Downtown Music Publ'g LLC v. Peloton Interactive, Inc., 19cv2426(DLC) (S.D.N.Y. Jan. 29, 2020)
On February 27, 2019, Peloton Interactive, Inc., the exercise equipment company that developed the popular Peloton Bike, announced the settlement of a claim brought by ten members of the National Music Publishers Association (“NMPA”), the largest trade association of music publishers in the United States. The NMPA members alleged that Peloton was “willfully infring[ing]” upon its copyrights. While the details of the settlement are not publicly available, the NMPA members were seeking $300 million in damages.
The members sued Peloton over its use of copyrighted music in its on-demand and live-stream bike workout videos. Any and every owner of a Peloton bike could access these videos, which the music publishers’ complaint alleged amounted to over 1,000 of its protected music works being used without a synchronization license for a period of years. These works included popular songs like “Diamonds” by Rihanna, “Everybody Talks” by Neon Trees, and “SexyBack” by Justin Timberlake. Peloton and the NMPA members originally tried to negotiate, but negotiations deteriorated with Peloton eventually alleging that the NMPA was refusing to provide it with a list of its member publishers so that Peloton could negotiate music use with each publisher individually, rather than through the NMPA.
The publishers sought $150 million in damages in their initial complaint filed on March 19, 2019, but doubled the figure in an amended complaint filed on September 27, 2019. The amended complaint alleged that initial discovery had revealed that Peloton’s use of their protected works went far deeper than the publishers had originally suspected. On October 11, 2019, Peloton answered the publishers’ complaint and filed a counterclaim against the NMPA and the ten members, alleging that they were fixing prices and “engag[ing] in a concerted refusal to deal with Peloton” which amounted to anticompetitive and tortious conduct. The court dismissed Peloton’s counterclaims on January 29, 2020, clearing a path to settlement.
This case is another example of providers of streamable content balancing the importance of music to their product with the complicated nature of music licensing. Shortly after the original complaint was filed, Peloton pulled the NMPA-protected songs from its workout videos. Peloton bike owners criticized this decision, noting that the change in the type and quality of music was hurting their Peloton experience. As Engadget notes, the Music Modernization Act of 2018, passed by Congress in 2018 and taking full effect in early 2021, should help companies better navigate the complex world of music licensing and streamable products. Until then, Peloton and the NMPA look forward to their “ongoing collaboration to find solutions that will benefit all songwriters.”