Why Labels and Publishers Are Looking for the Next Frontiers of Licensing

Jeff Chiu/AP/Shutterstock
Peloton bike.

Seven years ago, when Simon Sollberger was launching the online health/fitness coaching app Pear Sports, record labels wouldn’t play. It was impossible to license music to accommodate cross-fades between songs, and snippets of tracks that could be jumbled into a workout were out of the question. Says Sollberger, “It was like, ‘Let’s see if you can get an appointment with the labels,’ and the appointment was six months out. The writing on the wall was, ‘It’s going to be a nightmare to get them to agree to this format.’ ”

Then, three years ago, Peloton broke the dam, licensing music for over 13,000 online fitness classes for its exercise bikes — and today, labels and publishers are aggressively seeking new frontiers for licensing beyond TV, movies and advertisements. “The thing that gets me up in the morning is nontraditional categories,” says Bryan Stone, Universal Music’s senior vp digital strategy and business development.

“It has been expanding for years,” notes Primary Wave founder/CEO Larry Mestel, who’s working with Shinola on an upcoming line of Smokey Robinson watches.

Fitness remains the hottest new sector. Pear Sports was able to secure music deals three years ago with the help of Feed.fm, a go-between for rights holders and licensees. Weav customizes playlists and song speeds for running and skiing workouts, and startup Tonal offers Pandora-style genre stations as part of its home-fitness devices. “The holy grail of fitness right now is to provide the right workout to the right person at the right time,” says Feed.fm founder/CEO Jeff Yasuda. “An obvious corollary is to provide the right music to the right person at the right time.”

Rights holders have come around to more bespoke opportunities: Music-lesson services Fender Play and Guitar Tricks license songs for instructional videos; Marshmello performed a Fortnite in-game “virtual concert” last February that drew 10 million players; some gas stations provide music at their pumps. “The music industry has been rebounding for the past couple of years, and many people tie that directly to Spotify,” says BMI assistant vp digital licensing Evan Parness. “But it’s not just one music service — it’s diversification.”

Licensing for these opportunities is mostly standard: A fitness company contacts both label and publisher and makes a deal for on-demand digital streaming rights; a gas station has to license performance rights from BMI, ASCAP or SESAC to air music in a public space; and companies that offer users radio stations based on certain genres must pay for an internet-only radio license. Peloton paid $2.8 million for music in 2019, but after it allegedly used Ariana Grande and Drake songs in workout videos without the required licenses, the National Music Publishers’ Association sued the company for $150 million. “It’s really tough to do this,” says NMPA president/CEO David Israelite. “Even a company as well-funded and innovative as Peloton is going to have its travails.”

Ryan Vance, Tonal’s chief content officer, is still optimistic: “It’s great to see the labels actually beginning to understand the landscape and make deals they wouldn’t have made 10 years ago.”

This article originally appeared in the Jan. 11 issue of Billboard.


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