Why it is important
- Currently, the procedure of collecting and tracking copyright rewards relies on the use of a middleman, while Microsoft aims to change established rules and shift the task over to a blockchain.
- The new system will be capable of processing millions of transactions per day while reducing the processing time for a single transaction from 45 days to just one.
Microsoft will start with implementing the blockchain through its large-scale internet gaming system, collaborating with one of the leading gaming industry developers, Ubisoft. Another partner in this endeavor is Ernst & Young, a consulting firm which stated that the new solution will work for any creative industry.
EY and Microsoft say they have “designed a solution to serve any industry where intellectual property or assets are licensed to other parties and where the creators are paid royalties based on royalty agreements.”
The main obstacle to the project is the complexity of the copyright system, as one single video game usually features a number of royalty payments beneficiaries such as software developers; songwriters; performers; and so on. For the project to succeed companies should find a way to solve this issue while attracting various agencies to be their customers.
Microsoft and EY believe that the technology of smart contracts, which incorporates blockchain technology to automate a wide variety of transactions will make the process faster and easier for all parties involved.
“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,” said Paul Brody, EY’s Global Innovation Leader for Blockchain.
By Nadya Astam