Universal Music Group Licenses Catalog to Equinox



World’s Largest Music Catalog Lands on Fitness App

At-home fitness enthusiasts who use Equinox Holdings’ Variis app will now be able to sweat to the likes of Lady Gaga, Ariana Grande, Billie Eilish, and Taylor Swift. That is because Vivendi SE’s Universal Music Group (VIVHY) has licensed its entire catalog, the world’s largest, to the Variis digital fitness app. The deal signals both the importance of at-home fitness amid the coronavirus pandemic and the music industry’s search for new revenue streams while most tours and concerts are not possible.

The partnership is a win for artists, who will reach new fans during fitness classes while also receiving compensation each time their music is used in a class. In the next year, Universal expects digital fitness streams to be among its top 10 revenue generators for digital licensing accounts. Currently most digital licensing revenue comes from streaming services like Spotify (SPOT), Apple (AAPL), and Amazon (AMZN).

New Revenue Streams for the Music Industry

As many restaurants, concert venues, and retailers remain shuttered due to coronavirus, the music industry has had to seek out new revenue streams. Social media services like TikTok, video game platforms, and digital fitness services have all become bright spots for the music industry. Fitness platforms in particular lean on popular music to draw students to their remote classes.

Today’s digital exercise classes attempt to mimic the experience of in-person exercise classes, which often take place in a darkened room with high-volume, high-intensity music. “These classes are like going to a concert—60 people in the dark rocking back and forth, riding together to the beat, boxing sequences to the rhythm. It’s our job to re-create the real-life experience where we can in an on-demand world,” said Equinox Media Chief Executive Jason LaRose.

Digital Fitness Market Forecasted to Expand

Since the start of the pandemic, the digital fitness market has boomed as exercise buffs set up home gyms with Peloton’s (PTON) stationary bikes, Lululemon’s (LULU) Mirror, and Apple’s Fitness+.

Equinox released its Variis app in March just as many of its brick-and-mortar gyms were shut down to curb the spread of COVID-19. People who don’t belong to Equinox gyms can now use the Variis app for $40 per month. Equinox, which owns the brand SoulCycle, also started selling SoulCycle stationary bikes for $2,500 in an effort to reach customers at home and compete with Peloton.

Economists expect the digital fitness market to be worth $24.7 billion by 2022. That represents a huge leap from $6.7 billion in 2017. With licensing deals like the one between Equinox and Universal, the music industry may be able to piggyback on that growth.

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