If any one sector came out of the COVID-19 pandemic better than it entered it was the at-home fitness space. Now, Peloton is aiming to make music a more central part of their user experience to attract new users and keep their current subscriber base entertained.
Peloton, which went public in 2019, grew exponentially during the pandemic — the company nearly doubled its sales in 2020, with more than $1.8B in revenue. They ran into problems, however, as the company grew and it could no longer function like a small cycling class in Brooklyn, where the instructor just plays whatever tunes they want for their students without paying artists royalties.
Peloton was sued by music publishers over its previous licensing practices and settled in 2020. The suit with publishers cost Peloton a reported $49M in legal costs and led to many workouts, which are often intricately synchronized to playlists of songs, being removed from the platform. This left many users frustrated, with Peloton subscribers complaining that the company had swapped out tracks from their favorite artists with the equivalent of Kids Bop covers or remixes. The suit had a dramatic impact on the quality of the user experience when completing workouts.
The settlement came with an acknowledgment from Peloton’s former head of music Paul DeGooyer that has become all the more apparent over the last year: “Music is an important part of the Peloton experience, and we are very proud to have pioneered a new revenue stream for recording artists and songwriters.”
Now, Peloton operates similarly to streaming services like Spotify and Apple Music in the way it operates with label, brand, and artist partners to create curated experiences for their fans built around music. Peloton has proceeded to launch major partnership after major partnership with record labels and artists.
A licensing deal with Warner Music Group has resulted in featured workout playlist inclusions for Warner artists as well as tailored “Scenic Trails” — a feature that allows users to ride through virtual versions of real world trails — that feature exclusive playlists.
Peloton has also launched single-artist partnerships for their Artist Series, with Beyonce and The Beatles signing on. The Beyonce experience features curated fitness classes set to her music and the HBCU homecoming-themed experience came with Peloton membership donations to 10 HBCUs, like Howard University and Texas Southern University.
It’s safe to say that Peloton has doubled down on the theory that the right music not only enhances the workout experience, but is a key component.