Microsoft and UK services firm EY have developed a blockchain network that can handle complex royalty and digital rights contracts.
The pair are working to streamline the calculation of royalties between Microsoft, game publishers, developers and others. It has been built using Quorum blockchain on the Azure cloud computing platform.
Blockchain is a ledger that can be added to but not modified, making it very secure. Each entry is secured into blocks of entries, and each new block is linked to the previous one. It is historically known as a core part of the digital currency bitcoin but can be used for any transaction of value.
The Rights and Royalties blockchain network makes contract negotiations smoother between partners in the blockchain network, automates the processing of royalties and generates and distributes up-to-date financial information such as payment adjustments.
“The scale, complexity and volume of digital rights and royalties transactions makes this a perfect application for blockchains,” said Paul Brody, Global Innovation Leader for Blockchain at EY. “With a blockchain, we can handle the unique nature of each contract between digital rights owners and licensors in a scalable, efficient manner with a verifiable audit trail.
“By deploying this on Azure, we believe this will be highly scalable across thousands of royalties and content partners.”
The solution was created so intellectual property (IP) owners can trace how their IP is used and see how revenue is flowing through licensing agreements and partnerships.
Microsoft began pilot operations of the network in February, and could roll it out to other key partners later this year. It will then look at opening up the solution to other partners to help them with their own royalties-related transactions involving everything from software to digital media.
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Brad Wright, Partner and Software Engineering Manager at Microsoft, said: “Powered by Microsoft Azure and blockchain technology, this solution helps demonstrate our ability to enhance trust with our gaming partners, and strengthen security, transparency and payment accuracy through the power of blockchain. We’re thrilled to work with EY and our gaming partners to streamline this business.”
The Rights and Royalties blockchain network is just the latest example of Microsoft’s involvement in blockchain. In March, UK financial technology firm Nivaura launched the first blockchain-based investment product, using Azure as the hosting platform.
In August last year, Microsoft announced the Coco Framework, a first-of-its-kind blockchain service for companies that can handle more than 1,600 transactions per second.
Deep Ghumman, EY Global Blockchain Finance Lead at EY, said: “Enterprises are looking to use blockchain technology to solve their business challenges. They are especially looking for scalable blockchain products that can easily plug into their existing processes and systems. The Microsoft rights and royalties blockchain solution on Azure is a great example of how blockchain will transform the way we do business.”
