SoulCycle's music licensing practices raise significant concerns about fair compensation for artists and songwriters. The fitness giant, which heavily relies on music as a core part of its business model, pays surprisingly low royalty rates through performing rights organizations (PROs).

Key Points:

• SoulCycle generated $112 million in revenue in 2014 across 36 locations
• Music is described as "the most important part" of their business model
• Current BMI licensing fee cap is just $2,123 per year per location
• This represents only 0.01% of a single location's class revenue

Revenue Growth:

• 108% growth from 2012 to 2013 ($36M to $75M)
• 49% growth from 2013 to 2014 ($75M to $112M)
• Projected expansion to 250 locations

Distribution Issues:

• PROs distribute revenue using outdated proxy methods
• Relies heavily on radio and TV performance samples
• Favors "Top 40" hits over niche genres
• Modern tracking technology exists but isn't utilized

Industry Context:

• Fitness center revenue increased 104% (2000-2014)
• General licensing generated $226M for PROs in 2013
• New media licenses only generated $90M in the same period

Recommendations:

• Update PRO licensing fee structures
• Implement modern music tracking technology
• Improve distribution accuracy
• Adjust rates to reflect music's value to business model

This situation highlights the need for PROs to modernize their approach to general licensing, particularly for businesses like SoulCycle where music plays a central role in their service offering.

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