Unveiling the Future: How AI is Reshaping the Publishing Industry with Jane Friedman

00:00:01 - Boni Wagner-Stafford
So what is going on in the publishing industry? Well, from the implosion of hybrid publishing giant Scribe Media to resignations in the upper echelons of Canadian book retailer giant Indigo, to how AI is both making our lives easier and harder for authors and publishers, it seems to me that looking at these three big issues, all have one theme in common trust. What can we trust? What can we trust that is happening that will always happen? And where can we turn for publishing industry information we can trust? For this episode, I'm joined by longtime publishing industry commentator Jane Friedman, publisher of The Hotsheet.

00:01:26 - Jane Friedman
Thank you so much for having me, Boni.

00:01:29 - Boni Wagner-Stafford
Thank you, Jane. And welcome to the Ingenium Books podcast So I didn't want to suggest that you are the go to source of all the inside details on some of those things that I talked about in the introduction. But let's just talk a little bit about what we do know and let's start with what was happening and what you reported recently in The Hotsheet about Scribe media. In fact, pause there. I want to come back to that. I want to talk about the hotsheet. First of all, for listeners who don't know what the Hot sheet is, can you tell us what it is and how you got started in it?

00:02:13 - Jane Friedman
It's a paid newsletter. It was started in 2015 before the whole substac thing even existed. And it was started as a partnership with another journalist in the publishing community, Porter Anderson. I've been running it myself since 2019 and it comes out every two weeks. And its purpose is to help people navigate all of the conversations that are happening around books, publishing, writing, authorship, earnings, whether you're traditionally published or self published. My hope is that it saves people time so you don't feel like you're going to miss out on whatever people are discussing on Twitter or whatever social media platform it might be. And then it also points you to analysis perspective on these issues because many of the things like we're going to talk about today, it didn't happen overnight. They've been years in the making. So I like trying to give people that perspective.

00:03:09 - Boni Wagner-Stafford
Yeah, which makes perfect sense. And I think it does really fill that role, which kind of speaks to the trust part of the things. That the issue that I see threading those big issues that I outlined, which is that you've got the history and the experience watching the industry and we can trust what you say. You've got the chops behind you and you're in the rooms either conferences or talking to the people who do have some insider knowledge. Anyway, that said so now back to the scribe thing. We're not going to go into detail about it, but it is something people are talking about. It is a disturbing set of circumstances for authors and the people who've lost their jobs. Absolutely. But what does it tell you about, if anything, about what's happening in the publishing industry right now?

00:04:10 - Jane Friedman
Well, I know it has the hybrid publishing side of the industry very anxious and pretty upset because it doesn't reflect well on the landscape of hybrid publishers. Now, this is a company that started quite some time ago, I want to say around 2014 under a different name. It was started as Book in a Box and it's a bit of a unique company in that it's also a ghostwriting firm in some regard. So it's not even exactly what I consider a hybrid publisher, although there are some hybrids that offer ghostwriting services too. So they had like a lot of irons in the fire. Right? Well, the people who founded that company departed a couple of years ago and what I see is just really terrible management, terrible choices, as far as we know, although I don't have any insider knowledge, the company was pretty healthy, was on a strong foundation when the leadership baton was passed, when it was sold. But since then it hasn't gone well. And there was actually just the other day a new owner announced a new leader and I guess we'll see if they're able to keep any of the commitments. But it looks pretty bad.

00:05:32 - Boni Wagner-Stafford
Yeah. So how you're not in the business of predicting the future, but any thoughts on how this may shake out and change things for the hybrid publishing model or those people like us? Ingenium Books is a hybrid publisher, those of us who are working in the hybrid model.

00:06:00 - Jane Friedman
As someone who tries to stay calm in these situations and I don't know that it has anything meaningful to tell us about hybrid publishing. I don't know that it will necessarily change anything about hybrid publishing now. It might change how authors choose to engage these companies, like they might stop paying the full amount up front. I think there was some maybe unwise choices, people putting too much trust in this company to fulfill their agreement. Whenever you're paying tens of thousands of dollars, you want to do it in stages. Typically this is not to blame the people who got caught at all, but whenever you're signing these contracts, you want to have ways to back out and ways to preserve your money if the services aren't delivered. For those who are thinking about using a hybrid, that's what I would keep in mind.

00:06:58 - Boni Wagner-Stafford
Yeah, that makes sense. Something from the other side which is the retail landscape. And I just mentioned about the top resignations in Indigo, which is Canada's biggest book retailer. Arguably, anything in there that gives us a look at or gives us information about what's happening in the book retail space?

00:07:28 - Jane Friedman
Well, by and large, bookstore chains haven't fared that well, regardless of the country you're looking at. So US. Barnes and Noble was taken over by private equity in 2019. Some people think that will happen now to Indigo in Canada. In the UK waterstones, the big chain is owned by the same private equity group that owns Barnes and Noble and is led by the same person, James Daunt. With Indigo in particular, though, it's a little bit different because some years ago, and I'm not going to remember the precise year the CEO decided to turn Indigo into something of a lifestyle store. So in practice, what this meant was about half the sales weren't books anymore. It was other stuff blankets, pillows, candles. And I don't know that that has turned out so well for Indigo. And there was recently well, first of all, the CEO stepped down last year, was still on the board, but now is retiring even from that, many of the board members have left. And so there's actually a really great historical perspective on Indigo from Kenneth White, a Canadian publisher. He has a substac. I would highly recommend it to anyone interested in keeping up with Canadian publishing and the Indigo debacle because he has opinions. But also, I think he gets into the ins and outs of why did this happen and what might be next. But yeah, certainly from where I sit, barnes and Noble is looking like a success story when you compare it to Indigo.

00:09:13 - Boni Wagner-Stafford
Yeah, very interesting. I didn't also want to be talking too much about AI, but we just can't ignore it. It is so prevalent, not just in publishing, but every industry everywhere. But let's talk about it from a publishing perspective. It is both making our lives easier and harder. Easier from the perspective of, oh, I can put in Chat GPT. Can you make my sales copy better and out pop something that on first blush, it's like, okay, I need to do a bit of editing that, but I can see where it's actually better to making us more concerned and careful about things like copyright and authenticity. So what do you think we should be thinking about AI? Is this something that we should be dragging our feet about, or is it keep your eyes open and dip your toe in carefully? What would you say?

00:10:15 - Jane Friedman
Well, if I look out, let's say ten years, 20 years, 30 years, I do think that the AI tools we're seeing right now are going to advance tremendously and become a really inevitable part of everyone's publishing process. And I would compare it maybe to word processing and desktop publishing in the it's funny, I was just giving a talk about AI specifically and some of the copyright issues and also trying to address some of writers fears surrounding this. And so to do that, I actually went back to some of the articles that the New York Times published on the advent of word processing. And there was a big article where someone who was a woman was very fearful that this would result in decreased earnings for all of the lady typists out there because now everyone would be typing their own documents. We tend to be very pessimistic about new technology. Now, granted, there are some people, I think currently who are overhyping it, and that's not helpful either, right? So I think as of today, it's obviously so early. But the copyright issues, the questions raised here are tremendous. And I think copyright law is going to have to transform or we're going to think very differently about copyright in the years ahead. So there are three questions. One is the models that are scraping data or ingesting books or whatever it is they're using, is it copyright infringement that they've scraped all of this data? Second question is the outputs, are they infringing? So even if the inputs aren't infringing, are the outputs infringing? And then the third question is, if you create something using these tools, can you get copyright protection? So each of these are distinctive questions, and the courts may answer them very differently. Of course, it's already moving through the courts. Now, we can delve into any of those questions if you like.

00:12:46 - Boni Wagner-Stafford
Oh, I definitely would like, because we 
always seem to be, because of the nature of how public policy works, that that is a slower process than the technology is moving. Social media is a case in point. We've got in Canada. The recent laws that were designed to help support Canadian media now result in Facebook saying we're not publishing any news on our platforms in Canada. So it's actually making it harder for Canadians to access reputable news. It's not the intention, but you can see where the policy and legal side is behind where the technology has advanced. Not that that is the reason that that scenario that I just mentioned in Canada has existed that way. But we don't really have time. We have to be looking at copyright law now, and as you say, it's already before the court. So let's take a look at the first question that you raised, which is, is there copyright infringement with the way the AI tools are scraping now?

00:14:03 - Jane Friedman
Right. And I think this is what I see the most, fear and outrage among writers. Oh, my work is being ingested without my permission. And I can understand that, but we have to take a step back. And this data as such is only valuable in aggregate. So there's a quote that data is like sand, not oil. So you're hanging on to your two or three grains of sand and withholding them from the model. I don't know how much the model cares.

00:14:43 - Boni Wagner-Stafford
Yeah, right.

00:14:45 - Jane Friedman
And it's still going to do its thing whether you withhold it or not. But also we should look at the Ingenium Books scanning case for maybe a hint of how this might go. So for those who aren't aware of it, this was in the mid two thousand s google one was working with libraries to scan as many books as possible with the library's willing participation. So that when you run a search, you would be getting the benefit of answers from books or knowledge that can be found in books and isn't necessarily found on a website, potentially for the greater benefit of humanity. Right, but it also enriches Google. So Authors Guild among I can't remember if there was someone else on that lawsuit, but they fought years to stop this and ultimately failed because the courts found that while, yes, they were creating these replicas of books, essentially the use was transformative and thus it was fair use. And so Google won, but not after a lot of wasted time and energy and money trying to fight them on this. And I don't know, it's not that Google in its results was going to show you the full book or give you access to the full book. It's just a snippet, a search snippet. And if you really wanted more, you were going to have to either get the book from the library or purchase it. So to me it just felt very holding on much too hard to things that you weren't going to get money. It's not like you were losing the value of the work if Google was showing a search snippet. Now, I realize some people disagree with me on that, but okay, I think that there is really a direct parallel here with what we're seeing with these large language models ingesting and then there is this transformative use. Now the exception being which brings us to another question, if the output is infringing, and you can definitely see there are some cases where it feels like that could be the case, especially with images like artwork and illustrations. And Getty is one of the big companies now with a lawsuit. So to me this is maybe a tech issue where these models need to be more tightly controlled so they can't possibly output something that's infringing. It could also be an issue of they've only ingested one or two sources that relate to your question or what you're trying to prompt it to do. And so of course it's just kind of, sort of lifting up the only source that it has and so the model needs to be stopped from doing that. And those are all like fixable problems. But I think the larger issue I think we all probably have with these is that there's just no transparency. Like we can't see necessarily what's happening. There isn't transparency. And I think everyone would probably maybe loosen up just a little bit if we felt like we were all in this together and we weren't going to just see the rich people get richer off of these models and technology.

00:18:04 - Boni Wagner-Stafford
Right. Your third question was, I can't remember.

00:18:09 - Jane Friedman
Now, can you copyright that?

00:18:12 - Boni Wagner-Stafford
Yes.

00:18:13 - Jane Friedman
Right. I think to me, this is the most fascinating piece of it because there's already a case that came up in the United States before the Copyright Office for a graphic novel. And what the author had done is she wrote the story, but used one of the AI art tools to generate all of the illustrations, and she submitted it to the Copyright Office, which has a policy or a rule, like you can only copyright something if you're a human being. You can't copyright something that's machine generated, and it gave her a copyright certificate, not knowing that the images were Aigenerated. It came out later. That was the fact. And so the office rescinded the certificate for just the images, not for the writing, not for the arrangements. Like she could copyright the arrangement of the illustrations. Now she has a lawyer and they're trying to fight this because it's not like she went to this tool and said, spit out an image, and then she just took it and used it. She went through a multilayered process, like hundreds, if not thousands of revisions and attempts to get exactly what she wanted for her book. And of course, for every page, you're going to have to do that over and over again. And it would be exceptionally difficult for someone to produce the same results. They would have to know the prompts she used. They would have to know how she might have edited the images herself in Photoshop to go the extra mile. And the analogy here is to cameras and photography. So when cameras and photography first existed, artists, painters, they did not want to see the camera's output be offered any protection. And there was a very similar kind of concern that humans were being devalued by this machine. But of course, eventually photographers and cameras won out and you can copyright photos. And I wouldn't be surprised if something similar doesn't happen here. Because the tool, when you think about it, is not so different from using a camera. You're telling it the framing, the light source, the style, and all sorts of other variables that are like pointing a camera. And then you have to edit it and make sure that it fits the purpose for which you have intended it.

00:20:42 - Boni Wagner-Stafford
And then if we think of that same approach, supporting a writer, the prompt that you put in, the clarifying feedback that you give it back to ask for a revision, you can see that it's not that big of a stretch. My prompt about dogs is going to be different from your prompt about dogs. And therefore what's generated is a direct garbage in, garbage out. Except, of course, we're not putting in garbage. When we're writers, we're putting in specifically an attempt to get out what we are looking for. So interesting analogy.

00:21:27 - Jane Friedman
Yes. There was a great article in the Atlantic some weeks ago by Stephen Marchet. He wrote and published a novel called The Death of the Author tongue in Cheek. He used three different AI tools to basically generate that novel, although generates not really the right word. I mean, he was using each tool for its strengths and then kind of weaving together something that he thought worked the best. And when he wrote that Atlantic piece, he was describing the process he went through and he wasn't negative about it at all. It took work. This was not just a click once and out pops a novel. He was an active participant in writing this novel with the assistance of this tool. And so just like word processing and desktop publishing are now kind of integrated into our work process, I could see authors choosing to integrate it or not. I think there's still going to be purists. There always are purists and then other people will really welcome having that as part of either the brainstorming or the editing or coming up with a better revision or a better draft.

00:22:46 - Boni Wagner-Stafford
Yeah, makes sense. I'd like to move on to another area now which is of interest to me. I don't know if it's of interest to anybody else, but it's the notion of whether publishing is more global and going more global or less global and coming back to local. And I'm reminded of in the days before, internet and shopping and buying and producing products was very much more, I think, geographically closed. Not necessarily closed, but what was produced and sold in one market didn't necessarily sell in another market. And publishing to a large degree, it's still like this in some sectors. Not so much on the self publishing front, but a little bit more still on the traditional publishing front, where a book's cover will be different if it's going into the UK market versus whether it's going into the American or North American market. But I think we've seen desktop publishing, the Internet and Amazon and these global sellers and distributors where publishing really is a global exercise. But is it changing? Is that a true perception? What do you think about that?

00:24:18 - Jane Friedman
Well, I don't mean to bring AI back into the conversation, but I think it will affect this question because of AI translation. So the US market in particular has always been a market where it's tough to sell translations and it's also very expensive to produce them. So if you can't sell them, a lot of publishers aren't going to invest in doing them. But if you bring the costs way down, I think that opens up some tremendous opportunities for authors who are currently outside of the US market, looking in writing in other languages and would really like to get into the biggest book market in the world. So I think that's going to benefit people outside of the US. I recently heard, and this was like within the last two days from someone in the children's sector, children's publishing, that editors and agents are now much more accepting of books that are set outside of the United States. We're better able to sell those books in the US. Market. So even if you are writing in English, but you want to set your book somewhere that's not American, it's much easier today to do that than it ever was. But on the flip side of that global piece, I do see a kind of return to local bookstore purchasing support of the local indie people more interested in making connections locally and regionally for their book buying and for book communities, so book clubs and so on. That's not to say that there still aren't the zoom sessions connecting people across the world to talk about books, but I do think people are the indie support is just way up in the United States and I don't expect that to go away.

00:26:17 - Boni Wagner-Stafford
Yeah, which is interesting because the ability to get a book up on a platform like Amazon and know that a shopper or a potential buyer can find it and buy it whether they're in Italy or the Netherlands or Japan or the US. Or Canada or wherever. I think you can see how some authors may have lost sight of the importance of putting on their shoes and walking down to the corner bookstore and the corner library and walking in with their sell sheet and introducing themselves. There's still value in that. And that is the end of part one of two podcast episodes where we're talking with Jane Friedman, editor of The Hotsheet. Tune into part Two where we are going to talk about the questions that authors ask Jane most frequently, like how do I publish my book? What route to publishing is right for me? How do I find an agent? And if I only have X amount of money for marketing, what should I do? We are going to talk about those issues and more of relevance to indie authors with Jane Friedman coming up on part two. And you can learn more about Jane@Janefriedman.com, where you can learn about her courses and her editing and of course, where you can subscribe to The Hotsheet. Thanks for listening. If you enjoyed this episode of The Ingenium Books, please like, share and subscribe subscribe wherever you get your podcasts. But also consider subscribing to our YouTube channel where you can see these episodes in addition to hearing them.