RIDING WITHOUT A LICENSE
This month, our disruptor in trouble is recent fitness fad Peluton, a company who sell luxury exercise bikes for $1,995 and have a subscription service for live and on demand spin classes, at an extra $40/month. These classes come with a trainer, personalized advice and a variety of different playlists.
Unfortunately several members of the National Music Publishers Association (NMPA) realized that Peluton didn’t fully license all of the music it uses, especially from big stars such as Rihanna, Justin Timberlake, Lady Gaga, Bruno Mars and Ed Sheeran. The NMPA acknowledges that the company has licensed with some of the music publishing industry, but claims “it has failed to do so with a significant number of publishers, leaving a great deal of income lost to songwriters.”
Now being sued for $150 million, the fact that it licensed most of its music is working against them, "Incompetence is the simplest explanation, but it doesn't hold up if they did it right some of the time." Peloton CEO John Foley responded to the lawsuit by removing exercise classes set to the disputed tunes, while assuring fans that their experience wouldn't be affected in the long term, but no monetary compensation has been offered. The role music plays in Peloton workouts will likely become a key part of the lawsuit. If the NMPA can prove the songs help make money for the multibillion-dollar brand, it could argue that artists and publishers deserve ample monetary compensation.
Whether, John Foley CEO will manage to get back on the saddle ahead of the rumored 2019 IPO is the question on many cyclist’s minds.