Story Protocol’s immutable digital repository for mental property would give novice devotees enter into films, books, video games and music. It may additionally present a blueprint for copyright holders wanting safety from synthetic intelligence.
By Mitchell Martin, Forbes Employees
The web gave fanfiction a shot within the arm, making it straightforward for writers and readers to seek out one another and obsess over their favourite characters. Synthetic intelligence is placing it on progress hormones, permitting straightforward animation and providing plot strategies of its personal.
The following step is likely to be nirvana for fiction fanatics. What if devotees of Hercule Poirot or Buffy Summers may revenue from spinning new tales and affect the official evolution of beloved characters and tales slightly than constructing on the work of authentic authors as an unpaid labor of affection?
Seung Yoon Lee thinks that’s fascinating and inevitable. A serial entrepreneur with an Oxford diploma who has by no means labored full time for anyone else—and a member of the Forbes Asia 30 Underneath 30 checklist from 2016—Lee has raised $54 million of financing, together with $25 million introduced this month for his begin up Story Protocol. The funding was led by Silicon Valley venture-capital heavyweight Andreessen Horowitz and included Samsung’s enterprise unit; impresario Bang Si-hyuk, whose firm manages the Korean boy band BTS, and North American singers Justin Bieber and Ariana Grande; TPG co-founder David Bonderman, and socialite Paris Hilton’s 11:11 media firm.
Story Protocol is a blockchain-based repository system that permits creators to just accept and encourage contributions from their audiences. Fan-fiction producers may present enter working from thought technology to approved tales. The chance spans the complete worldwide leisure and media sector, which the accounting and consulting agency PwC estimated in June to have had $2.3 trillion in 2022 income. The mixture of films, tv and streaming accounts for nearly $500 billion of annual gross sales, adopted by gaming at $213 billion, books $66 billion and music, the place the Story Protocol system may very well be helpful in relation to remixing songs, $61 billion.
Andreesen Horowitz, also referred to as a16z, additionally led a quietly raised seed spherical of $29 million that was introduced in Could. “Their imaginative and prescient for fixing a number of core issues plaguing the media and leisure business is what actually satisfied us to double down—monitoring provenance, cataloging IP, and incentivizing remixing and new types of creativity,” Sriram Krishnan, basic associate at a16z Crypto, tells Forbes. Neither he nor Lee would reveal the general valuation of the startup implied by the financing thus far.
The system begins with a repository for mental property that’s much like GitHub, a collaboration and internet hosting service for pc applications. Andreessen Horowitz was an early backer of the corporate, which is now owned by Microsoft.
Lee says that the Story Protocol repository will likely be held on the Ethereum blockchain, offering international entry for a lot of sorts of mental property—together with literature, video and music—with phrases ruled by self-executing sensible contracts. Lee, who goes by S.Y., says that may enable for fast communication amongst collaborators and might minimize conventional intermediaries out of the equation. These registering mental property want by no means work together with the service past that, however Lee says many will need to.
“As soon as the IP is captured on the blockchain,” he says, “it grants the proprietor full management, together with setting licensing or remixing phrases with only a few clicks as an alternative of hiring a whole staff of legal professionals.
These transactions are a method Story Protocol plans to earn cash, charging “a small share” of every utilization. Lee says, whereas the repository will likely be free. For now, the corporate is engaged on constructing out its expertise, he provides, and different revenue alternatives could come up “by means of worth captured” by “facilitating financial exercise.” There are “some ways to translate that worth seize, together with the mannequin Ethereum and Bitcoin adopted” by creating cryptocurrencies, however he wouldn’t present additional particulars.
‘What was once a distinct segment subculture of fan-fiction and fan-art restricted to a couple web sites will flood each main social platform.’
What makes his proposition well timed is the disruptive impact that the wedding of synthetic intelligence and fan-generated content material is prone to have, particularly on visible leisure. AI will enable such materials to develop “exponentially in amount and high quality,” Lee wrote in an electronic mail. It should overwhelm copyright holders’ skill to police using their materials. He factors to AI-powered spoof commercials based mostly on fictional characters, equivalent to a current commercial for luxurious trend home Balenciaga that’s based mostly on J.Okay. Rowling’s Harry Potter sequence, which has gotten 10 million views on Youtube, as proof that the expertise is sort of able to compete with Hollywood.
“What was once a distinct segment subculture of fan-fiction and fan-art restricted to a couple web sites will flood each main social platform, with the manufacturing price of ‘ok’ content material trending to zero,” in line with Lee. “Manufacturers and IP house owners can have no alternative however to react swiftly.”
The array of buyers backing Story Protocol signifies that Lee could also be on to one thing.
“We’re seeing that a few of the most inventive concepts on the web do not get translated into longer codecs, like films and TV,” says a16z’s Krishnan. “Right this moment, we see many remakes of previous reveals or comedian e book sequence as an alternative.” He attributes this to mainstream mental property remaining “gatekept and read-only regardless of multimedia franchises attracting a few of the most avid and imaginative communities.”
Billionaire David Bonderman of TPG is financing Story Protocol for his personal account. He tells Forbes by electronic mail that he’s investing in the concept mental property is due for a shakeup. “The playbook on the right way to construct the subsequent blockbuster franchise and sourcing authentic IPs is altering quickly. No person is aware of what’s going to stick.”
That fast change displays partially enhancements in AI image-realism, animation and textual content technology combining to threaten the big-business mannequin that dominates content material manufacturing, in line with Lee. Quickly folks will be capable of mix these in order that “you may have an entire story with top-tier illustrations and a 30-second teaser video in a matter of weeks, if not days.”
Lee is joined by co-founders Jason Levy, who will likely be chief working workplace, and Jason Zhao, who’s main improvement of the particular protocol behind Story Protocol. Levy has expertise in cell leisure and spent 5 years as an Apple monetary analyst, Lee says, whereas Zhao is a techie who has studied philosophy.
David Goyer, a filmmaker and novelist who wrote the Blade and Darkish Knight trilogies, has signed on as an advisor.
S.Y. Lee is the 32-year-old son of orthopedist father Hong Kun Lee and Sung Hye Jung, a professor of trend design and textiles at Inha College in Incheon, South Korea. Each of his grandfathers had been entrepreneurs, he says, however their companies in the end failed. His dad and mom took skilled jobs in consequence, they usually wished the identical for his or her son, though his mom retired from academia and now runs an organization that makes scarves.
Lee started his profession in Washington in the summertime of 2008, unbitten by the entrepreneurial bug. He was residing with an aunt in Virginia and wrangled an internship with Bobby Scott, the Democrat who has been representing the state’s third district since 1993. Lee was growing a fascination for politics, and he spent the subsequent summer season interning at South Korea’s Nationwide Meeting in his native Seoul.
One takeaway from his experiences within the two nations was that South Korea on the time was “extraordinarily Americanized,” and Lee felt he ought to get a European perspective. That led him to Oxford College, the place he earned a bachelor’s diploma in philosophy, politics and economics in 2014. He took 4 years to graduate as an alternative of the standard three as a result of he spent most of 2012 as president of the Oxford Union, an unbiased debating society whose members are primarily from the college. Earlier presidents embody former British Prime Ministers William Gladstone, Edward Heath and Boris Johnson; Benazir Bhutto, the previous prime minister of Pakistan; and William Rees-Mogg, former editor of the Occasions of London.
The Oxford Union gig allowed S.Y. to host visitor audio system like former Senator John McCain, PayPal co-founder Peter Thiel, and Psy, the Korean rapper with the then-hit Gangam Fashion video, increasing his contacts within the worlds of politics, finance and leisure and altering his profession route. “Politics was very emotionally draining,” he says, and he grew to become “very all for entrepreneurship.
By the summer season of 2014, Lee discovered his calling . He had been writing freelance interviews for the Korean day by day JoongAng and had come to consider that the “advertising-driven mannequin of journalism was damaged.” Lee stated he got here up with the concept of an internet interface “to match readers with journalists”by letting customers finance writers that they appreciated. This focused crowdfunding mannequin grew to become Byline.com, which launched in 2015, with about $850,000 of financing that included contributions from actual property billionaire Nicolas Berggruen–who Lee hosted on the Oxford Union and who has invested in Story Protocol–and Jaewoong Lee, founding father of Daum, a South Korean net portal now owned by Kakao Leisure of Seoul.
Byline nonetheless exists in a special kind, however Lee has stepped away as a result of it “didn’t scale the best way I had hoped.”
The issue, he says, was that readers had been paying writers to inform them what they wished to listen to, slightly than what they wanted to know. The location grew to become a political echo chamber. In 2016. Lee and co-founder Daniel Tudor turned the Byline’s belongings over for “a tiny amount of cash” to journalists Peter Jukes and Stephen Colegrave, who agreed that “crowdfunding alone wouldn’t help unbiased journalism,” in line with a March 2019 posting on the location. The enterprise has now turn into a month-to-month newspaper referred to as Byline Occasions with restricted crowdfunding, and it has a number of affiliated corporations.
Lee already had a brand new thought able to go, Radish Fiction, which was developed beneath the identical company entity that had owned Byline and carried over a few of its tech staff. lt introduced serialized fiction to cell gadgets in the US, following a apply that had beforehand developed in Asia. “As a South Korean, I noticed cell studying of serialized fiction and comics blowing up in South Korea, Japan, and China,” he tells Forbes, “nonetheless I assumed the U.S. was going to be a latecomer to this pattern as a result of readers switched to Kindle first earlier than getting used to cell studying. I assumed the U.S. would finally all learn serial fiction and comics on the telephone, and there was already proof of its enormous recognition from fan fiction web sites to common on-line serial works from Fifty Shades of Gray to The Martian.”
Radish, launched in February 2016, initially supplied user-generated content material however now concentrates on serialized fiction designed particularly for its app. It makes a speciality of romance and fantasy fiction, two genres which can be amenable to serialization and that Radish fine-tunes to reader demand. The preferred tales are up to date essentially the most usually, a number of instances a day when customers are binging, and readers who need to get new chapters as quickly as they’re printed pay further. Costs range relying on a number of elements, however the price per chapter is within the 30-cent vary.
The thought shortly took off, touchdown Lee on the Forbes Asia 30 Underneath 30 checklist for 2016. Radish raised about $3 million in funding by the tip of January 2017, in line with Crunchbase. One other $63.2 million got here in an August 2020 Collection A financing spherical, led by SoftBank, which was used to develop its writing and market staffs. Lower than a yr later, Kakao purchased the complete firm for $440 million.
That left Lee with a pocketful of money—within the”nine-figure” vary, he says—but in addition with a rising sense that the leisure business wanted a brand new enterprise mannequin. “One of many challenges I had with Radish—and in addition Byline—was that you simply not solely must put some huge cash into content material however into advertising that content material,” he tells Forbes. Radish’s advertising prices soared after Apple modified its privateness guidelines to require customers to opt-in to having their exercise tracked.
He says there’s already a “superabundance” of fabric on the web. Synthetic intelligence is about to carry way more.
Not solely is Lee out to create networks, he’s looking for the community impact, the concept a system turns into extra worthwhile because it has extra customers.
Story Protocol is crafting a expertise that may enable content material creators to staff up with their followers to hasten the manufacturing of recent works, with fictional franchises such because the Marvel Cinematic Universe or Stephen King’s Mr. Mercedes spinoffs particularly fertile floor. Proper now, the corporate is growing its blockchain-based repository, which exists to register mental property that copyright holders select to submit.
On high of that may come purposes generally known as modules to permit features to be carried out with that IP, equivalent to licensing, royalties, monitoring of spinoff works and authorization to remix music. Lee says he expects the primary modules to seem by the tip of the third quarter of 2024. Whereas Story Protocol will design an preliminary set, third-party builders may also be capable of add their very own.
His thought is to make mental property right into a form of community consisting of followers and creators. The followers turn into greater than shoppers, they will add to or remodel the property and even finance it, with the blockchain offering an environment friendly monitoring mechanism of additives and edits to every property in addition to the phrases of funds or investments.
Eva Lau, who along with her husband Allen co-founded the WattPad storytelling web site—a competitor to Radish—says that the community impact can work in numerous methods. Folks create issues like “songs for tales and fan artwork, impressed by the principle artwork,” she says, and these sorts of contributions may very well be added to the repository, extending the model.
Blockchain expertise, which creates immutable ledgers, is properly suited to monitoring developments in an data repository, provides Lau, who along with her husband runs Toronto-based Two Small Fish Ventures, one of many Story Protocol seed-round buyers.
Not solely is Lee out to create networks, he’s looking for the community impact, the concept a system turns into extra worthwhile because it has extra customers. He developed the concept of linking followers and creators after changing into annoyed with the “unsuitable enterprise mannequin” of content material corporations, and he got here throughout analysis from Andreesen Horowitz that echoed his ideas, which inspired him to hunt backing from the agency.
A Franchise Yr: Prime U.S. Films in 2022
Hollywood is counting on sequels and spinoffs to energy box-office receipts. Story Protocol’s system may enable them to reinforce their output with contributions from followers.
As proof that conventional studio-driven leisure construction is in bother, Lee factors to the checklist of high 10 U.S. field workplace attracts in 2022, all of that are elements of film franchises. The checklist was led by Prime Gun: Maverick, which grossed $718.3 million, in line with Field Workplace Mojo, and was the sequel to a movie that debuted 36 years earlier than. “Studios simply throw all their funds behind what has labored,” he stated in an electronic mail. “Nobody desires to take dangers.”
‘It’s often unhealthy enterprise to sue your greatest followers.’
Fan fiction is sort of as previous as fiction itself. Who was Jupiter if not a brand new tackle Zeus?
A lot of the style is predicated on characters from tv and literature sequence or film franchises. Earlier than the web, it generally appeared in fanzines, which had been sometimes mimeographed or photocopied pamphlets a couple of particular subject with numerous articles together with fiction. Star Trek impressed one of many earliest efforts based mostly on a mass-media property, a title referred to as Spockanalia that premiered in 1967, the second yr of the tv program’s earliest incarnation.
The world vast net supplied authors a option to attain many extra readers than small-run print publications, and a way more handy path to creating communities amongst followers of fictional sequence. Not-for-profit websites like FanFiction.Web and Archive of Our Personal enable authors to put up their works, and Wattpad, a website for novice writers that was offered to South Korea’s Naver for $600 million in 2021, has a fanfic part that’s excluded from a number of compensation plans obtainable to authors in different classes. All of them say they don’t enable materials that violates copyright safety.
Some works start as fan fiction, however by means of a course of generally known as “submitting the serial numbers off,” authors can retool them to be sufficiently nonspecific to skirt copyright restrictions, in line with Rebecca Tushnet, a Harvard Legislation College professor who makes a speciality of mental property points. “Loads of folks have created their very own variations of the Star Trek’s Federation and alien races (Seth MacFarlane’s The Orville is a good TV instance), and Fifty Shades of Gray has an analogous plot construction to Twilight however no vampires.”
Fifty Shades, a e book that follows the connection of a current graduate and a businessman a number of years her senior in opposition to a backdrop of erotic practices, was the primary in a trilogy that additionally spawned a film trilogy and three spinoff novels. The films alone have grossed $1.3 billion, in line with Field Workplace Mojo. However that’s atypical. “Non-commercial fan fiction has its personal ethos and norms that do not intersect properly with for-profit endeavors and company oversight,” Tushnet tells Forbes by electronic mail.
The “overwhelming majority” of fan fiction is noncommercial, main many copyright house owners to tolerate it—particularly as “it’s often unhealthy enterprise to sue your greatest followers,” says Tushnet, who’s related to the Group of Transformative Works, which backs Archive of Our Personal.
The late Anne Rice, whose Interview With the Vampire novel in 1976 spawned a slew of novels within the undead style, didn’t like amateurs muscling in on her work. “I don’t enable fan fiction,” she wrote in a missive round 2000 on her web site. “The characters are copyrighted. It upsets me terribly to even take into consideration fan fiction with my characters. I counsel my readers to write down your individual authentic tales with your individual characters. It’s completely important that you simply respect my needs.” Rice, who died in 2021, moderated her stance in later life however the denunciation stays on her website.
Others take a special tack. Paramount World, producer of the Star Trek franchise, desires “novice fan filmmakers to showcase their ardour for Star Trek” so long as they’re comparatively brief and non-commercial. It has a listing of different necessities posted on its web site, together with a mandate that no bootleg Star Trek merchandise can seem.
There’s a little of the Story Protocol thought in Paramount’s method, however it’s a one-way communication. The studio proprietor is telling fan-fiction creators what they will do, however they don’t have a simple option to reply. Nonetheless, its checklist of necessities is one thing that may very well be written into a wise contract that may enable noncommercial work to seem with out concern of copyright repercussions.
Story Protocol buyers appear to be investing in Lee as a lot as his firm. Bang, the Korean expertise supervisor, likes that “He listens fastidiously to others and has no concern of making use of what he has discovered from what he has heard.” These are essential qualities when you’re making an attempt to disrupt a $2.3 trillion enterprise sector.
Bonderman’s funding took place by means of his acquaintances who knew Lee, together with long-time backer Berggruen. “Though I’ve identified Seung Yoon for a short while, we have now buddies in frequent who’ve identified him from his Oxford Union presidency days,” the TPG founder tells Forbes. “Like them, I discovered Seung Yoon’s intelligence and ambition evident.”