In the 1980s, record companies started releasing music on compact discs after a century of producing vinyl albums. Driven by new digital technology, the music business soon exploded into a billion dollar industry. But with big budgets came big fights over profits between record companies and recording artists. For example, the R&B group TLC blamed an unfair contract with their record label when they filed for bankruptcy in the 1990s despite selling 65 million records. Musical innovator Prince temporarily changed his name to a symbol in protest against the fact that the record company owned the rights to his music. Pop superstar Taylor Swift famously re-recorded her albums after her previous record company sold the rights to her songs in a $300 million deal. 

Then this month, the band Limp Bizkit filed a lawsuit that accuses its record company, Universal Music Group (UMG), of withholding millions of dollars in royalties and costs from albums and videos from 25 years ago. Limp Bizkit was one of the most influential nu metal bands of the early 2000s and has sold more than 45 million records. Despite a recent increase in popularity — including 450 million streams in 2024 alone — lead singer Fred Durst said in the lawsuit that he’s never received a dollar in royalties from Universal. The lawsuit demands that Durst and the band receive sole ownership of the copyrights to their music along with $200 million they claim Universal owes them.

UMG, one of the most powerful forces in the global music industry, denied the band’s accusations and blamed the problem on an accounting glitch caused by an error with new software. The company said it owed the band $1 million, which it has since paid. But the band’s claims are much more serious. In the lawsuit, Limp Bizkit says the music giant “designed and implemented royalty software and systems that were deliberately designed to conceal artists’ royalties and keep those profits for itself.” The problem is complicated by the confusing nature of calculating music royalties from streaming. “The way the money gets paid is totally different now, and much more convoluted,” said Mark Tavern, who lectures on the music industry at the University of New Haven. “You can point to 450 million streams, but that is not the same as 450 million records.”

Questions:

1. Why are Limp Bizkit suing UMG for control of the band’s recordings? Why do you think ownership fights like this have long been an issue in the music industry? 
2. Why is it more difficult to calculate royalties for streamed music than physical copies like CDs?

Sources: Lori Bashian, “Limp Bizkit Sues Universal Music Group for $200 Million, Alleging Years of Unpaid Royalties,” FOXBusiness, Oct. 9, 2024; Callum Jones, “Limp Bizkit’s Fraud Lawsuit Rattles Music Industry: ‘These Accusations Are Massive,’ The Guardian, Oct. 13, 2024.