Today’s post is by author and marketer P. S. Hoffman.
Lately, influencers are parading Non-Fungible Tokens, or NFTs, as the shiny new key that will unlock the future of the internet. In publishing, respected entrepreneurs, like Joanna Penn, are wondering if NFTs could become a serious source of income for authors.
But in my opinion, the promise of NFT books is riddled with warning signs. The outlandish hype, the allure of quick riches, and the shining exterior of “new, disruptive technology” paints a picture I’ve seen before.
Here’s why all this chatter about NFTs in publishing will probably amount to nothing more than a rush for fool’s gold.
What is an NFT book?
The short answer: an NFT is a receipt that proves you bought a digital product. Jane has much info on NFTs here, but at its core, that’s all an NFT is—a crypto-generated digital receipt.
Therefore, an NFT book is a receipt for a digital book. Most often, this will come packaged with the actual book’s file, and exclusive content to “sweeten the deal.”
The most basic idea is to allow people to collect, trade, and sell digital products, as if they were handmade and truly unique. But a unique string of numbers on your receipt does not make your product more valuable.
What’s more, I’m going to show you why the promise of NFTs will most likely not upturn the whole publishing industry, and will not decentralize the power of the richest publishing giants. More on that in a second.
First, let’s talk about marketing.
Scarcity does NOT make something valuable
Have you ever heard of “thulium?”
It’s the scarcest rare metal on Earth. It’s smooth, silvery, and easy to work with. Thulium is also one of the least valuable metals. Scarcity alone does not make something valuable.
If I tried to sell a book that no one has ever heard of on the premise that “it’s the only one ever printed,” no one would care. Now, if I tried to sell the author’s original handwritten copy of, say, The Hunger Games, I could probably sell it for a pretty penny.
Without demand, scarcity doesn’t matter.
And NFTs ignore the simple truth of the internet: everything hosted here is infinitely reproducible. There is no scarcity.
Therefore, to make a meaningful income off of NFTs, we’re going to have to talk about artificial scarcity.
Artificial scarcity is a tool to make potential buyers of a product temporarily increase the value they assign to that product. As a professional marketer by day, I use artificial scarcity almost everywhere. Giant ticking timers on sales pages, phrases like “as long as supplies last,” and limited edition runs are well-used tools in every marketer’s kit.
Artificial scarcity has two major drawbacks:
First, it’s not scalable. Limited-time offers, by definition, are limited.
Second, artificial scarcity is fake. Too much use can cheapen your brand, and anger your audience. Nobody wants to feel like they’re being duped.
These problems are magnified when it comes to NFT Books. People who praise Non-Fungible Tokens have yet to address the fact that ebooks are inherently fungible.
Before this century, books had to be printed. Which meant we had to kill trees, process them into paper, and expend gobs of ink to create a single book. Books were inherently limited by their resources and manufacturing costs, not to mention distribution.
The internet changed that. A ebook file is so small, it can be sent in an email. Anything digital can be replicated infinitely, for no cost except the power that feeds your device. Which means, if you want to sell an NFT of your book, you are going to use artificial scarcity.
Will readers buy NFT books?
Only if they’re easier or less expensive to buy than any other ebook. And thus far, that doesn’t seem to be the case.
The internet is obsessed with hype, and letting it spiral out of control. Often, to dangerous effects (I’m sure you can think of a few recent instances).
The hype always begins with a promise—great wealth, or great health, or some dramatic change—while providing very slim evidence (if any) to back it up.
Hype spirals are magnetic. As hopefuls flock to become “early adopters,” they add momentum to the spiral, which pulls in more. When you’re in the epicenter of a hype spiral, it can be hard to see anything but the benefits of hopping aboard.
I have seen it happen to dear friends. I’ve watched them lose thousands on silly schemes that were obvious in hindsight, but because the hype was so strong…
This is a warning about all this NFT buzz: it’s easy to make promises, and hard to deliver. Independent authors, specifically, may be at risk for the predatory sales tactics around NFTs. Even the copyright law isn’t there yet.
Some readers will certainly buy NFTs, for as long as the NFT novelty lasts. But nothing builds momentum forever, and when the hype spiral begins to slow, it begins to die.
The publishing industry will be fine, but any author who stakes their writing future on NFTs may be left holding the bag, so to speak. As with any area, be careful how much you focus on NFTs.
Of course, many still believe NFTs have the power to change the publishing world. The power comes not from basic book sales, but from other areas.
Don’t people want to collect unique NFT editions of books?
But NFTs are digital. So where are you displaying these digital receipts for the books you’ve purchased?
Digital collectibles make sense in limited environments, like cosmetic micro-transactions that are popular in the gaming world. Gamers “live” in their worlds, and the cosmetics are immediately obvious.
But publishing is different. Are readers supposed to sit down with their morning coffee and scroll through their digital library while sighing with pleasure?
I have my doubts.
NFTs might have a place in other industries, but when it comes to turning NFT books into a sustainable and meaningful source of income for writers, the basic premise of the digital collectible business model doesn’t hold much water.
NFT books will be more expensive than regular ebooks (and probably more than physical books, too). They will be less useful, they will have no physical attributes (like the feeling of a leather-bound or the smell of an old bookcase), and—except for that tiny piece of code—they will be nearly identical to a regular ebook.
The main way to make NFT books profitable is to bundle them with other products. We can already do this. I’m skeptical that NFT technology brings anything new to the table here, other than over-specialized proof of purchase.
It’s like hiring a full-time construction crew and a jackhammer to nail a picture to your wall.
Do NFTs have the power to usurp the rich publishing monopolies?
In truth, Amazon is already looking at NFTs, and numerous online distributors are already selling NFT books. Several other entertainment giants are already laser-focused on exploiting people’s hype for NFTs. These major players, who have all the resources in the world, are ready to capitalize on this new fad.
At best, new independent NFT marketplaces will crop up and limp along for a few years, before the giants gobble them up.
You can already see this happening in cryptocurrency markets, like Bitcoin, where a full 30% of the currency is concentrated in the hands of a relatively small number of investors.
Decentralized often means unregulated, and today’s digital monopolies easily have the resources and flexibility to take advantage of any new media.
The audience for NFT books is (probably) smaller than the hype
Unless you’re already a big-name author, and the cash doesn’t really matter, you’re probably not going to make a meaningful income from selling NFT books.
I doubt NFTs are dangerous for authors, but recently I’ve seen a lot of slick talkers trying to shove this dollar-sign-shaped technology into the publishing industry. Since the hype around NFT books is nearing its peak, I just wanted to stake my warning down for writers everywhere: if you go rushing for fool’s gold, you might just find it.