"There is this inexplicable situation where Peloton seems to have licensed properly some music, but not all music," he tells Billboard. "I'm sure there are other publishers whose songs are being used that are not currently included in our complaint, but we always have the ability to amend that complaint in the future.... This could be the tip of the iceberg."
Music allegedly used by Peloton without permission include songs by artists Rihanna, Bruno Mars, Lady Gaga, Katy Perry, Justin Timberlake, Shawn Mendes, Ed Sheeran, Wiz Khalifa, Thomas Rhett, Ariana Grande, Justin Bieber, Florida Georgia Line, Drake, Gwen Stefani and others. More songs could be added to the suit as well, dating back before 2017, when the playlists weren't publicized.
"It's not just a case of where they only cleared a fraction of a song; there are many instances where they didn't clear any of the song," says Israelite. This is not just a case of fractional licensing, this is a case of wholesale failure to secure licenses in some instances."
Peloton launched its at-home streaming capabilities in 2014, offering a subscription service with more than 13,000 workouts -- most of which use music to engage users. The company was recently valued at $4 billion.
“We prefer to avoid litigation,” Peter Rosenthal, Downtown’s general counsel, said in a statement to Billboard. “But where we see the willful and ongoing infringement of so many works over a period of years, we will act to vigilantly enforce our songwriters’ valuable copyrights.”
Now Israelite says this alleged infringement makes him question how Peloton values music, despite it being an intricate part of its business model. Still, he says, as similar licensing deals are becoming more prevalent in music, he sees this as the "exception" and not the "norm."
"Peloton has complete control over the music that it uses and it should have licensed all music prior to using it in their programming. We've seen other companies take the approach of making sure they've secured proper licenses before going to market," he says. "It feels like disregard, I can't believe that it would be ignorance since they secured some licenses. This is the equivalent of making the movie Bohemian Rhapsody and not bothering to clear the rights to use the Queen music."
Israelite continued, "NMPA has a long history of protecting the rights of our members and their songwriters when businesses exploit their music without proper permissions. We've filed many suits in our history, we've never lost one. And that's one of the reasons why we exist is to protect these rights. So I'm hopeful that this becomes an area that NMPA doesn't have to spend time and resources in, because I would like to get to a place where businesses respect the songwriters that are providing an important part of their business models. But when we come across an example is egregious as this one, we're compelled to act."
A Peloton spokesperson shared a statement responding to the lawsuit, saying, "We just received the complaint this morning, and we are evaluating it. 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."
UPDATE: This story was updated at 3 p.m. EST to include a statement from Peloton.