Peloton and its Bike, bring songwriter's rights to exercise

March 20, 2019

Last year around Thanksgiving my girlfriend and I purchased a Peloton exercise bike. Spinning was never really my thing, but the idea of having 24/7 access to a piece of exercise equipment seemed to make sense to us as we get older. The bike has made a huge change in my life. I ride it most days and have taken advantage of their strength and yoga workouts. I exercise more frequently, am getting in better shape, all while listening to a lot of great music.

Music is integral to the Peloton experience. As soon as you start a class (spin, yoga, run, strength, stretch) music is playing while an instructor introduces and explains a few things. When the class starts so does a curated playlist. Sometimes the music sets the mood, slow and steady for an endurance ride, or fast and dynamic for intervals. Then there are themed rides based around genres, artists or albums. I have discovered some great new music in the process, which also has fueled my addiction. Equally addictive is the fact that you can do a live class or an on-demand class, meaning that every class is recorded and can be taken at your convenience. Don’t want to get up at 6:30am for a Brit Pop ride? No problem it’ll be on Demand within 24 hours. On demand classes also post the playlist, so you can see what music is on the ride. On live rides you can’t preview the playlist, and just have to go by what you know about the instructor and their taste in music. This allows you to pick your class based on the music/ What do I want to hear? What will make this more enjoyable? Will I work out harder to Enya or The Clash?

But then on March 19th a lawsuit was announced against Peloton and the use of music. Facebook forums have been a buzz with speculation of the lawsuit, with people claiming Drake and Lady Gaga are suing Peloton over the use of their music, while others jump to conclusion that the greedy music industry is trying to gouge Peloton’s $4 Billion IPO.

First things first, from what I have seen of the legal brief, the suit alleges that while Peloton has entered into license agreements for much of their music, they have also been using unlicensed music. The suit is brought on behalf of the artists who have had their music used without a licensing agreement. So, that’s not about a greedy music industry seeing dollars and wanting a piece of the action. It’s more akin to backpay: compensating those whose music has already been used.

Most people, however, seem to have only read the headlines and never got further than “Drake and Lady Gaga”, who are a part of the suit. However, I want to address what I’ve seen in the forums about people being apathetic to millionaire musicians making more money, because that’s neither the point, nor what’s really at stake.

In the pre-digital age, the music industry thrived off the sales of records, whether it was a 45, an EP or an LP, and artists got a percentage of the sales. However, artists only got a percentage after they paid back all the money the record label shelled out for the recording and the promoting of the album and sometimes even the tour and the merchandising. If an album was only a modest success it could take 2 years before the musicians made any money. When sales were bad musicians ended up owing the label, and never profiting from their music, and sometimes not even owning their own recordings, and unable to reissue their music because the label still owns it.

The bright side to all this back then, was that labels had tent pole artists. For example, the Beatles are Apple Records tent pole artist. They were successful enough that they paid the Apple Corp staff and covered the overhead. They could also sign new artists and provide them with an opportunity to be heard. They could also sign acts they thought should be heard and would be appreciated by a small group but would never be stars.

Major labels often had more than one tent pole artist, and this allowed greater opportunity for new bands. Sometimes bands were allowed to make three modest selling records in search of their sound. Almost every artist out there benefited from being under the tent pole of a larger artist. Jimi Hendrix was able to make weird and experimental records because he was on Frank Sinatra’s label. The Eagles were able to go from “Witchy Woman” to “Hotel California” because they were on The Doors label.

As the digital landscape has evolved all of this has changed in scope, but not practice, meaning a new artist might be allowed to make a single album under the tent pole of a more successful artist, but they are no longer nurtured by the label or given the time to grow. At least not like bands were in the ‘70’s.

Still, the music industry remains an ecosystem, with the larger artists opening doors for newer, smaller artists. Without those millionaire musicians you don’t have the independent or new artists. But also, a more modest band would neither have the clout nor the money to make a case like this headline news. In fact, I only today discovered David Lowry of Cracker and Camper Van Beethoven had sued Spotify, despite reading his blog at least 3 years ago about his situation. He’s just not as news worthy as Gaga, and if you want to enact real change you need the public to be aware of the situation and on your side. Drake and Gaga aren’t in the headlines because they want or need the money. It’s because there is no headline without them, no news, no interest.

But more to the point is that it’s we, as consumers, who suffer in this situation. Living in Seattle in the early 1990’s I have a lot of friends who are musicians. Some found success, some still struggle to get their music out there, some have transitioned into other aspects of the music business while others gave up completely. I saw the hard work and long hours they put in on their craft. I watched them listen to label executives and A&R people who didn’t get them but needed a Seattle band on their label to cash in on the grunge phase. I experienced their pride and joy when they were signed, I saw their heartbreak when they were dropped. I watched them try to make sense of it all and what it meant for their future.

Many of my friends would have given me a copy of their album had I asked for it, but I never did. I almost always bought the album for myself. I could support them for $10, after all they’d been through. Today I don’t own a CD player, but I still have CD’s where I’m thanked in the liner notes, or a photo I took was used as art work, or someone took the time to sign it for me.

I still have numerous friends who are making great music, not as frequently as I’d prefer, because they now have day jobs and have to pay for studio time themselves. Their music comes out in drips and drops, spirts and stops. Some have started their own labels or are distributing their music on-line themselves. But there’s no guarantee they’ll get carried by services such as iTunes or Spotify, so only their most loyal fans will be aware they are still making music.

Meanwhile the major labels push generic music written by the same three writers and made by the same seven producers all autotuned within an inch of its life. The only nuance to it is J-Lo singing or Selena Gomez? Is it Justin Timberlake or Justin Bieber? It’s catchy, got great hooks, but is reminiscent of so much other music currently out there. It’s a formula that no one strays from, because it’s a formula that works. At least in the short term.

But it isn’t organic, and it’s not meant to last. It’s the flavor of the month. The reason certain songs are classic and have stood the test of time is because they weren’t formulaic. They changed tempo, were in weird time signatures, shifted keys and had both loud and soft parts to them. Bohemian Rhapsody has stood the test of time because of these things, as has Stairway to Heaven, Layla and Sympathy for The Devil to name only a few.

The craft of music has been replaced by a factory line and most consumers either don’t realize it, or don’t care. But unlike movies, which suffered similar growing pains, a three-minute song is a lot more disposable than a 90-minute film. The film industry had to right the ship if they wanted to keep theater seats filled. The music industry can just trot out another song after another song until we forget how bad the first one was. Like cotton candy, it might taste good at the time, but ultimately it fails to satiate or resonate. The bar gets lower and lower each year and we wonder why we cling to the music of the past with such nostalgia.

But if there’s one thing I know, it’s that things will continue to change. How we listen to music is an evolution, there are new outlets and it’s becoming increasingly easier to take our music with us wherever we go. Streaming makes this even easier, but it’s also where musicians receive the lowest return.

So, let’s talk about mechanics. If I write a song, I get publishing rights. If I co-write a song, I share those rights with the other co-writers. We each get a percentage of the royalties. If I record the song, I get performance rights. Those are also shared with anyone else who plays an instrument on the song, and possibly the producer. I can’t say exact numbers, but they’re not a lot, as they can be spread out over a number of people.

To further complicate things, the amount varies on its usage, if it’s in a movie, commercial or TV show, on the radio or in a public setting such as a bar or restaurant. The fees for movies are expensive as it has to include the fact the song will be seen in theaters, on pay television, through a movie subscription service, on regular television and the internet, numerous times. It’s much cheaper to licenses music for your boutique store or restaurant. But these are also one time only instances, and typically there’s a blanket cost that is built into the fees if you use a service like Muzak.

Because streaming is such a new evolution in the way we listen to music, Spotify has been able to dictate the terms as the premiere streaming service. For most artists they offer a pittance, where you might need to have one million plays before you make one cent. This last Christmas Mariah Carey song “All I Want For Christmas Is You” was streamed 10.8 million times, setting a record. For each play she was paid $0.006 which amounted to $66,000. Now, obviously that’s a huge amount of money, but it’s nothing compared to what she’d have made if those songs had been purchased at the going rate of between $0.99 and $1.29. Also, that $66,000 was split between various rightsholders, including co-writers, producers, label executives and publishers.

As an upper echelon artist, Mariah Carey gets a higher rate per song. For independent artists there are a few more zeroes between the decimal point and a digit of any substance. So, a one hit wonder is going to make a lot less money over a much longer time period. This is passive income to them, and nothing that can be counted on as it’s such an inconsequential sum.

In fact, musicians make so little money these days, and so few people buy music (as opposed to subscribing to a streaming service or using the free tier) that some bands no longer see the point in recording new music at all. Fleetwood Mac has decided it’s not worth the time and effort to record anymore. They have a large enough back catalog that they can make a decent living off touring. But do you actually get that? The Return On Investment for creativity has become so devalued that it’s no longer worth it.

Let that sink it.

And now ask yourself how long it will be until other bands decide the same thing. Back in the golden age of popular music artists routinely put out multiple albums a year. Today, there are bands who have been around longer than The Beatles with less than half the albums to show for it. The return is so low on writing music that it’s in decline. If you’re lucky an artist puts out an album every other year, but the mean is likely closer to an album every four years. And sometimes, they just weren’t worth the await. Too much time has passed and they’re not the same they once were.

Couple that with, as I said before, it’s harder to find new music by new artists and where does that leave us? Musicians aren’t incentivized to create, and even if they are, consumers can’t find it without doing a huge amount of work. And even then, is the investment in time worth the return?

I know many people believe they are supporting musicians by paying for a subscription to Spotify or Pandora or Shazam or iTunes. But you’re not supporting the musicians. You’re supporting the music industry and that’s different. It’s only bands like AC/DC, Taylor Swift and The Beatles who’ve had the leverage to demand higher licensing rights from Apple and Spotify for use of their catalogs. For everyone else, they have no choice, but to accept the scraps they’re offered, because something is better than nothing. But artists receive more money from a song that is purchased than for a song that is essentially rented. The $9.99 you pay for unlimited streaming from your service provider of choice is spread out over a lot of different artists and songs. Not to mention that a chunk of that $9.99 is being used to keep the lights on and the rent paid in Spotify’s Manhattan high rise offices. Each month they pay between 1.38 and 2.77 million dollars (sources vary) for space in the World Trade Center. Don’t kid yourself that that subscription supports the artists.

If you want to support musicians, however, and show them you appreciate the music they make and the time they put into their craft, consider buying directly from them. Go to their website and buy your song, album, CD, whatever from them or their label. If you buy a record from an artist or their label more of the profit goes to them. They purchase an album at cost, mark it up and that markup allows them to keep making music. It doesn’t go to pay for a view of New York’s skyline for some executive. It’s that simple.

Now, I don’t think Peloton was trying to get away with something. I don’t believe for a minute they were trying to get one over on anyone. But they have built their brand off the music on their playlist. I doubt anyone knew back in 2012 what their impact would be and neither they, nor the music industry could have predicted it. Peloton currently has 25 instructors across four different disciplines that each curate their own playlist for their class. The likelihood is that instructors found an obscure song that fit perfectly with what they wanted to achieve in class, but just wasn’t licensed by the company. I don’t believe it’s malicious on anybody’s part. In fact, I believe that the instructors were just trying to give their subscribers the best class they could and were completely unaware of what they’d inadvertently done.

Unfortunately, I think that this has become another example in a long line of musicians not getting their proper earnings, of not being treated fairly, of having to resort to litigation to get what’s rightfully owed them. Their history is fraught with being screwed over by managers and agents, being ripped off, or having their publishing rights swindled from them. The Rolling Stones don’t own most of their 1960’s catalog. The members of The Beatles only recently got the rights to their music back. Many jazz and blues artists never saw any money from their record sales. There are plenty of musicians littered throughout the recent past who died penniless despite having number one songs. It’s such a problem that there’s a company called Bug Music which got its start chasing down unpaid royalties for artist or their estates.

Is Peloton responsible for any of this? Of course not! I’m not here to point fingers or asses blame. But there is a bigger picture here than just Peloton, the music industry and slighted musicians. The true concern is what happens as more musicians realize there’s no value in creating new music? When commerce wins out over art and we listeners are only able to hear music by the same few artists, who have no reason to challenge themselves and grow? Who are content with sticking to the formula as long as the money rolls in?

Ultimately the issue is about artistry over commerce. But what’s at stake is our musical culture. The culture behind bands like Queen, Led Zeppelin, The Beatles and the Rolling Stones versus the culture behind Justin Bieber, Selena Gomez, Dr. Luke and Icona Pop. Where music doesn’t need to be great it just needs to be good in the moment. Where songs aren’t meant to stand the test of time, but rather to fill time.

So, what’s the answer? Honestly, I don’t know. I’m not sure this can be fixed, or that people even want to fix it. And maybe that’s what’s the saddest of all of this whole mess..