Luxury exercise bike maker Peloton’s antitrust counterclaim against the National Music Publishers Association (NMPA) was dismissed by a judge in New York yesterday (January 29).
Peloton – which got close to generating a billion dollars in the 12 months to end of June 2019 – was hit with a $150 million copyright lawsuit last March from music publishers for the alleged infringement of over 1,000 musical works. That lawsuit has since been raised to $370m.
Peloton’s music-driven training videos – available via a $39-per-month subscription on one of its $2,000-plus exercise machines – have included music recorded by the likes of Rihanna, Bruno Mars, Lady Gaga, Katy Perry, Justin Timberlake, Shawn Mendes, Ed Sheeran, Wiz Khalifa, Thomas Rhett, Ariana Grande, Justin Bieber, Florida Georgia Line, Drake, Gwen Stefani and many other artists.
Peloton filed a counter-claim in April 2019 against the NMPA, alleging that the trade organization “coordinated to collectively negotiate licenses in violation of antitrust laws”.
The countersuit also alleged that the NMPA obstructed Peloton’s ability to conduct negotiations directly with NMPA members.
The publishers involved in the original infringement suit in March last year included Downtown Music Publishing, Pulse Music Publishing, ole, peermusic, Ultra Music, Big Deal Music, Reservoir, Round Hill, TRO Essex Music Group and The Royalty Network.
US District Judge Denise Cote argued that “Peloton does not explain why it cannot substitute songs with sync licenses owned by the Music Publishers for songs with sync licenses owned by other publishers.
Added Cote: “Indeed, as Peloton admits, it has successfully ‘collaborated with music publishers to develop an innovative licensing framework that is appropriate for its business and reached agreements with all the “major” music publishers and many independent music publishers.'”
NMPA President & CEO David Israelite said yesterday that “today’s victory is a reminder that tech companies like Peloton cannot build businesses that are reliant on songwriters without asking their permission and paying them”.
“Today’s victory is a reminder that tech companies like Peloton cannot build businesses that are reliant on songwriters without asking their permission and paying them.”
David Israelite, NMPA
Added Israelite: “Judge Cote has dismissed all of Peloton’s counterclaims which were only meant to distract from their failure to license 2468 songs.
“We are pleased that Peloton’s attempts to divert attention from the heart of the issue – properly paying creators for the music on which its billion-dollar business was built – have been defeated.”
“We will continue to vigorously contest the plaintiff publishers’ infringement claims, which were not addressed in this decision.”
Peloton said in a statement that it “respectfully disagree[s] with this ruling regarding [its] counterclaims and [is] assessing [its] options for appeal,”
“We will continue to vigorously contest the plaintiff publishers’ infringement claims, which were not addressed in this decision.”.Music Business Worldwide