A major international performing rights society was seeking a way to use distributed ledger technology to improve the accuracy of its royalty payment system, reduce costs, and simplify its audit requirements.
Background & Client Challenges
Performing rights societies collect and distribute public performance royalty payments to the composers and publishers they represent. The process requires a survey of all public performances of copyrighted works to determine the proper payout to each rightsholder based upon the number of times each work was publicly performed during a payout period (on television, radio, online, etc.). The client needed to improve survey capabilities and payout system efficacy:
- Automate survey process.
- Automate payment process.
- Automate rightsholder database updates.
- Simplify audit process.
We identified several technologies that could be combined to create a new private blockchain platform, including:
- A modification of current digital watermarking and digital fingerprinting systems to identify copyrighted works and write the results to a private blockchain.
- The creation of a smart contract to tokenize each work.
- The creation of a metadata standard for data collection and storage.
- A permissions schema designed to allow authorized parties to automatically explore the private blockchain.
- Provided engineering and product management support.
While still being tested, this system has demonstrated the ability to improve survey accuracy by 38%. The smart contract automation improves payout accuracy by 93%. The blockchain-based automated audit system has the potential to fully replace the traditional auditing process. The client will continue testing the system through 2022. The goal is to have its board approve the system for full deployment by 2024.