exactly as you say.
One thing that DeepMind did very famously was it was the first to create an AI program that beat a human being at the game of Go, which is exponentially more complex than chess. Nobody thought that AI would be able to do it. [Alpha Go]
But what was really really interesting about what happened to the game Go after DeepMind's work is it's totally changed. All the best players now are playing Go in an incredibly different much more freewheeling and much more creative way than they used to.
It's almost like playing with and against the AIs has just opened up this whole new style that is incredibly exciting, that, in thousands of years, people had never really thought to play like this. But now they do.
For me, that's the promise of AI is that, across the board, it's a new way of seeing.
It's like a new tool that we can use for creative ends. I think it is really really exciting. And the way you're talking about it is exactly how I'd hope it would be used.
Jo: Oh, good. I think playing with is what I'm trying to emphasize as well, this excitement at creativity. In the first half of your book you talk about stagnation.
And it's actually quite funny because, probably about 18 months ago, I was really thinking about getting out of the publishing space because I was just like, ‘I am so frustrated with how stagnated this whole thing is.' And then all these things started to happen, and I was like, ‘Wow, okay. Things are now changing again. I feel like it's sort of 2008 all over again in terms of what's happening.'
Let's come to another thing that I'm excited about, which is the AI narration of audiobooks and speech synthesis and all of these things. This is an opportunity to expand audio content into more languages, more dialects, allow listeners more choice.
I actually, just this afternoon, been proofing my first audiobooks with DeepZen, and I'm blown away. Google Play Books is just bringing their AI narration out of beta. Because, again, the fear level in the publishing industry and protectionism seems to be very high.
What are your thoughts on AI narration?
Michael: I think it's just inevitably coming. It's one of those things where voice synthesis is is getting really really good. Again, it was something that DeepMind has worked on in relation to Android. There's a lot that's published about that. I just can't see how it can be stopped.
Do I think that will mean that there'll be no more human-narrated audiobooks? No, because people really like certain narrators. I think there probably is something that's random about it that is good. Of course, there are celebrity narrators.
Do I think AI-enabled narration is coming? Of course, because it does just open the barriers. It's futile to worry about it or to resist it, in my view, because it's going to happen because it's just so useful and the bottleneck on paying for narration is massive. So, as far as I'm concerned, it's just quite a simple thing. It is going to happen.
There will be a lot of resistance and that resistance will just take the form of people not letting it happen to their books. But eventually, just that will change. In 10 years time, it'll just seem completely unremarkable.
Jo: I agree.
I feel like there needs to be a stratification of rights for audio.
At the moment, a lot of publishers seem to just take audiobook rights, which, to me, is too broad.
What I'm doing is I'm actually creating some of my audiobooks that I've narrated myself, as a human, and then getting them done in a male voice by the AI. So, it's the same work but one is AI, one is human.
[From Joanna: Here are examples of the two:
This is what I want. I don't know if you get this, I listen to loads of audiobooks, loads of business books out of America, and they are all narrated by American men. Whereas I would like to listen to them in the voice of a British female, for example, or maybe someone would like to listen in…I don't know, a Birmingham accent or whatever. So, this is what I feel we're missing.
If there was a stratification of audio rights, what you'd have is a human-narrated single-voice audio, human-narrated multicast, for example, and then AI multi-voice rights or whatever.
That's how I would like to see that happen.
Michael: I think that would be fascinating. I think you're going to be pushing against a harder obstacle there. Because one thing I have learned is that it's eventually these kind of changes come through but changing the structure of rights, that is way harder than anything because then you're getting to the bedrock of the industry. That will just be more challenging.
What I think will happen is just that slowly the increased functionality will seem better and better and people will just enable it. But I think it'll be difficult to start splitting out the rights. We'll see.
If literary agents, for example, think that this might be beneficial to them and their clients, then you might see it start to happen. But I would imagine any publisher will just furiously resist this. It's not a great situation for publishers because, once again, they don't own the technology, so, they're not likely to be massive net winners from it.
Publishers basically think, ‘Once again, we don't own the technology,' or, ‘but we're not technology companies. As long as we can cream a bit of extra money out of it, well, maybe we'll go along with it.'
Eventually, they might get to that point. But I think the last thing to change will be the rights. Everything else will change first and then, eventually, there might be changes.
Jo: That's interesting, isn't it, because all the AI stuff I've been delving into the last 18 months and the AI copyright stuff is that legislation happens years after people are already doing these things. So, the rights stuff will come, again, years after that probably.
But that's what's weird as well because there's a lot of things that's going on, like the use of GPT-3 and these natural language-generation tools. There's nothing in a publisher contract necessarily that stops that happening. And listening to AI and copyright webinars, it's not plagiarism, it's not infringing copyright. So, there's nothing wrong with it.
And yet, you hear pushback, for whatever reasons, based on fear and uncertainty and all that. So, it's interesting that you say, ‘the rights will be the last to happen.' I completely agree with you.
The other thing that's really happened in 2021 is the explosion of NFTs. And, of course, it was about 3 years ago, 4 years ago when we first talked about blockchain at London Book Fair. And there are a few incumbents in the blockchain for books space but it's not been accepted in any way.
Then, this year, NFTs have gone nuts. And, in the last few weeks, really, we've had Book Volts and Creatokia from Bookwire, who are a German company.
What do you think is going to happen with blockchain and NFTs? Do you think publishers are just way way way too far away from this or have you heard of interest in this area?
Michael: Being honest, I have not heard any interest around NFTs at all in the publishing space. I would say publishers are definitely behind the curve on it. I'm basically agnostic on whether NFTs will ever be a thing for book publishers.
In some ways, I hope they don't because the beautiful thing about digital technology is its ability to spread. And I think NFTs might just be putting…I mean they're not stopping spread, so, I guess that doesn't…I'm just agnostic on the whole question of NFTs.
I slightly think that, in 20 years' time, NFTs are going to be huge, but nobody's really going to be bothering to buy art or trainers as NFTs. What they're going to be is it's going to be a record of guarantee. So, you will assert that you've used AI here, here, and here in one of your books, and that will be somehow guaranteed by some kind of NFT or some kind of blockchain mechanism.
I think there are potentially really interesting uses of it but I'm agnostic on the more kind of, I would say, obviously commercial uses.
Jo: That's very interesting.
Michael: That's where I am.
Jo: Right, because I think this to me is very exciting because, if NFTs are essentially digital assets, that allow a smart contract to bring on resale of the NFT, the original creator can have an additional royalty, say, another 10%. And that carries on for the life of copyright.
We have never had digital resale before. And this presents an entirely new business model. There are so many potential business models around NFTs, like, if people can get over the fact that they're not just a JPEG or whatever.
To me, that resale of digital special editions could be absolutely huge. Because we haven't had that before. Right?
Michael: We haven't had that and there's just no market because it doesn't exist. I would love to see some experimentation there. I think the difficult thing would be working out a pricing structure that actually works. But, you know, the only way that we'll be able to figure out a possibility would be to try it.
I mean, is it going to work? I don't know but my kind of default would be to say, ‘It's got to be worth trying.' I think already that is a more interesting business model than just selling an NFT of cover artwork, say.
The big question is about what elements of a special edition are going to be sufficiently value-add that then it is something that is very much worth paying for, both initially and then down the line.
But that's the kind of creative task that I think we should be doing. I used to do a lot more of that kind of creative thinking. At Canelo, we are just pretty much focused on publishing books, and that's basically because we're a startup, we need to publish books to survive.
But I think we do have a hankering to get back to some of what we were doing 5, 10, 15 years ago, which was just thinking in a very open way, ‘Well, what could all of this be? How can we reinvent the world of books for a digital age?‘ So, perhaps this would be the experiment.
I guess one thing I have learned though, Joanna, is is that readers are skeptical of things that introduce more complexity. And, so, the key on this is to somehow make it so seamless that it has not complexified either the product or the process of buying it. Because if it does either of those things, I think then it starts to really really struggle. So, those for me are the things to think about, how is it as simple as buying or reading a book?
Jo: Well, it clearly isn't right now. Again, like I said, I think it's 2008 in the world of ebooks, if you remember, I was living in Australia…
Michael: I think it's more like 1998 in the world of ebooks…
Jo: Well, maybe it is.
Michael: I think it's not that early and that undeveloped.
Jo: Right. I would say it's a little bit further in that people actually can transact online. But I agree it's really early.
I think what's interesting is this is a fan-based model in the same way that physical special editions are a fan-based model.
Most readers do not buy special editions. So, the example I give is the Brandon Sanderson 6.7-million-dollars special edition of The Way of Kings, which he sold to traditional publishing years ago and then did a Kickstarter for.
I think that's what NFTs represent, it's a fan-based product. I'm planning on doing one for Tomb of Relics because it's the first book I've ever used AI with. So, what I did while I was writing it is I recorded a video of me writing with AI. So, this is the first book I've done with it.
It's got a video of me writing with it and it's going to have an image of my handwritten edits. So, it's actually a pretty original product and I'm still looking at what platform to put it on.
Michael: That was going to be my question is where will it go? There are now a lot of these NFT marketplaces and services that are doing it.
Jo: As we're recording this at the end of October, 2021…and, as I said, in the next couple of weeks I'm talking to Creatokia from Bookwire and, obviously, there's Bookchain, Publica, Book Vaults, but also there's just places like OpenSea and you can use different blockchains.
I think the point is, as you said, this is such early days but I was one of the first people in Australia to get a Kindle, I was one of the first international authors to publish on the Kindle, one of the first to do ACX audio. I feel like I kinda have to do this to prove some kind of point.
Michael: I'm fascinated by the psychology of NFT purchases. So, there's a website based in London, it's been backed by some of the biggest VCs in the world and it sells NFTs of graphic trainers. So, you own an NFT of these trainers but it's selling NFTs very often for tens of thousands, and fairly often for hundreds of thousands of dollars.
I'm just really curious about the kind of economics and psychology of it. Are people investing as a kind of speculative place or are they buying things as a collector would buy things? And that's what I'm interested in. Because I don't know and I don't understand it.
Jo: There's a lot to know but I think it's interesting. You have another book called Curation: the Power of Selection in a World of Excess, and I feel like a lot of this comes down to there's a world of digital access. These are digital special original assets.
Now, of course, the world of publishing is not the world of multi-million dollar trainers, so, that's not what we're talking about.
What we're talking about is special-edition ebooks that have resale potential.
Anyway, I think the point is there's a whole lot to explore here. And again, as we record this toward the end of 2021, what we're probably saying is it's going to take at least five years, but what you're saying is 10 years, for it to become mainstream.
Michael: I guess my question though is do people who will buy your NFT, do you have any sense or do you mind whether they're buying it as a speculative asset or they're buying it as a kind of fan buy-in thing?
Jo: Of course I don't mind, I don't mind at all. I have a goal this year, which is to earn Ether. Because I think earning cryptocurrency is going to be an important thing. And I think, we can't get into digital currencies here, but the financial system is changing, they're going to be digital central bank currencies, all of those.
At the moment, I'm just playing with things. And look, to be honest, I have enough techie people in my audience who may well take a punt on me actually achieving something in this digital space over the next decade. So, I don't mind either way. And also, look, if it falls flat on its face, I don't mind. It's an experiment.
Michael: Yeah, that's fine. I think you have to take that attitude. I just commend your adventurous spirit and I do think it says something about the business and creative landscape that you're the author who's doing this, that no publisher is even considering it, would barely know what Ethereum is and have a clue at what it could mean in its most developed forms for the world and the future of finance, etc. So, that's fascinating. I will follow very closely because I think it's seriously interesting.
Jo: I'll let you know.
I also want to ask your opinion on the rights issue. And, in fact, I actually put out an article today about intellectual property rights and I found an article, back in 2008, which is when the publishers were sending round addendums to contracts basically asking for digital rights or author rights…
Michael: I was doing a lot of that at the time. It was probably me.
Jo: Do you remember; was the phrase ‘digital rights'? Is that what people signed an addendum for?
Michael: I think that's almost certainly what we would've asked for. If you were a switched on literary agent or author, you would've come back and said, ‘No, electronic ebook rights, here's what I mean by an ebook.'
I'm sure that publishers in the first place would've tried for the broadest possible definition. In many cases, that would've got through, and in many cases it will have been whittled back to something much more specific.
Jo: Because this is what I'm now concerned about. This struck me on another 3 a.m. moment the other day, which is, if NFTs and blockchain is a reinvention of the way we do digital, which it could well be, and NFTs, essentially, you could argue are an ebook…well, they're certainly a digital product…and resale of these digital products becomes a thing, there's nothing in contracts about resale percentage to authors.
I think that, again, we're going to have to go through another round of addendums within the next few years.
Michael: I think there would be something about on the resale because digital rights and ebook rights tends to be on a net-receipts basis. So, if a publisher is earning money from resales, the author will still earn a percentage of that that's come to the publisher.
They should be covered to some extent but what the split should be would be then a very different question. It might be argued that it needs re-examining.
Jo: Or I guess more to your point, it's a bit like all the authors who've signed away audiobook rights whose books are not available in audio. I feel like the same will happen with NFTs in that most authors won't be able to do them because they don't have digital special-edition rights.
In the same way that Brandon Sanderson actually excluded special editions from his traditional publishing deal, which meant he could do his own Kickstarter.
Rights have to be more clearly defined in the digital space.
So, it was just something I was thinking about was like, ‘Oh my goodness, this is interesting.'
Michael: Yeah. And any author or literary agent with…say, if you're passing over audiobook rights, you should…and, I'm saying this as a publisher and we do like to get all the rights we can but, you know, at Canelo, we like to be fair, and that's very important that we're very fair and transparent.
I think pretty much we would always have some clause, or authors and agents would insist on having a clause that says, ‘If you don't produce an audiobook in X time, the author can revert that right.' That should be something that people listening should always be getting if they are looking at contracts. If a publisher isn't going to exercise the right, then it shouldn't necessarily be able to have that in perpetuity.
So, there could be some major battles on the horizon about this because, yes, is an NFT an ebook or a digital product? What should be the definition of it? Where should it sit? What should the splits be?
There is just absolutely no precedent here. So, what it took was, with ebooks, there was this thing where it became 25 net receipts. At Canelo, we have doubled that and upwards as our basic digital royalty. But if you go to a traditional publisher, that's your royalty.
I think it was Random House, it wasn't PRH at that time, just came out and said, ‘We're going to do 25% across the board.' And they said that publicly. And then every other publisher just went, ‘Yep, we'll do that.' And then bam, it was there.
I wonder if we'll see something like that. I suspect not because I think this is going to be happening on a much more bespoke basis. I think it's very different market. It is going to be smaller in terms of the number of actors but, potentially, more lucrative in terms of the margin that you're making. It'll be fascinating to watch it happen.
My guess is the standard will be set because probably Penguin Random House will eventually have to come out with a policy on it that will be public, and then all the other publishers will follow. But it will be a massive fight.
Jo: It's funny you mentioned ‘consulting,' I used to be an IT consultant and I even set up a website and everything for doing consulting around AI, Web3, blockchain, and this kind of features stuff. And then I just pulled it down again and went, ‘Oh goodness…'
It's like you said, ‘Do I want to spend years trying to drag people kicking and screaming into the future? Wouldn't I rather just get on and do it.'
At the moment, I feel like I just want to get on and do it. But that's why it's so good to talk to you because you mentioned the word ‘bridge,' like I feel like we need more bridges between where we are now and the future.
In the same way that we needed to bridge that digital gap a decade ago.
To me, the next decade is going to be another reinvention, possibly even bigger than the one we just did.
Michael: I think that's true both in terms of wider society and technology and probably in terms of books.
But I actually think the main difference is that, a decade ago, publishers were employing people like me to think about this and now they have just completely rowed back and they just think, ‘Right, well, we weathered that storm and we survived pretty much intact. We now do these things called ebooks, we do audio book downloads, but that's it. We never need to worry again, we're just going to stick with the groove.'
So, in some ways, I think the book-publishing world is in a much more closed-minded space than it was even 10 years ago when they had started to really engage with it. And they'd started to engage with it because they'd seen what happened to music and they'd seen the revenues just fall off a cliff, and they were terrified by that.
This time around, with blockchain, with AI, they are just so out of the game that I kind of even struggle to think how they're going to do it.
The other thing that I think that they've really miscalculated on is that, if you want to get people to put you in an advanced position in blockchain or AI, it's extremely expensive and difficult. And there's already a war for those people amongst the tech companies where there's just simply no way that publishers can get back in the game, and, so, they're just never going to be able to catch up on this front, they're always going to be well behind the technological curve, they're not going to be setting the agenda for anything that's happening. And, so, they're going to be at a kind of perpetual disadvantage.
I think that's probably quite an exciting thing for authors who are in your position where you can be more nimble, you can set the pace, you can actually do a lot more that is a lot more innovative, a lot better.
So, that might be the ultimate shift that happens is it's just the people who are really pushing the boundaries can get ahead of where any publisher is at and, thus, potentially clean up.
Jo: Excellent. That sounds like fun.
Michael: It's going to be hard, it's going to be hard. For those reasons that I said, unless you can make it all simple, it's difficult.
But the AI stuff is about writing and need not impact the consumer. It's as much a creative revolution as anything else.
Jo: Indeed. Well, there are so many exciting things going on right now. That's why I enjoyed your book, I thought that the future of big ideas is how I feel at the moment.
I am just so excited about the next decade. And it feels like you are too in a slightly less exuberant way than me.
Michael: I am excited. I am massively excited. I do think there are a lot of challenges. I think there are a lot of fears around this that can't be dismissed. I think some people just have a natural fear of something like GPT-3, or even projecting forward GPT-15, it really worries them at a deep level.
I do get that and I think it's important that people who are on the frontiers of this do acknowledge this is a profound change in what is possible. And that is unsettling and it does come with risks and it does come with the risk of losing something as well.
I always think everyone involved has a responsibility to make it work, and that's not necessarily going to be straightforward. I'm excited that there are such creative people as you, and I'm sure lots of your listeners. And I'm disappointed that traditional publishers aren't here as well.
Jo: Where can people find you and your books and everything you do online?
Michael: Well, look me up on Twitter, @michaelbhaskar, I'm on Twitter all the time. And you can find my books on Amazon or in all good bookshops.
Jo: Fantastic. Well, thanks so much for your time, Michael, that was great.
Michael: Thank you very much. Thanks for having me.