With blockchain becoming a hype, everyone seems to be interested in the trending technology.
And that includes Microsoft, which experiments with blockchain with Ernst & Young (EY) to create a blockchain solution for content rights and royalties management. After successfully testing it, the two companies hope to implement the solution across all industry verticals which require licensing of intellectual property or assets.
That with a goal to streamline the process of paying royalties to the rightful copyright holders.
The blockchain solution has an embedded smart contract architecture which is designed to enable accurate and real-time calculation of each participant's royalty position, providing increased visibility for recording and reconciling of royalty transactions.
Partners can generate accounting adjustments on a daily basis, and use the timely data to improve their forecasting.
The network is built on the Quorum protocol and Microsoft’s Azure cloud and blockchain infrastructures.
Using blockchain technology, the process should increase "trust and transparency” between industry players, reducing "operational inefficiencies," and make things easier for publishers and distributors to reward "downstream participants" like developers, designers and entertainers.
This is where Microsoft and EY tout blockchain’s advantage over the traditional "manual offline way" of tracking royalties.
"The royalty calculations along the value chain are currently mostly manual and generally managed via offline data sources," the companies said, explaining their decision to use a blockchain-based solution.
The project by Microsoft and EY is ambitious, as there are still questions about whether the blockchain technology can indeed be better to be used in this case.
For example, the drawback of using blockchain technology, is its limited capacity to scale. While EY claims that the platform should be able to handle large volumes, the project has not been backed by researchers.
It is worth noting that Microsoft isn't be the first to explore blockchain technology for copyrights and royalties. On of the earliest implementation of blockchain in paying royalties can be traced back to 2015, when British singer Imogen Heap launched her song Tiny Human for $0.60 per download using Ethereum-based Ujo platform.
The project by Microsoft and EY is initially aimed for Microsoft and its game publisher partners, according to a statement. Ubisoft, one of Microsoft’s gaming partners, is the first that tests the solution.