Tech giant Microsoft and professional services firm EY recently announced a blockchain solution for content rights and royalties management.
The blockchain solution is designed for every industry where intellectual properties and assets are licensed to other parties through royalty agreements and the creators are paid royalty.
The royalty is calculated manually and through offline data sources. The new blockchain solution will remove the bottlenecks of rights and royalties management process, with improved trust and transparency between the industry players.
Microsoft is initially testing the solution within gaming with Microsoft and its game publisher partners.
“Deploying this blockchain solution will allow us to efficiently manage high volumes and automate processes, while at the same time improve partner satisfaction and enhance compliance. Smart contract technology is far more flexible and scalable than any prior solution for managing business agreements. We look forward to deploying this solution across our gaming ecosystem and exploring additional blockchain applications for other finance processes at Microsoft” said Grace Lao, General Manager of Finance Operations, Microsoft.
Intellectual Properties are said to generate millions of transactions, accruing to billions of dollars per month in form of royalties. The value chain includes authors, production houses, songwriters and developers.
The solution will reduce the operational inefficiencies of manual royalty reconciliation methods. It will give real time visibility into sales transactions through analytics and insights and ability to react to market needs faster.
The solution will also have Smart Contract architecture embedded that will give real time and accurate calculation of royalty position.
The basic network has been built using Microsoft’s Azure Cloud Infrastructure and Quorum blockchain protocol. It also maintains confidentiality of agreements across all entities.
Ubisoft – one of the leading game publishers and Microsoft’s gaming partner is testing the blockchain solution.
Microsoft plans to deploy the rights and royalties blockchain network with its other interested gaming partners in a staged manner.
Phil Spenser, Head of Xbox, shared a tweet to show the significance of this blockchain solution for quick royalty calculations.
Microsoft uses blockchain to deliver royalty statements to Xbox game publishers faster with significant efforts reduction https://t.co/SQnGAfb31X
— Phil Spencer (@XboxP3) June 22, 2018
Once fully operational, the blockchain network will be the world’s largest enterprise blockchain ecosystem processing millions of transactions on daily basis with huge number of Microsoft royalty partners.
The solution is being deployed currently to Microsoft’s key business partners and the companies plan to expand it to other partner organizations in form of general exchange infrastructure for any royalty related transactions.
Earlier this year, Microsoft announced creating a self-owned digital identity blockchain system to allow products, services, people, and apps to interoperate across organizations, blockchains and cloud providers.