Interview mit Kaleeg Hainsworth von Legible Inc.

Hochinteressantes Interview mit Kaleeg Hainsworth von der Firma Legible. Das deutsche Transcript folgt in den nächsten Tagen.

Über Legible Inc.

(CSE: READ) (OTCQB: LEBGF) (FWB: D0T)

Legible ist ein auf Bücher spezialisiertes Unterhaltungs- und Medienunternehmen, das es als seine Aufgabe sieht, Milliarden von Leser weltweit mit Millionen von Büchern zu versorgen. Dank Legible kommt jeder Nutzer eines internetfähigen Geräts über das innovative eReading jederzeit und überall in den Genuss eines völlig neuen Leseerlebnisses.

Legible hat mehrere hochwertige Geschäftsbereiche geschaffen: eine browserbasierte B2C und B2B-eBook-Unterhaltungsplattform für mobile Geräte, die einen internationalen Online-Buchladen mit rund 2 Millionen Büchern in einem Lesesystem für das zukunftsorientierte Web mit hohem Wachstumspotenzial namens Legible.com unterstützt, und ein internationales B2B-eBook-Konvertierungs- und Produktionsservice mit hohem Umsatzpotenzial namens Legible Publishing. Legible revolutioniert die digitale Verlagsbranche und sichert sich als Anbieter von innovativen Verlagsdiensten und globalen Leseerfahrungen für das 21. Jahrhundert entsprechende Marktanteile. Die zentralen Werte des Unternehmens sind Erreichbarkeit, weltweite Alphabetisierung und Nachhaltigkeit.

Ich bitte die durch eine  Erkältung geprägte Stimmqualität zu entschuldigen.

Transcript

Welcome to a new edition of the AktienTalk. I am happy to welcome Kaleeg Hainsworth from Legible as a guest. I have of course conducted the interview in English. However, there will be a German translation that you can download as a PDF. And now I wish you a lot of fun with the interview. In the recent past, the company has been thrilling us with spectacular news and most recently presented itself at the International Book Fair in Frankfurt. I'm all the more pleased that he took his time to talk to us. Hello Kaleeg, good to have you here.

I am very glad to be here, thank you.

Kaleeg, „Beautiful, accessible, sustainable, legible“ is the claim of Legible. What is Legible? What exactly is behind it?

Well, each of those words means something. And we say beautiful and we really mean that we want to make sure that the books that you access on the site are beautiful in and of themselves. I really think beauty is a very powerful actor in the world. And when something is beautiful and meaningful, it brings value to people's lives.

But the three key words that I would also put here is, accessible, sustainable and literacy or accessibility, sustainability and literacy. And, you know, accessibility is a problem, Marcus, that really goes across the whole publishing industry. And if you can solve the problem of accessibility, you solve so many issues that are faced by publishers today. And I don't just mean the ability for people to, who have reading disabilities to read a book, certainly that's accessibility. But I also mean more than that. I mean, the ability for anybody to access a book. How do you access literature and content? And it turns out that when you solve the problem of giving the most people in the world the ability to access content, then you also open up entirely new markets for a company to take advantage of, places and countries and parts of the world. And I think it's really quite a sad thing because the world, that have never had access before,  suddenly become accessible to your company. So accessibility is essential. And when I say sustainability, yes, of course. I mean, sustainable in the sense of a whole, you know, approach that takes the Earth seriously and understands the importance of using our resources wisely. But I mean it much more than that. I mean, a sustainable built environment, business itself? How do you make a business sustain itself over years and years and grow sustainably as well? Well, that's what I mean as well. And literacy, of course, well, everything that we do reaches towards literacy. And we see literacy as an incredible power to bring to the world as well. So that's really behind it.

A milestone for Legible was certainly the release of the Legible app for iOS and Android in the respective app stores. Please explain to us what the app does exactly and why the release of the app was so important.

It was so important because so many people really need the app and want the app. It's again, accessibility. We wanted to make sure all our books are not just fully accessible to anyone anywhere in the world with, you know, three taps of their finger and 10 seconds to get a book on the browser. But we wanted to make sure that people had access to the app. And we wanted to make sure that people had access to the app. And we wanted to make sure that people had access to those books in their apps. And those apps allow people to just have everything in their pocket, wherever they go. And we were able to take that content and make sure that that people can have both ebooks and audiobooks together. So really, we really wanted to be the apps to show what all that's possible and to make it even more accessible to people. But of course, you know, we made a promise, we'd come out with our apps and come out with our underwriting. And we made a promise to make it even more accessible to people. you know, we made a promise to make it even more accessible to people. And we made a promise to make it even more accessible to people. And you received a good and about subscription and, and we did we fulfilled that promise. And we're very excited about the product. I mean, the product is getting rave reviews, people are loving using legible and bound and the apps.

You're building up long listening humans story. We're really excited and happy about the welcome that this product is being had by our users versus any user was a block of ratos that readers and on the market too.

Is there any content that you only can access through the app.

Yes, we're developing an entire line and published public set of publications. I'd love to get into talking about our Stan Lee publications, but we're also producing a whole set of AI enhanced publications. And this is going to be exclusively accessible on Legible in our subscription membership program, Legible Unbound. And we're going to have a growing line of exclusive content to offer people. We really are working in the same way, I guess, that Amazon Prime and other companies work, which is we're producing our own content to make our Unbound membership even more attractive to our customers and to readers.

There's probably no denying that you offer and constantly developing something very exciting that will change the way we experience literature. We are talking about the living books. What do you mean by this? And what motivated you to develop this?

I'm so glad you bring that up. What motivated me to develop it to start there was a request by so many publishers over so many years, Marcus. They always wanted to be able to have a video in or to have some sort of audio content or to have something they can do on the website inside of their digital book. And it's a simple thing, but it's it.

It was never taken seriously by the main actors in the industry and was never allowed for various reasons I don't need to go into. So being able to develop it, you need a platform that can allow it to be these kinds of books to be had. What do I mean by living book? I mean, a book that has video and audio and animation and interactive features that are in the book. Here's an example of ways that authors can use a living book. For instance, when I launch a book onto the markets, I can be in the book with a video introducing the book to people when they show up to read it. I can have if it's this book, say about the public markets or stock markets, I can have live stock tickers in the book that that always work. I can have animation that helps people, you know, experience a particular page and so on. But it's really giving these creative opportunities to publishers and authors and artists. And at the same time, being a platform that allows people to access these books in and to have that full experience of a multimedia book without it being a gimmick. I'm very excited about our AI books as living books. We're about to release them. I'm very proud of them. And maybe I can take a moment, Marcus, just to share with you on a little bit of a deeper level, maybe like, not quite such a corporate level, but maybe we can talk a bit more creatively at the moment, about what's behind these living books and what we're releasing. And the first thing I want to share is, we're the work of creating these books. We are not, as I said, creating gimmicks. We want them to be very simple for people, they have to be books that are so easily used, you barely notice that they are different than books you've had access to in the past. You shouldn't have to think about this content, these videos are, you know, they're not going to be the same content that you have in your animation or the AI enhancements that we have in the book. They should just be built into the fabric and the experience of reading. And actually, always making sure that foundationally, the experience of reading is never challenged. I'm never distracted from reading, I'm only offered opportunities to enhance, or to understand, or to experience something the author is sharing in a more deep way than I have before. So we're really creating something quite, as I talked about before, beautiful, but it has a very market focus. Because if you make these books, something that is, that is, that really brings value to the experience of reading to people and doesn't distract from it, then you really bring something useful to your customers. And you then you really do have a high value product that can be embraced by a mass market audience. And that's really, how we're changing how people read and experience books by giving them integrated and easy to use multimedia experiences directly within the book embedded within the platform that they have this unlimited access to. Yeah.

How has AI changed the industry?

Well, I'll tell you it, the publishing industry doesn't change easily. And the publishing industry currently trying to figure out a lot of things around AI. And I'm worried that it's going to take too long for the publishing industry to really work this out. There is a lot of fear going on around AI and publishing. And I understand why. Legible is the first mover in this space. And the reason for that is we are still a, a young enough company that we can be agile. And also, because we started building AI into all of our services before AI became so popular in the markets. And so we already had an advantage there. So we, we have, you know, nearly 3 million books on our platform. And that puts us in a very, very unique position in the world to be able to use AI more powerfully for our customers. So we're using AI in constructive, ethical ways. This is important for me to say, because the moment we announced Librarian AI, which is a key product on the legible platform, we were very concerned, because if Hachette didn't agree with how we were using it, then they could take their books right off of our platform. And, you know, and so they did a thorough investigation of how we were using it. And they came to the conclusion, which is the exact conclusion we told them they'd come to, that we were using AI in fully ethical, meaningful ways. They had no issues with how we used it. And actually, we ended on really great terms on that discussion. And they were really proud of the work that we're doing, in fact. So that was a win for us. Now, the way that we are using AI is, first, there's a couple, but maybe… Maybe it might be better to say how we're not using it first. We're not using AI to generate books and content. That is something that we think is not only unethical at the moment, but it's also not interesting. Marcus, I bet if I asked you, I have two books. One is written by a human, the other is written by an AI, both about the same subject. I just have a feeling you're always going to prefer to read the book by the human. And that's why I'm not worried about AI taking the jobs of writers at all, because I will always want to read a human book, because I'm a human being, and I want to relate to... And books are about humans relating with other humans on whatever topic. What we are using AI for, however, is to give you access and more knowledge and learning tools to the content itself. So, for instance, we're releasing Animal Farm AI as an example very shortly. And that AI is going to allow you to... As you're reading the book, suddenly there's a little notification that appears inside the book, and it says, it's a hen, one of the hens that lives on the farm. And she says, can you believe what they just did to Boxer, which is one of the characters in Animal Farm? And you can click that notification, and suddenly you're having a conversation in a text message form with one of the characters in the book for as long as you want about any subject you want. And then you click out of it, and you're back into reading the book as it was written by George Orwell. So, these are ways that we're bringing AI in. In addition to that, librarian AI, which anybody can use on our legible platform now, including our apps, it gives you the ability to discover books, explore books that we already have. It will help you write your research papers that are based on books. So, it's an incredible research and discovery and conversational e-commerce tool for the company and for readers. So, those are just some of the ways we're bringing AI in. I will say that in our next version of our next update of the librarian, we're going to get rid of the sign-up form, Marcus. So, it will show up at legible to sign up for the, to sign up. It will just be a formless, it'll be a conversation. The librarian will say, nice to meet you. What's your name? You give your name. It will add it to, you know, and you'll sign up through a conversation. And when you end on the browse page after you sign up, all of the books that are shown to you on that browse page will be provided by the AI from our library, based on your conversation with the librarian when you were signing up. So, we're very excited about how we're using it and how we're going to be building it in the future.

One medium that has also gained massive importance and relevance in recent years is the podcast. Is this a format that is also interesting for Legible?

Yes, it is. We're working on that right now, actually. We have a collection, I think, of about 50 major podcasts we're looking at bringing on to Legible and offering as part of our Unbound subscription, as a matter of fact. We're very excited to offer that. We know how much podcasts mean to people. I'm sure it will be no surprise to you that the podcasts that we're bringing on to the platform for our Unbound members are podcasts centered around literature and authors and books. And even having guest podcasts from people who have written a big book that has come out and giving people that access to those podcast celebrities through our service. So, yes, we are.

Can you tell us something about the financial model that drives Legible? What are the revenue streams and what are the most significant cost factors?

Great. That's a great, great, great subject. So, it's one we think about all the time, of course. You know, Marcus, we built this huge foundation. Think about it really like a classical building. You have a strong foundation. We have three revenue pillars that hold up an open-ended roof. And the foundation are our products. The three pillars are our pillars of revenue. And the roof they hold up is a roof of monthly recurring revenue. That's the image I want to share in terms of describing this and answering this question. So, the foundation are things like Legible Unbound and the Librarian AI and our apps for iOS and Android and all of the other products that got into those, the bookstore, many other things. From that, we have three key pillars on that foundation. The first of those pillars is the transportation pillar. We are getting exclusive contracts in the automotive side of the business of that pillar. So, that means that we're working, we've announced we're working with Live One, who are an exclusive provider of music and podcasts to about six different automakers like Subaru and Tesla and Audi. And they are in the process of – and you know, those are the kinds of companies that they are providing access to. So, we have an exclusive partnership with Live One to be able to go to those automotives.

So, your software is implemented in the entertainment system of the cars? 

Yes, that is exactly correct. So, we'd be offering our audio books and eBooks, actually, because you'd be surprised that automakers, We want e-books for the infotainment systems directly within the vehicles, millions of vehicles. And we're working not only in that direction, but we're also working independently with other automakers and in discussions with other automakers as well. And we're excited to have a first mover advantage in this industry. And we are uniquely positioned for the automotive industry because we are a streaming platform and we have content and we have the ability to stream that directly into vehicles all over the world. And so we're very excited about those opportunities and the progress of them. On the transportation pillar as well, we're also in discussions with the largest transportation infotainment provider. We're also in discussions with a provider in the world about providing legible and its content, curated content directly to their customers on ferries and trains and bus systems around the world. So that's one pillar that we're working on right now. That's a B2B pillar that will also have a B2C component.

The second pillar for legible is our legible unbound service. Anyone now can join it and enjoy unlimited reading, unlimited listening, and unlimited librarian AI and access to all of our titles with it. And we know that for about every 100,000 members, we have $1.3 million in monthly recurring revenue for the company. And that is going to be fed by our B2B plan. So we're going to be able to play with automotives and transportation systems as that revenue line builds. That will feed our unbound subscription pillar revenue. And then the third pillar is our publishing pillar. And that's important because for two reasons. First, we see a tremendous amount of scalable revenue on the publishing side.

And we also see the publishing side. We see the publishing side as adding value back into our legible unbound subscription pillar. And the reason for that, the high value is that we have worldwide exclusive publishing rights to 12 never before seen Stan Lee characters and stories. So we know that these are tremendously valuable properties that we can develop and make exclusive to our subscription service. Which only adds value to our subscription service. But it also increases our profile, our brand, that much more in the eyes of the world. It makes it an international name, makes it a name that is associated with interesting content that drives people back into that central pillar.

So the publishing side is very important to us because we see that as an ability also, first of all, first of all, for our shareholders. We have to have a knowledge that drives revenue into the company, but in a larger capacity, it also just increases the brand name and builds us into a global commodity as opposed to a territorial one with global play.

So royalty costs also a significant cost factor for legible.

Yes, absolutely. Yes, absolutely. And I should be clear on the financial arrangement there. Yes. So we have arrangements. We have arrangements that are roughly, roughly about 60% and 40%. Legible will take a 40% margin on every membership and it will take a 40% margin on every purchase in the bookstore. There is on the membership fees, ultimately it's 60% and 40% on our contracts with publishers. So that's where we're at. 

Legible also has something in its safe that caused a worldwide sensation when it was announced. No other than Michael Uslain and his son David were recruited for Legible. Michael Uslain is among others, producer of the Batman movies, further blockbuster series and anime, has a professorship at the university and is considered a living legend in this entertainment industry. His son followed him on this path and is among other things. On the advisory board of the Stanley Foundation, the founder of Marvel Comics and creator of so many legendary comic books, heroes of our time. How did this come about and why was this a milestone for Legible?

Well, you know, you say that Michael Uslain is considered a living legend. Let me tell you that I know him personally. He is a legend in real life. Yeah. And he really is something else. And so is David. Both David and Michael are extraordinary people. And in the world of comics, you're right. You just don't get bigger than Michael Uslain and David. So I'm really privileged to work with them. This opportunity, you know, it came to us as all great things do actually, very naturally. We were asked to start conversations with Cartoon Studios, who are the rights distributors for this content. And, you know, they said, look, we've chosen Legible to be the publisher and developer of these incredible characters and stories that the world has never seen before. They're all in a vault. And I just... They said to us... The reason they said is that... And I quote, if Stan Lee knew what you and Legible were doing with books, he would have chosen you for these properties himself. And I was very proud of that. So we are. That was from a personal perspective, an incredibly validating conversation. You know, I since had a conversation with...

Who's also jumped in, somebody named David Newman, who's former head of programming for CNN and Disney and places like that. And, you know, he just looked at me the other day and said, you guys are Marvel 2.0. And we really are going out in that direction. We're really going for… We're swinging for, you know, the bleachers, as they say in an American phrase. So we're really very excited about what this will bring.

It is international publishing news. And Marcus, we're soon to release the news about who's going to be writing and directing all of these brand new comics that we're releasing one a week.

The affinity and direct relationship of both to the late mastermind Stan Lee and the field of comics and graphic novels is well known. But what Legible then announced exceeded the widest speculations. I am, of course, talking about the unpublished manuscripts of Stan Lee. If someone should not know the name Stan Lee… He knows, in any case, the motion pictures which exist of his superheroes for decades. Please take us on a brief journey of how this came to be and the opportunities it opens up for you.

People are very excited about this and people are waiting to hear as well. Who's going to be writing all of these new comics and directing this brand new world of characters? I mean, it's a whole world. Think of it like going back to the days when they were just coming out. Coming up with the whole Avengers world. Like brand new, completely new thing, experience out there. And we have all these new amazing characters. So who's going to write them? Well, I'll tell you what. I can't tell you the names, but I will tell you this. We went out to... I should say the team in Legible Associates went out and they connect to some of the biggest writers in the world. Showrunners of... Major, major shows in the world. And every one of them accepted. So we have some of the best writers in the whole world that are going to be writing these new comics. We're so excited about that.

We can't wait to announce them and these names. What we're calling the Stan Lee bullpen to the whole world soon. Soon. We are so excited. The writers and the people... There's some of the best in the world that want to write these. These are characters that I have to say, I can't reveal anything, but I want to say I've been looking at comics and exploring the world of Stan Lee all my life. And this is as good as anything that he's ever done. And it might even be better. And the people that are working on it, like Michael Uslan, who's taking a direct producing role of all of these. Directly producing all of these comics and everything we're doing. It just couldn't be bigger and couldn't be better for the company. We're going to release these one a week, every week for years and years and years and years to come. And we have 48 comics and four characters that we are releasing this coming year.

So people have access to this new material through the app?

This will be all accessible in Legible Unbound. All you have to do is be a member of Legible Unbound and you can access these brand new titles. And there. And. Not just access them, but access them as living books as well, because all of these brand new Stan Lee books will be living books too and comics. And you'll be able to access everything in the Legible Unbound app yourself. I can't wait for you to see them. I can't wait for you to experience these new worlds. They're really, really fantastic. Truly fantastic.

So what are the next steps? What potential challenges might you face?

Well, what's next for Legible for us is, gosh, we have so many exciting things coming for us. You know, we've just built all of our products, everything we said we would build. We just we just built and we're really going out now. I think what's exciting for Legible are some of the partnerships which I get to make press releases about over this the end of this year. So the next exciting things for us are are in transportation and automotive and other exciting things for us are in in the in the publishing world, what we're going to be releasing. And we're just focused on execution, execution and execution. Now, Marcus, all this incredible value and we're going to execute on each one methodically and strategically. And we have incredible. We have incredible opportunities coming up in the future, involving everything from famous country music stars to major companies that are looking to partner for literacy efforts as well as, you know, programs to support their work in the future. I mean, we're so excited about different different things coming.

If we summarize and evaluate all this, your current market capitalization turns out to be surprisingly low. The last one to two years also did not leave the share price unscathed, as is the case with so many other listed companies. With this in mind, was the release of the legible app important in calming the market?

Yes, you know, I believe in integrity, Marcus, and we gave we gave our word that we would release the apps. We gave our word. We would release legible. Unbound. We gave our word. We'd release, you know, these special products at Librarian AI, and we did. And I think that that's important to show that this team, no matter what the markets are like, we're going to come through in our promises and we're going to deliver value to our shareholders. We are we are probably the most investable part of this company. Frankly, we are here to do what we came to do. And and so, yeah, it was important on that level. From an integrity level, from showing the markets that, yeah, we we are doing what we said we do.

Finally, I regularly ask my guests to tell me the most important three factors that in your case make legible stand out.

That's a fantastic question. The most three key things. First, we have all of our books, e-books and audio books in one place. No going to one app for one and another app for another. Everything is one place in one place and interchangeable. That's the first thing.

The second thing is we have a Librarian AI fully integrated into our site, sharing books with you and there for a conversation about anything, any time, and it's always going to give you the best books. And we are the only ones to market with that. And the third thing is that we're able to produce and offer these multimedia living books to really change the way that people read in the future. We think we're going to be how the next 1 billion will read.

Thank you so much for your time. I really enjoyed this interview and hope to speak to you very, very soon. And maybe we will have the chance to have Michael also on our podcast. So. That would be very, very interesting for many of us.

Marcus, I think a conversation with Michael and I would be really fun to have, especially as we get a little bit further when we get a little bit further on some announcements about who's writing and talk even more freely about what we're doing.

Thank you, Kaleeg and bye bye.

You're welcome.