An antidote to Spotify?’ How Peloton is pedalling a new future for music

James Hall
·8 min read
The US bike and exercise subscription company Peloton is now a major platform for pop music
The US bike and exercise subscription company Peloton is now a major platform for pop music

The way people consume pop music changes every few decades. From vinyl discs to cassettes and from iPods to streaming services such as Spotify, the medium through which we listen to our favourite songs is constantly evolving. But one of the fastest growing music platforms in the world today doesn’t fit in your pocket or have an A-side and a B-side. It’s not even usually associated with music. It’s an exercise bike.

Peloton is a US bike and exercise subscription company. For a monthly fee, people can buy a bike or a treadmill and take part in live or on-demand “immersive instructor-led boutique classes” on the kit’s screen – with music blaring in the background. The number of Peloton “members” around the world has doubled to over 4.4 million compared to pre-pandemic levels. And musicians are taking note. Beyoncé, The Grateful Dead and Prince’s estate are among those who have recently signed deals allowing Peloton to use their songs. The company has even adopted structures usually associated with record companies: it has its own in-house music department with creative, deal-making and technology sub-divisions.

Revolving records used to be the lifeblood of the music industry. Now, revolving pedals have become the hot new thing.

And here’s why musicians are interested. The air has long-since leaked out of the traditional way of listening to music – buying a physical product. This has been replaced by digital consumption – downloading songs and, more recently, streaming them through our phones, computers or smart speakers. But streaming lacks engagement. There is such an overwhelming amount of music available out there (an estimated 50,000 new songs are uploaded onto streaming services every day) that it has almost becomes meaningless; listening to songs is so commonplace that it has become a secondary activity.

“Peloton’s importance is a reflection of the fact that the music landscape has become pretty stodgy,” says music analyst Mark Mulligan, the managing director of MIDiA Research. “There isn’t anything new out there and the streaming services have become pretty ossified in terms of market share. Spotify and co’s focus is on getting as much content as possible in front of people and basically turning it into sonic wallpaper.”

Prince’s estate has signed a deal allowing Peloton to use the late singer's music - Kristian Dowling/Getty
Prince’s estate has signed a deal allowing Peloton to use the late singer's music - Kristian Dowling/Getty

The dearth of live music over the Covid-19 pandemic has only added to this sense of disconnection between artist and audience. Peloton changes all that. It puts its subscribers, to use a Peloton-esque motivational phrase, right “in the zone” with the music. It reunites fans and musicians.

“Peloton has turned exercise into a very primary music consumption format. You are listening and engaging,” Mulligan says. “Artists are grabbing the attention of those people for a period of time and connecting with them in a really direct way.”

Beyoncé’s deal with Peloton last November illustrates how it works. Users can pick from an array of Beyoncé-themed classes set to her music (it’s not known what Peloton paid the superstar but it’s likely to be significant). There’s the “Beyoncé outdoor run with [instructor] Robin” or the “Beyoncé bootcamp with Jess”. As well as “bike” and “tread” classes, Peloton offers an array of yoga and meditation sessions such as the “Beyoncé yoga flow with Chelsea”. When the collaboration launched last year it was themed around the singer’s Homecoming album, with music and documentary footage featuring prominently in the workouts. Peloton’s head of music and former Disney executive Gwen Riley told Rolling Stone in November that negotiations took a year to complete. “It was a very big deal,” Riley said.

As Peloton has grown, its instructors have become almost as famous as the musicians it features. They’re brands in themselves. Head instructor and former lawyer Robin Arzón has 714,000 followers on Instagram. Meanwhile Ally Love has 573,000 followers and also runs the Love Squad, a motivational community with a large merchandise range.

Peloton isn’t cheap. The “Bike+ Family” package of hardware (a bike plus screen delivered to your home, plus accessories including shoes, water bottles and a workout mat) costs £2,745, while the most basic bike is £1,000 cheaper (you can pay in instalments). Then there’s the actual membership at £39 a month. A digital-only membership – with classes accessible through an app – costs £12.99 a month.

Some might call this a wallet-draining cult. Others would call it a branded lifestyle ecosystem with targeted content, a captive audience, health benefits and a regular income stream. In other words, it’s a marketing person’s holy grail. And anyone in the music business will tell you that technology platforms that actively engage fans are the future. Just look at the rise in TikTok, the Chinese video-sharing social network.

Computer games are also becoming a huge deal in the music industry. Last year’s nine-minute concert by an avatar of rapper Travis Scott on Fortnite was watched over 150 million times (taking into account YouTube views as well). Massive Attack and Idles have played at a virtual festival on Minecraft. And in January, Universal Music Group announced a tie-in with toy-maker Lego to allow children to make music videos using Universal’s songs and Lego’s characters. Songs are no longer three-minute blasts of escapism. They’re interactive monetisable multifunctional playthings.

Walking in lockstep with all this is the trend for rights holders to extract maximum value from their song catalogues. In recent years, publishing companies have been spending small fortunes buying up batches of famous back catalogues and treating them as assets – like gold or oil – to be bought, grown or sold. The best-known such company is Hipgnosis, which has spent hundreds of millions of pounds buying up over 60,000 songs by the likes of Neil Young and Blondie.

Merck Mercuriadis, Hipgnosis’s founder, tells me that Peloton allows his company to create “curated music experiences” with its tracks. It is a “massive” income opportunity. Hipgnosis has received almost $2 million (£1.43 million) in revenue from Peloton over the last two years from a standing start of zero, with plenty more expected. The number one song in its catalogue has been Don’t Stop Believin’ by Journey – it alone has generated over $350,000 (£250,000) in income from Peloton, Mercuriadis says. Extrapolate that out over Hipgnosis’s 60,000 songs and you can see the potential.

This is just the start. Mercuriadis points out that the music industry has only recently emerged from a 15-year period of rampant piracy where many people listened to music for free. This is no longer the case. It’s all legitimate. When it comes to Peloton, “you’re on your exercise bike every morning huffing and puffing and you’re consuming music legally,” he says.

Things have not always been thus. Indeed, it was only a year ago that Peloton settled a lawsuit filed by US music publishers who were seeking more than $300 million in damages over the fitness company’s alleged use of 2,468 unlicensed songs from artists including Adele, Taylor Swift, Bruno Mars and – yes – Beyoncé. Things got nasty, with Peloton at one point filing a counterclaim against the publishers for allegedly conspiring to fix prices. But they’ve all made up now, and Peloton is paying its way. It is cutting deals with publishing companies all the time.

Indeed, Peloton’s biggest problem now is keeping up with demand. Its shares fell by as much as nine per cent in a day last month when it said it was “inventory constrained”, meaning that people were having to wait too long for their bikes. The company is investing over $100 million in extra air and sea freight to meet the orders.

Inevitably, a backlash (of sorts) has already started. Last weekend, Saturday Night Live lampooned Peloton in a sketch. The mock infomercial introduced a bike called the Pelotaunt, “the only exercise bike that provides you with personalised at-home negative reinforcement and relentless criticism”. Its gung-ho instructors used “patented passive aggression” and “emotional manipulation styles” including Snotty Disdain and Insincere Praise to motivate riders. The sketch brilliantly and mercilessly highlighted the fact that Peloton is not for everyone. Despite the growing “Let’s go, Peloton… You got this!” brigade, there will always be people who’ll want to exercise or listen to music on their own, quieter terms.

But such jibes won’t stop Peloton. And its relationship with music will only get more sophisticated. Mulligan sees no reason why Peloton won’t become a “fandom platform” on which singers sell exercise packs directly to subscribers. Nor does he rule out musicians dropping new albums exclusively on Peloton in the future.

Music purists may balk at the way the industry’s going. But, as Mulligan says, artists will go anywhere to get people’s attention and “cut through” the white noise of the modern music industry. The Beyoncé Bootcamp is a major breakthrough. But it seems that the Peloton revolution has only just begun.