Peloton settled a lawsuit filed by members of the U.S.’s music-publishing trade organization that had sought more than $300 million in damages over the interactive-fitness company’s alleged use of 2,468 unlicensed songs.
The National Music Publishers’ Association (NMPA), which represents American music publishers and songwriters, and Peloton together announced that they have “fully settled” the litigation brought last year by 14 NMPA members.
Financial terms of the settlement were not disclosed. As part of the agreement, Peloton and the trade association have entered into a “joint collaboration agreement and will work together to further optimize Peloton’s music-licensing systems and processes.”
On Feb. 5, Peloton in reporting results for the December 2019 quarter disclosed “content costs for past use” of $1.0 million for 2019 and $5.1 million for 2018, under agreements “whereby we are released from all potential licensor claims regarding our alleged past use of copyrighted material in our content in exchange for a mutually-agreed payment.” It’s not clear whether any of those payments fall under the NMPA settlement.
“We are pleased the music publishers and their songwriter partners in this case have reached a settlement with Peloton that compensates creators properly and sets forth the environment for a positive relationship going forward,” NMPA president and CEO David Israelite said in a statement.
Paul DeGooyer, Peloton’s head of music, added, “Music is an important part of the Peloton experience, and we are very proud to have pioneered a new revenue stream for recording artists and songwriters.”
NMPA had previously alleged Peloton was not paying for “a significant amount of the music it has used.” Songs the trade org said were misappropriated included tracks by Taylor Swift, Adele, Beyonce, Bruno Mars, Ariana Grande, Britney Spears, Lizzo, Charlie Puth, Meek Mill, John Legend, Maroon 5 and others.
The NMPA members originally filed suit against Peloton in March 2019. The plaintiffs were Downtown Music Publishing, Anthem Entertainment, Big Deal Music, Pulse Music Group, peermusic, Greensleeves Publishing, Me Gusta Music, Reservoir Media Management, The Richmond Organization (TRO), Round Hill Music, The Royalty Network, STB Music, Tunecore and Ultra Music Publishing. In January, the judge in the case denied a counterclaim filed by Peloton alleging NMPA had broken antitrust laws by conspiring to “fix prices” and impede Peloton’s dealings with music publishers.
As of the end of 2019, New York-based Peloton had around 2 million members, including 712,005 subscribers for its $39-per-month bike and treadmill instructor-led workout classes. Founded in 2012, the company’s content is accessible through the Peloton Bike, the Peloton Tread, and Peloton App for iOS and Android, Chromecast, tablets, computers and Amazon Fire TV.
Notoriously, Peloton released a 2019 holiday ad featuring a woman who is given a Peloton bike as a gift by her husband — a spot many critics decried as sexist and elitist. The company’s exercise bikes are priced starting at $2,245 and its treadmills start at $4,295.
In the last three months of 2019, Peloton reported capital expenditures of $48.8 million, the majority of which was related to “the continued build out of our new Peloton Studios in New York City and London,
our New York City headquarters, and new showrooms.” In 2020, Peloton plans to open a new 35,000-square-foot broadcast production facility and multi-studio space on Manhattan’s West Side. Last year, the company bulked up its original content division with the hiring of former HSN exec Jennifer Cotter as chief content officer and ex-Scripps exec Kevin Chorlins as senior VP of content.
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