EY and Microsoft launch a blockchain solution for content rights

Ernst & Young (EY) and Microsoft have launched a blockchain solution for content rights and royalties management. This is to streamline the costly and time-consuming processes in entertainment rights and royalties, the solution is first being deployed within gaming with Microsoft and its game publisher partners.The solution will serve any industry where intellectual property or assets are licensed to other parties and where the creators are paid royalties based on royalty agreements. Within this value chain – which can include authors, song writers, production houses, developers and others - the intellectual property  generates millions of transactions aggregating to billions of dollars per month in royalties to be paid.The solution aims to provide near real-time visibility of sales transactions to the participants in the blockchain network and to help the participants to react to market needs faster and more effectively. According to Microsoft and EY, the royalty calculations along the value chain are currently mostly manual and generally managed via offline data sources.As such, the new rights and royalties management solution is designed to enable trust and transparency between industry players, reduce operational inefficiencies in the rights and royalties management process, and eliminate the need for costly manual reconciliation and partner reviews. The architecture of the solution is designed to enable “accurate and real-time calculation of each participant’s royalty position, providing enhanced visibility for recording and reconciling of royalty transactions,” said the two in a statement.The release also adds that Microsoft’s gaming partners participating on the network will get improved visibility to the transactions versus the legacy process, which could take up to 45 days or more. The participating partners will be able to generate accounting accruals on a daily basis and use the timely data to improve their forecasting.  Currently, Ubisoft, one of the world’s leading game publishers and a Microsoft gaming partner, is testing the solution.Paul Brody, EY global innovation leader, Blockchain, explained that the scale, complexity and volume of digital rights and royalties transactions “makes this a perfect application for blockchains”.“A blockchain can handle the unique nature of each contract between digital rights owners and licensors can be handled in a scalable, efficient manner with an audit trail for the participants.  By deploying this on Microsoft Azure, we believe this will be highly scalable across thousands of royalties and content partners,” he added.Grace Lao, general manager of finance operations, Microsoft, said: “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.”Microsoft intends to deploy the rights and royalties blockchain network with interested gaming partners in a phased manner. When fully operational, this blockchain network is expected to encompass thousands of Microsoft royalty partners and process millions of transactions per day, making it one of the world’s largest enterprise blockchain ecosystems. The underlying network is built using the Quorum blockchain protocol and Microsoft’s Azure cloud infrastructure and blockchain technologies, and implements confidentiality of agreements across entities.EY and Microsoft are currently deploying the solution with Microsoft’s key business partners and will explore opening the solution to other partner organisations as a general exchange infrastructure for royalties-related transactions on everything from software to digital media.