Peloton slapped with $150 million lawsuit for using songs by Drake, Lady Gaga without permission

Key Points
  • Music publishers are suing Peloton for copyright infringement.
  • Peloton allegedly used thousands of musical works in its videos without permission.
  • The lawsuit, which seeks more than $150 million in damages, was filed in the U.S. District Court in New York.
The man behind the Peloton lawsuit explains
The man behind the Peloton lawsuit explains

A group of music publishers is suing Peloton, alleging the maker of video-streaming exercise bikes used more than 1,000 songs from Lady Gaga, Drake, Gwen Stefani, Justin Timberlake and others without permission.

The publishers, including Downtown Music Publishing, Big Deal Music, Reservoir, Round Hill, Royalty Network, Pulse Music Publishing and TRO Essex Music Group, say Peloton failed to license songs from the companies, resulting in a loss of income.

The copyright infringement lawsuit, which seeks more than $150 million in damages, was filed Tuesday in the U.S. District Court of the Southern District of New York.

"Music is a core part of the Peloton business model and is responsible for much of the brand's swift success," David Israelite, National Music Publisher's Assocation's president and CEO, said in a statement. "Thousands of exclusive videos and playlists are a major reason hundreds of thousands of people have purchased Peloton products."

"Unfortunately, instead of recognizing the integral role of songwriters to its company, Peloton has built its business by using their work without their permission or fair compensation for years," he said.

The association said that since 2014, Peloton had released thousands of videos that included unlicensed music recorded by artists like Rihanna, Bruno Mars, Katy Perry, Shawn Mendes, Ed Sheeran, Wiz Khalifa, Thomas Rhett, Ariana Grande, Justin Bieber and Florida Georgia Line.

"We just received the complaint this morning, and we are evaluating it," Peloton told CNBC in a statement. "Peloton has great respect for songwriters and artists. In fact, we have partnered with each of the major music publishers, record labels and performing rights organizations, and many leading independents. We have also invested heavily to build a best-in-breed reporting and licensing system to support our partners and provide our members with a world-class fitness experience."

John Foley, CEO of Peloton.
Adam Jeffery | CNBC

Peloton is expected to go public in the second half of the year and is rumored to be seeking a valuation of $4 billion.

Peloton manufacturers and sells stationary exercise equipment that sell in excess of $2,000 each. It also has a monthly streaming service for members to watch exercise videos while they bike.

Disclosure: Comcast, the parent company of NBCUniversal and CNBC, has a stake in Peloton.

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