When it comes to writing, there’s an inescapable fact. AI has wormed its way into almost all creative digital pursuits, and the future of writing will never be the same again — and it's reaping financial benefits.
Founded in 2020, Ukrainian-founded “transmedia” company HOLYWATER has created a suite of products that change how people produce and consume literary media, specifically in the romance genre.
It's achieved a whopping $70 million in annual revenue through an ecosystem of content apps that include digital books, vertical series, audiobooks, and interactive stories.
Its main genre is romance. By combining creators and AI, HOLYWATER builds personalised worlds for over 32 million users.
However, in doing so, it raises fundamental issues when it comes to the role of AI in storytelling:
- Is using AI to write cheating?
- Is it ethical if you feed a model with your own work?
- Should authors disclose (on the book cover) that books have been written using AI?
- Who should decide about using AI and whether the content it produces is “AI slop” — Authors? Publishers? Readers?
- Is there an ethical way to write fiction — and related creative content — using AI?
To address these questions, I spoke to Anatolii Kasianov, co-founder and co-CEO of HOLYWATER and award-winning author LA Witt, who specialises in LGBTQ+ romance. Witt has authored over 187 books across 48 series.
How HOLYWATER turns books into multimedia franchises
To describe HOLYWATER’s success as meteoric is an underestimation. HOLYWATER began with interactive storytelling, then evolved into a suite of offerings:
My Passion: A mobile ebook reading app specialising in romance genres, which provides a personalised reading experience with features like offline reading, custom fonts, dark mode, and daily rewards. The ebook platform alone generates $26 million in annual revenue.
My Fantasy: An interactive storytelling platform that transforms popular books into immersive experiences. Users can customise characters, make choices that influence the storyline, and engage with visualised narratives, blending elements of gaming and reading.
My Drama: A vertical video streaming app offering short-form series (around 5 to 7 minutes each) tailored for mobile viewing.
The app integrates AI-powered chatbots, enabling viewers to interact with characters and thereby enhancing engagement and immersion. It currently has around 20 million monthly active users and generates over €12 million in monthly revenue. Characters are portrayed by real human actors.
According to Kasianov, some shows are developed in-house, while others are developed in collaboration with authors, and some are licensed from competitors. The production cost of each title varies from $80,000 to $200,000, depending on the filming country and cast.
My Muse: An AI-powered platform that enables users to generate short-form video series, audiobooks, and interactive stories. Utilising tools like Midjourney and Runway, it assists in scriptwriting, visual creation, and quality control. HOLYWATER’s system is designed to maintain character consistency, enabling viewers to form lasting emotional connections with the story and its characters.
My Imagination: An AI companion platform where users can interact with AI-generated characters for parasocial relationships. These companions can engage in real-time conversations, including video calls.
All of these cross-platform product offerings feed data into HOLYWATER’s LLMs to determine the most popular content with readers and viewers.
According to Kasianov, an author can “turn a book into an audiobook, then into a vertical series, and even build AI-driven characters you can talk to—what we call 'AI heroes.’”
30 to 40 per cent of ebooks published on the platform have been turned into audiobooks, and 35 per cent of ebooks become scripts for original My Drama titles per year.
But the ripple effects of AI in fiction go far beyond platforms like HOLYWATER — touching even grassroots literary communities and indie authors grappling with issues of intellectual property (IP).
Over 100 of Witt’s books were used to train AI without consent
When it comes to published authors, many have felt the sting of AI companies using their work to train their models without consent. In March, an article by The Atlantic revealed that Meta, Bloomberg, and others used a dataset of pirated ebooks known as Book3 to train their models.
Witt found over half of her books, 100 titles, including two that have been out of print for over a decade.
“I didn’t consent to my books being fed into these programs.”
This week, a federal judge in California ruled that while Anthropic likely violated copyright law by pirating authors’ books to create a giant dataset, training its AI on those books without the authors' permission constitutes transformative fair use under copyright law.
HOLYWATER uses open-source models like LLaMA for language and Stable Diffusion for visuals. According to Kasianov, “these give us strong performance without relying on closed-source platforms that lack transparency.”
The importance of IP for published authors
Many existing contracts give publishers lifetime rights to all current and future formats. Now, AI has introduced a format no one expected. Some publishers are adding contract addendums to exclude AI, but others aren’t. Authors are worried about losing control, especially over audio rights.
One challenge facing writers is around the use of their characters – or, in the case of books they’ve recorded, their voice in perpetuity by publishing houses.
According to Witt, many narrators are being asked to provide their voices for very little money, essentially helping companies replace them.
“Readers, especially in romance, are very loyal to narrators and want an emotional connection. Replacing them with AI feels like a betrayal.”
With HOLYWATER, authors maintain their IP. Kasianov shared:
“We sign agreements — exclusive or non-exclusive — depending on the project. The author always remains the IP owner, and we collaborate with them if they want to adapt their work into new formats."
Further, Kasianov asserts that authors should continue to earn royalties even if AI generates derivative content.
“Whether it’s a sequel or adaptation, the original IP creator deserves compensation. For example, even if AI writes more Harry Potter-style books, J.K. Rowling should still benefit. Our focus is on ensuring authors retain rights and receive ongoing royalties for any derivative works.”
One standout case is the author of “Beauty and the Beast” (a romance with an “enemies to lovers” storyline). According to Kasianov, she licensed her book HOLYWATER non-exclusively, “and it became a hit.”
“We then co-produced a vertical series with her, investing about $120,000, and it also performed really well. She now wants to collaborate with us exclusively on future work.”
How NaNoWriMo’s attempt at inclusivity sparked Its collapse
The problems of AI and fiction are not limited to professional authors. The National Novel Writing Month (NaNoWriMo) challenges writers to draft a novel every November.
Last year, the NGO posted on its website that it does not “explicitly support” or “condemn” any one approach to writing.
A statement declared:
"We believe that to condemn AI categorically would be to ignore classist and ableist issues surrounding the use of the technology and that questions around the use of AI tie to questions around privilege."
It goes on to contend that “not all brains have same abilities,” and that some may “require outside help or accommodations to achieve certain goals.”
The news went viral, drawing censure from writers – including those with disabilities. Several board members stepped down, while various sponsors withdrew their support.
According to Witt, NaNoWriMo started her career in 2008.
“I typed on a plane to Japan, and that habit of writing every day launched my entire trajectory. If you take away the writing, what’s the point? What are you even doing with your time?”
In March this year, NaNoWriMo closed down after 25 years.
The battle for romance writing’s emotional core
When getting down to the soul of fiction, it raises the issue: Can AI-generated content provide the emotional depth and authenticity that human authors bring?
Witt admits:
“I don’t understand the desire to remove the active creative process. That’s where the story comes from. Yesterday, for instance, I was writing a scene where a hockey player confesses guilt over leaving his kids to travel.
That emotional nuance wouldn’t be in any of my other books. AI can’t generate that kind of character depth.”
I put it to Witt that she could train a model on her work, as she’s literally written millions of words.
But she asserts, “the output would be garbage. My books are too different from each other. The emotional core, the uniqueness, that all comes during the act of writing. AI can’t recreate that. It just fills pages!”
Kasianov stresses, “We’re not forcing AI on anyone. However, we do help authors utilise AI tools to overcome writer’s block, speed up their process, and generate ideas. Think of it like having a team of editors or second opinions, only AI-powered.”
Witt’s prolific career, however, proves that it is possible to write efficiently without the use of AI.
Should writers have to disclose the use of AI? For Witt, it's a resounding yes. She contends that at the very least, it should be on the copyright page:
“A lot of us have started including a note saying, “No AI was used,” because we can’t get the people who do use AI to disclose it. It’s become more of an opt-out thing than an opt-in. But disclosure is important."
Witt is in a lot of reader groups, where readers “absolutely hate AI.”
“They don’t like AI art, and they really hate AI-narrated audiobooks. If an author uses one, readers will boycott them completely.”
Authors also have strong feelings about who voices their audiobooks. Witt contends that readers, especially in romance, are very loyal to narrators and want the emotional connection.
Witt contends that “replacing them with AI feels like a betrayal.”
The challenge isn’t just about IP, it's about trust and authenticity — especially between authors and platforms, and above all, between writers and their readers.
I’m not sure I’d ever expect Witt to use a platform like HOLYWATER, but I’m confident that both the company and Witt will have long writing careers — just on very different terms.
Lead image: HOLYWATER: Photo: uncredited.
Would you like to write the first comment?
Login to post comments