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Sony Music Entertainment Japan
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How Sony Is Protecting Rights Of Digital Creators Using Blockchain on AWS
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# How Sony Is Protecting Rights Of Digital Creators Using Blockchain on AWS

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BRANDVOICE
Storytelling and expertise from marketers
| Paid Program

Nov 19, 2019,08:00am EST

Updated Nov 19, 2019, 12:18pm EST

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For people who make and love music, it’s an exciting time to be alive. The digital revolution democratizes the means of musical creation: anyone can record and share sounds with anyone else across the world. No studio. No agent. No physical media. No other time in history has produced a greater range of musical creativity for every taste—some unimagined until today. The internet has given rise to streaming platforms such as Spotify, YouTube Music, Amazon Music, among many others, enabling people to discover and enjoy music from centuries past right up to the present moment.

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Unfortunately, traditional approaches to managing music rights are struggling to keep pace with this ever-accelerating world. Protecting the rights of creators takes on new urgency. It also requires innovation. Solutions that simplify royalty tracking and collection ensure fair compensation and free musicians to focus on the artistic rather than the administrative.

Digital rights management (DRM) and copyright verification are critical to ensuring musicians are compensated for their work. Copyright ownership begins with the creator at the genesis of the content. From there, it can then be sold or transferred to other parties. The system of record must be able to verify the copyright owner and enable compensation for use of the material under the laws of the relevant jurisdiction.

In today’s music business, copyright information flows through many steps before a listener can enjoy the content: music companies, copyright authorities, and retail music services all take part in the process before it reaches the end user.

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At every step, contracts must be exchanged and verified. Organizations have proprietary systems for managing this information, leading to massive complexity and the potential loss of copyright information along the way. The resulting web of interactions relies on laborious cross-checking against each party’s individual data stores, which are typically not accessible across organizations. Some steps even require the exchange of physical documents.

Today's complex copyright management structure.

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The digital nature of the music business is putting enormous strain on these systems, which were developed in the pre-streaming era. More people are listening to more music on more platforms than ever before, across geographical and legal boundaries. For example, Spotify alone has more than 100 million paid subscribers and 50 million tracks globally. In the United States, for example, a streaming service must obtain “performance rights” and pay “mechanical royalties,” along with other types of contracts, every time a user streams a song. DRM technology, which protects digital content from unauthorized use, relies on these systems of authorization, as well.

This combination of outdated systems and increasing transaction loads drive up costs for copyright authority, recording, and media companies. The unfortunate result is higher fees to creators—potentially reducing motivation to create new music. It can also slow the process of acquiring license rights to use that music, which can negatively impact revenue.

Sony Music Entertainment (Japan), Inc. (SMEJ), a global music conglomerate owned by Sony, decided to tackle this challenge head on. “As an entertainment company, we seek new opportunities to connect creators with the larger world,” says Tatsuya Haraguchi, Chief Producer of EdgeTech Project, at SMEJ. “Part of that mission is exploring innovative technology such as virtual reality, artificial intelligence and—with our new DRM solution—blockchain.”

Blockchain works well for simplifying systems in which many two-way verification transactions are the norm. Blockchain ensures that transactions are reliable, secure, and immutable. Using a peer-to-peer network, each stakeholder has access to a shared ledger, which can be independently verified. This dramatically reduces the number of transactions required to verify the copyright of a piece of music. Because the blockchain cannot be changed, all parties can be sure transactions are valid without the need to directly contact one another for each transaction.

DRM workflow enabled by blockchain.

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Excited by these possibilities, SMEJ sought to build a blockchain-based system to handle DRM transactions quickly and securely, empowering artists to focus on production. “We had discussed such a solution for some time,” says Tatsuya Haraguchi, Chief Producer of EdgeTech Project, at SMEJ. “However, we needed the right platform to build it on. We didn’t want to get into the business of managing blockchain infrastructure ourselves. Instead, we sought a managed solution. When we discovered Amazon Managed Blockchain, we knew it was the foundation we needed.”

SMEJ began using Amazon Web Services (AWS) in 2012 and today hosts most customer-facing services in the AWS Cloud. “Our experience told us that AWS offered the security, availability, and flexibility we needed,” says Mr. Haraguchi at SMEJ. “What’s more, we projected that development and infrastructure costs would be significantly lower on AWS compared to other providers. And, we wouldn’t need to spend time and money developing the blockchain foundation from scratch.” Amazon Managed Blockchain makes it easy to create and manage scalable blockchain networks using open-source frameworks such as Hyperledger Fabric and Ethereum.

The DRM system will enable participants to share and verify such critical information as the date and time of creation and the artist’s details. It will also automatically verify the rights generation of a piece of written work.

One way of achieving this is to create a user-specific blockchain when the music consumer registers with the DRM system. When the individual acquires rights to the content, the provider’s system adds a new block representing those rights. The provider can then send the encrypted music data, which can be decoded after verification against the user’s rights blockchain.

The system is expected to improve productivity while maintaining proper rights processing. It will simplify how artists interact with information about their rights, creating an environment where new generations of creators can confidently launch—and own—hit content. It will help reduce the cost and complexity of undifferentiated copyright management tasks. Best of all, it has the potential to increase compensation to artists by reducing the cost of DRM. “With this platform in place, we expect to see music creators from Japan become more active around the world,” says Mr. Haraguchi at SMEJ. “We hope to take our platform global, as well.”