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Peloton Moving Toward Subscription Model, Says CEO

John Foley, CEO of Peloton, discusses the likelihood that the company will eventually offer subscriptions for its internet-connected fitness products instead of requiring an expensive purchase....
Peloton Moving Toward Subscription Model, Says CEO
Written by Rich Ord
  • “In five or ten years from now, I’d be surprised if (Peloton wasn’t available as part of a subscription),” says Peloton CEO John Foley. “I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction.”

    Peloton said in their Q2 earnings release that paid Peloton Digital subscriptions grew 210% year-over-year as they reduced the price of Peloton Digital to $12.99 and extended their Digital free trial period to 90 days during March and April because of sheltering in place restrictions that were in place around the world. Peloton also launched integrations with the four leading over-the-top TV platforms including Amazon Fire TV, Android, Apple TV, and Roku.

    John Foley, CEO of Peloton, discusses the likelihood that the company will eventually offer subscriptions for its internet-connected fitness products instead of requiring an expensive purchase:

    Moving In The Direction Of A Subscription

    In five or ten years from now, I’d be surprised if (our connected fitness products weren’t available as part of a subscription). I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction. It’s all in the name of affordability for our members, our current members, and new members, and making sure they feel incredible about the value.

    One thing I will point out is that my favorite metric last Q4 which was ended July 1, 2019, our subscriptions were used 12 times a month on average. This year, the quarter that just closed, they were used close to 25 times a month on average. So when you’re paying us $39 a month and getting 25 workouts from your household it’s close to $1.50 per workout. It’s just insane value. We’re very excited about that and we’re going to continue to push with more content and more access to our content.

    Bike+ Is Now The Best Bike In The World

    To the extent, we are having a hard time making bikes fast enough at the current price you would say we don’t have to change the price at all. Of course, we are with our better best strategy. With the better best we can have the premium product, the best product in the world, which the new Bike+ that we came out with this week is. Bike+ is now the best bike in the world and it’s at just under a $2,500 price point. Over time, it allows us to do a lot of creative pricing.

    Right now, the original bike that’s the best cardio machine on the planet loved by millions is under $1,900. From a finance perspective, it is under $49 a month which we’re very excited about. We do think that as we grow the SAM and TAM globally price point for our products is going to matter so we’re getting out in front of it.

    Peloton Moving Toward Subscription Model, Says CEO John Foley

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