Music Publishers’ Digital Fight Continues

Music Publishers Seek $200 Million-Plus

Roblox (RBLX) was hit with a lawsuit by The National Music Publishers’ Association (NMPA) which contends the game company uses copyrighted music without the permission from the artists. The lawsuit points to music from megastars including Ariana Grande, the Rolling Stones, and Ed Sheeran. The plaintiffs, which include Universal Music Publishing, Kobalt Music Group, Concord Music Group, and Downtown Music Publishing, are seeking at least $200 million in damages.

The action against Roblox is the latest dispute between artists and companies that use their music. Peloton Interactive (PTON), TikTok, and Snap (SNAP) have all been involved in copyright disputes. Peloton reached a settlement with the NMPA last year and entered into a licensing agreement.

Lawsuit Alleges Roblox Teaches Piracy is OK

The lawsuit takes issue with an in-app feature Roblox sells to its more than 40 million daily users. Users purchase virtual music players which they can broadcast in games to play copyrighted songs. Hundreds of thousands of users have purchased these boomboxes.

The complaint contends Roblox preys on an impressionable user base and teaches young children it is OK to use pirated music. The National Music Publishers’ Association’s CEO David Israelite reiterated those allegations at the trade group’s annual meeting. Israelite said Roblox “enticed and manipulated mostly children” into using copyrighted music.

The lawsuit should not come as a surprise. The digital gaming company warned in its prospectus ahead of its March IPO about the potential for copyright infringement troubles.

Music Industry Strikes a Delicate Balance

Music publishers and artists want to protect their copyrighted material but are also eager to work with digital and fitness companies, which are exploding in number and popularity since the pandemic. The music industry is expanding beyond streaming music services, striking deals with companies in social media, video games, and fitness. Facebook (FB), for example, already has a broad licensing agreement that covers all its apps.

Epic Games and even Roblox have struck deals with artists to host in-game concerts. But that is different from letting copyright infringement go unchecked among millions of users. With music and digital apps coming together, it will be interesting to see how the music industry balances protecting copyrights with striking new partnerships.

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