Music Publishers Just Doubled the Size of Their Lawsuit Against Peloton to $300MM In Damages

Photo: Peloton

Photo: Peloton

Late last week, a group of music publishers amended their previous lawsuit against Peloton.

Peloton is a tech-focused exercise bicycle startup with designs on a $500 million IPO.

In the original suit, which was filed in a New York federal court in March of this year, music publishers demanded $150 million from Peloton for the use of unlicensed music in their exercise videos.  The publishers, corralled by the National Music Publishers’ Association (NMPA), have since found more than 1,000 additional infringements, and because of this, they have doubled their demands to $300 million.

NMPA lawyers say that they found the new infringements during the discovery process. Among the songs they say Peloton infringed upon includes: “Georgia on My Mind,” “I Can See for Miles,” and “I Saw Her Standing There”. All huge songs, but just the tip of the iceberg.

News of the amended lawsuit comes as Peloton is attempting to raise a half-billion dollars through an IPO.

The company began in 2012 and is said to have sold many hundreds of thousands of its bicycles, which come with interactive entertainment and training that includes the unlicensed music.

In the S-1 filing it submitted to the SEC, Peloton mentioned the difficulty it has had in obtaining music licenses and called this a ‘risk factor’.  It further mentioned the lawsuit and said that it “intends to vigorously defend” its interests in court. To this end, the company filed a countersuit against the music publishers in April, claiming that the publishing group violated antitrust law through the efforts of the NMPA, who they claim has been trying “to fix prices” among its members while engaging in effort to get them to refuse “to deal with Peloton.”

The music publishers have denied Peloton’s collusion claims and have filed a motion to dismiss the countersuit. They insist that each publisher independently decided to not sign a licensing deal with Peloton. So far, the judge in the case has yet to rule on the dismissal motion.

Peloton’s aggressive countersuit may have been unexpected, and is reportedly creating massive additional costs for the NMPA. Of course, the NMPA’s doubled-down action isn’t a guarantee of victory, though its does guarantee massive additional litigation costs. That’s a stress point for the NMPA, which is also battling major streaming platforms and tech giants Spotify, Google/Alphabet, Pandora/Sirius XM, and Amazon over streaming mechanical rates.