Microsoft Launches Blockchain Solution for Content Rights & Royalties Management

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Microsoft partnered with Ernst & Young (EY) to build a blockchain solution for the management of content rights and royalties management on Wednesday. Such a project could potentially replace the need for written agreements enforced through the court system, through the use of blockchain technology, smart contracts and code.

The solution is already being tested with Microsoft’s video game publishing partner, Ubisoft Entertainment SA, a French company, known for several popular game franchises including Assassin’s Creed, Far Cry, Just Dance, Prince of Persia, Rayman, Raving Rabbids and Tom Clancy’s. If the experiment with Ubisoft is successful, then Microsoft and EY may implement it across numerous verticals that may benefit from the licensing of intellectual property and other content.

Other companies have either attempted a similar model to this, or plan to build out other content management platforms on the blockchain. One of the most noteworthy projects is KODAKCoin. Its initial coin offering is still in progress, but it has inked deals, including an arena partnership to store NBA and NHL photos. KODAK is working with Oak View Group to put this plan into motion, where fans and photographers at six participating arenas may upload and register photos. According to Jan Denecke, CEO of WENN Digital, “We want to introduce the KODAKOne Platform to a creative audience that we believe will both benefit from its functionality and serve as early adopters. Paying photographers fairly and giving them an opportunity to get in on the ground floor of a new economy tailored for them, with secure asset rights management built right in.”

With such a model in place, the goal would be to streamline the process of paying out royalties to people for their IP. Such a system could eliminate any required centralization for payment processing and other necessary tasks.

With the Microsoft platform, publishers and distributors would register and agree to a set of terms and conditions, enforced with a smart contract. Whenever people buy content through one of the distributors the transaction will be recorded on the blockchain, and the smart contract would determine and execute royalty payments. In addition, transactions would be transparent to all parties involved, eliminating any trust issues associated with a centralized database, while simultaneously making for improved operational efficiencies.

The content platform is built using the Quorum protocol, along with Microsoft Azure cloud, and blockchain infrastructures. The system is also designed to reward downstream participants, such as entertainers, graphic designers and game developers. In this way, a single smart contract may efficiently pay royalties to numerous, separate parties that contributed to a particular project. According to EY, this could result in processing millions of daily transactions, thereby making it a tremendous blockchain ecocystem.

As with other blockchain projects, scalability is a concern, and this will depend on how well the code is written, and other factors. The primary question then becomes whether blockchain is the right solution to this problem. The immutability and transparency of the blockchain have tremendous value over a centralized database, as does its ability to automatically pay content providers. It may also be possible to integrate projects on this platform with other Microsoft projects and products, for further versatility in the future.

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