Peloton’s Cautionary Tale: Music Licensing and Your Business

March 22, 2019

One of my primary fitness activities this past winter has been riding our Peloton bike. Workouts on the bike are always interesting because Peloton has numerous great instructors, varied ride types for all skill levels, and great music. You may have seen in the news earlier this week that Peloton is being sued for using music without permission in its video fitness classes. The lawsuit was filed by a group of several music publishing groups, claiming that Peloton does not have licenses in place for more than 1,000 songs owned or administered by the groups over a period of years.

As an attorney that works with both businesses that use others’ intellectual property and creators of intellectual property, music licensing and other types of intellectual property licensing is a commonly misunderstood issue. Songs are protected by copyright law, which grants exclusive rights to the owner of the song. If you don’t own the copyright, you need a license from the copyright holder in order to legally play their songs. Small businesses that play music for their customers are no exception to this rule; in fact, they are often the target of litigation when they ignore these obligations.

So do you need to contact each artist whose song you want to play? Fortunately, most artists join a performing rights organization that license their work to the public, such as American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC as a means to make it easier to license music rather than requiring everyone to get a license from every artist. For a business that plays a variety of music intended to be received by the general public, you can obtain a blanket license from each of the major performing rights organizations that grant permission to play any music from their catalog of songs.

And what if you don’t get permission to use the music? Without a license, any of the following is likely violating copyright law when used for your business:

  • Playing licensed (purchased) music from your iPhone’s music library – your license only allows private listening, and does not cover public performance of the songs.
  • Playing music from a personal Spotify, Pandora, or similar streaming account – there is a separate commercial license available for nearly all streaming services that is required.
  • Offering live music that features cover songs.

What are the risks of playing copyrighted music without a license? A copyright infringement lawsuit offers the copyright holder damages of between $750 and $30,000 per song when used without authorization.

The publishing groups in the Peloton lawsuit are seeking $150 million in damages. Even if your company isn’t contemplating an IPO later this year, music licensing and copyright infringement are frequent sources of litigation, which certainly will be far more expensive than properly licensing the music.

Matt Landis is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University Commonwealth School of Law and works regularly with business owners and entrepreneurs. Matt is one of the founding members of the RKG Tech Law Group. Find Matt on the Peloton Leaderboard #JimmyEatWorld.