Yesterday, Peloton got a nasty surprise in the form of a $212 million lawsuit from the National Music Publishers’ Association (NMPA).
The suit alleges that for years, the high-end fitness tech company has neglected to pay royalties to songwriters behind more than 1,000 songs for the music heavily featured in its classes.
The suit, filed Tuesday in New York, represents groups such as Downtown Music Publishing, Ultra Music, ole, and seven others. “Music is a core part of the Peloton business model and is responsible for much of the brand’s swift success,” said NMPA President David Israelite in a statement.
“Thousands of exclusive video and playlists are a major reason hundreds of thousands of people have purchased Peloton products. Unfortunately, instead of recognising the integral role of songwriters to its company, Peloton has built its business by using their work without their permission or fair compensation for years.”
If you’ve never hopped on a Peloton Bike or Tread, the classes are often sorted by difficulty level, exercise type, duration, but also musical genre. For instance, you could opt for a 20-minute Beginner Hip-Hop bike ride.
Exercise cues are often timed to the music, and in the bike classes, instructors often remind you to match your pedalling to the beats per minute of a particular song. Peloton itself has noted the importance of its curated playlists to its customer base — and even puts its playlists up on Spotify.
The issue at hand is that NMPA alleges that Peloton has failed to obtain what’s called a “sync licence.” Basically, because the music is timed to the video. The complaint notes that Peloton was fully aware of the need to obtain a sync licence, and “in fact sought and obtained such sync licenses from certain other music copyright owners.”
The complaint also alleges that Peloton had in fact, had a licensing deal with Ultra Music for a period of time, but ultimately let it expire and continued to use the music anyway. (What about your regular dance classes and gyms? Unless those are streaming video classes, any music played should be covered under a public performance licence.) Also, in an interview with CNBC, Israelite says the NMPA had approached Peloton to resolve the matter before filing the suit but that talks had gone poorly.
Overall, Peloton has been a runaway success, nabbing celebrity devotees (including David Beckham and Ivanka Trump) and a $6 million evaluation.
It’s also currently prepping for an IPO, which Bloomberg says could bump up the company’s value to more than $11 billion. It’s unclear at this stage whether the lawsuit might impact that IPO. As for what Peloton itself thinks of this whole thing, a spokesperson from the company told Gizmodo:
We just received the complaint yesterday, and we are evaluating it. Peloton has great respect for songwriters and artists. In fact, we have partnered with each of the major music publishers, record labels and performing rights organisations, and many leading independents. We have also invested heavily to build a best-in-breed reporting and licensing system to support our partners and provide our members with a world-class fitness experience.
According to the NMPA, Peloton has released videos featuring unlicensed music from an impressive list of artists, including Rihanna, Bruno Mars, Lady Gaga, Katy Perry, Justin Timberlake, Ed Sheeran, and Ariana Grande. The actual complaint also lists some unexpected songs, such as “Shallow” from Lady Gaga, “Happy Xmas (War is Over)” by John Lennon and Yoko Ono, and “Bring Me to Life” by Evanescence. I don’t know who is working out to these tunes, but we need to have a chat about the art of crafting the perfect gym playlist.