Peloton, the fitness company with a cult following and swanky stationary bikes, seems to be spinning their wheels: they were slapped with a $150 million lawsuit in March for allegedly using unlicensed music in its video workouts. The lawsuit claims that Peloton used more than one thousand songs without obtaining necessary synchronization (“sync”) licenses, as required under copyright law. And these weren’t just any artists – the likes of Lady Gaga, Drake, and Justin Timberlake are among the ranks of those whose songs are at the center of this lawsuit. Ouch. In response, Peloton has taken down some of the classes containing the songs, in what the CEO called an “abundance of caution.”
So, what, you may ask, is a sync license? And why should we care? (I’m using the royal we here; looking out for you Peloton)
In a nutshell, a sync license provides the ability to use a musical recording in connection with corresponding visual media (read: motion pictures, commercials, YouTube videos). But, in order to really understand why this license exists and why the scope is so narrow, let’s first discuss how copyright law treats musical compositions:
Copyright law splits a musical piece into two parts: (1) the musical composition and (2) the sound recording of the musical composition. So, an artist who creates a particular musical work would own both the copyright in the musical composition and the corresponding sound recording, provided the composition was not a work made for hire or exclusively licensed.
For simplicity, let’s assume the artist owns both copyrights. If someone wanted to use the musical piece in a video, they would need to obtain both a sync license, for use of the musical composition, and a Master Recording License (also known as a Master Use License), for the sound recording. These licenses vary in price, depending on “use, frequency, exclusivity, and other factors,” but both are necessary to obtain if using the artist’s recording of the song within a visual medium.
In this instance, the plaintiffs in the lawsuit are claiming Peloton never obtained a sync license, and therefore lack permission to play songs with the corresponding workout videos. To complicate matters, there are claims that Peloton obtained sync licenses for other artists. This seems to indicate they knew of this requirement and failed to secure those same licenses for this library of music, which seems both very interesting and very risky.
We’ll have to wait and see whether Peloton’s quick reaction to pull the offending videos down is enough to placate the parties, or if we’re just clipping in a for a long ride.
Image Source: Peloton Interactive Inc.
