Blockchain could profit off secondhand textbook sales, suggests publishing giant Pearson
on Aug 04, 2022
Textbook publisher Pearson has suggested that blockchain tech could cut off its secondary textbook sales, capturing a section of the book market which had so far escaped it. As quoted by Bloomberg, Pearson CEO Andy Bird believes non-fungible tokens, or NFTs, could help publishers make money off textbook resales, although he didn’t really describe any concrete plans.
“In the analog world, a Pearson textbook was resold up to seven times, and we would only participate in the first sale,” said Bird after the company announced its latest quarterly earnings this week. “The move to digital helps diminish the secondary market, and technology like blockchain and NFTs allows us to participate in every sale of that particular item as it goes through its life.”
Bloomberg suggests this would mean letting buyers resell e-books, a rarity in the publishing world so far.
“A PEARSON TEXTBOOK WAS RESOLD UP TO SEVEN TIMES, IN THE ANALOG WORLD”
Although it is not clear how, when, or if NFTs might show up in Pearson’s catalog, but they can possibly mark a new stage in a long-standing publishing war. Thanks to legal concepts such as the first-sale doctrine, physical book buyers typically own the media purchased outright and are allowed to sell it without the original publishers making money. But e-books have complicated that calculus because any digital transfer creates a new “copy” of the work, and as a result, third-party secondhand e-book sales (along with other secondhand digital media sales) have faced serious legal challenges with this.
Physical books have always had a built-in advantage for students, who can buy or sell them secondhand to defray their often costs, without the publishers taking any of that money. Allowing e-book resales could make that advantage less dramatic.
Like many mainstream crypto applications, NFTs don’t bring an obvious technical innovation. Although crypto ledgers track an item’s ownership from “owner A to owner B to owner C,” but this has always been possible using a digital database. A blockchain offers a decentralized version of that database, but the odds of Pearson using a fully decentralized, open system are approximately zero. It would almost certainly extend an existing copy protection scheme to stop non-NFT owners from pirating its books. That would make the NFT a fig leaf on top of an old-fashioned digital rights management or DRM framework. NFTs can theoretically be sold on third-party markets which aren’t approved by the creator, but big companies like Ubisoft certainly didn’t follow that principle, and Pearson may not either.
INDEPENDENT COMPANIES TRIED TO SELL EBOOKS SECONDHAND FOR YEARS
NFTs have had a real impact on the media world but mostly operate as a digital tote bag of sorts — something fans buy to support and feel closer to a favorite creator. They don’t control who can see a specific work — only who “owns” a token corresponding to it, and even that is often confusing.
Nothing can prevent Pearson or any other major publisher from allowing people to sell e-book licenses using non-crypto DRM. In fact, third-party sellers like Tom Kabinet and ReDigi have been trying to create digital secondhand markets for years. But publishers have been generally hesitant to open the door to digital resales, especially as they’re trialing methods giving book buyers even less control, including subscription services like Pearson Plus — which Bird described glowingly during the earnings call.
MAYBE NOTHING CHANGES AFTER ALL
So what’s changed? Possibly nothing. Pearson hasn’t committed to NFT textbooks, and Bird doesn’t lose anything by talking about the future value of a buzzy (if recently flatlined) new technology. A cut of a resold textbook is probably still less lucrative for Pearson than the subscription model currently favored. However, NFTs do seem to have a psychological effect by making people feel like they own something, even if the is fairly abstract. Textbook makers might see this as an opportunity to push digital markets in a new direction.
This could possibly be a mixed bag for students. On one hand, some resale opportunity is better than none but on the other, a publisher-controlled resale market will almost certainly be tilted to the publisher’s favor.
Library e-books have self-destructed conditions requiring buying new copies after a certain number of checkouts, for instance. An NFT e-book could have a similarly limited number of resales. On a more abstract level, it creates a real legal debate over whether people should have the right to control their digital purchases and adds yet another incentive for publishers to make buying physical textbooks as unpleasant and difficult as possible. This is because, from their perspective, they would be just losing money on them.
Either way, Bird says Pearson has “a whole team working on the implications of the Metaverse and what that could mean for us” — and if they have to earn their keep somehow, which would mean NFT books make more sense than things like Fortnite skins.