Peloton has now settled its contentious legal battle against 14 different music publishers, a group corralled by the National Music Publishers’ Association (NMPA).
Peloton shared news of the settlement with Digital Music News this morning, and publishers confirmed the cease-fire. The extremely contentious (and expensive) litigation started last year, with Peloton aggressively fighting back against copyright infringement charges and even leveling their own countersuit against the publishing consortium.
Peloton executives declined to offer any details of the settlement. But they did point to a “joint collaboration agreement” with the publishing group and the NMPA, with a pledge to “work together to further optimize Peloton’s music licensing systems and processes.”
“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,” relayed Peloton’s Head of Music, Paul DeGooyer. “We’re equally proud to partner with [NMPA chief] David [Israelite] and the NMPA to ensure that songwriters are, and continue to be, fairly compensated. With the NMPA’s input, we are confident our proprietary, state-of-the-art music system will provide an even more dynamic fitness experience for our millions of members worldwide.”
Unfortunately, that’s the lawyer-vetted nice version.
More realistically, there’s likely considerable bad blood between these camps, and an equally muted mood for collaboration. Earlier, a federal judge tossed Peloton’s aggressive antitrust countersuit against the music publishing group, arguing that the fitness company’s arguments of collusion and market control fell flat against traditional legal definitions of anti-competitive behavior. Either way, Peloton vowed to soldier on against the NMPA lawsuit, while aggressively pursuing direct deals with both managers and superstar artists.
The result was a celebrity-driven set of classes, with mega-artists like Red Hot Chili Peppers, Jennifer Lopez, and Lizzo happily signing direct, protected deals that encompassed the range of licenses associated with the setlists in question. None of those deals resulted in any legal problems, suggesting that Peloton had forged a less complicated, direct licensing path. Of course, writing big, fat checks upfront also helps to create a mood of happy collaboration.
That raises questions of how committed Peloton will be to its newfound publisher alliance, especially given the extreme pitfalls associated with broad catalog licensing.
Indeed, sources to Digital Music News noted that the NMPA’s aggressive lawsuit against Peloton may have created a serious chilling effect for future licensors, while draining the trade group’s coffers on legal bills.
Whether the NMPA will now take on another big target is also unclear. Just recently, the NMPA also issued tough talk against TikTok and its owner ByteDance over blatant copyright infringement. “The scale of TikTok’s copyright infringement in the U.S. is likely considerable and deserves scrutiny,” the NMPA told members of Congress last year. But no litigation was filed, and TikTok has since inked a number of high-profile industry deals, most recently with K-pop powerhouse Big Hit Entertainment and their superstar troupe, BTS.
The plaintiff publishers in the Peloton matter 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.
For those lawyers and students in the room, the case was Downtown Music Publishing LLC v. Peloton Interactive, Inc. (1:19-cv-02426-DLC) District Court, S.D. New York.
How much of that settlement will go to artists?