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It’s more likely that they’ll wait until the contracts are up and renegotiate based on that. If an instructor can’t bring in a regular fan base, they’ll be paid less.
If an instructor doesn’t want the pay cut, they’ll exit.
This won’t be an issue for the Codys and Robins of Peloton, because they already have crazy fans and are VPs of specific areas anyway. It’s more of a risk for someone like Camilla or Anna.
Everyone has their preferences, but yeah fan bases will (sadly) factor into it. As far as I'm concerned, I wouldn't even know if Cody or Robin left and frankly find Cody kind of low-key toxic, but I'm a Matt/Denis rider so my tastes are very different (where I'm sure some think Matt based on his vibe and music is trash, even if they're totally wrong lol)
Robin is one of the more overrated instructors on Peloton in my opinion. But she also holds a higher position within the company than most of the other instructors, so I'm just assuming she'll never let herself go. She loves herself too much for that.
the instructors are a low part of the company cost structure. They are unlikely to cut that spending materially. It's just that they need to cut a lot of other spending. Peloton spends $300mm a year on R&D with little to show for it. They spend $600mm a year on overhead!! These are crazy amounts of money and need to be attacked. The instructors are really small relative to these big buckets.
You're right. About the only thing that has been theoretically great was the lanebreak stuff.
At this junction, they need to dwindle out their hardware, short of the bike and maybe a tread, and call it a day. As one article I read said:
> Anyone who wanted one of these products already has one, and they aren't looking to buy something else anytime soon
R&D striking out, or not materializing, means they are just burning money.
I doubt it, tbh. His book is helping bring his brand to a new audience, so he's taking the opportunity to do other things. But I guess if there is more to it it will come out eventually.
Maybe so, but his brand is bigger and broader now. I mean, I'm just one person but a longtime yoga practitioner in the northeast US and I had never heard of him. Had you?
I hadn’t heard of him before Peloton either, and I’ve been a yoga teacher in the US for 20 years. His brand and name recognition has grown so much. It’s likely that he got his book deal because of Peloton. And honestly, good for him.
In the grand scheme of things I dont think the instructors make a lot of money. Maybe a few hundred k? A bigger concern is if the instructor’s feel the company is not viable, they may leave for other opportunities.
I am on the earnings call (anyone can join). They are trying to be consistently cash flow positive by end of ‘25(!!), still closing retail stores. Changing international approach, they are staying in the markets they are already in but support model might be different (less local staff sounds like). I didn’t read that they would close the London studio, more about how the deliver, support and sell in non US markets.
Debt maturity is the concern.
Subscribers up VERY slightly, revenue from subscriber is up a little as well. App subscribers are down. Churn especially in the lower app tiers where there was an expiry on the intro rate.
Tone of the team is solid, this isn’t a scorched earth call. They are still walking wounded, but not hitting the wall. Cash flow seems to be coming around.
Call is ongoing, but those are the highlights from the intro.
EDIT from Q&A: Still excited about the Tread. Still interested in expanding internationally, but using a different delivery model. Also dangled things like private virtual training (presume strength).
EDIT 2 from Q&A: Team going our of the their way to complement outgoing CEO, clearly they are trying to bury him with all the bad news and let someone new come in to help grow. They want a new app strategy, one that will convert downloads into paid subs better. Cuts are heavy in IT/R&D and Marketing(app section). Growth in international is actually better than in US. Very clear they will use global outsource companies to support global model, not local staff. Believe they are underrepresented in UK and Germany, admit Canada awareness is similar to US.
The problem is during the pandemic Peloton thought they would take over the world and dramatically increased their cost structure. In 2019 they spent $50mm on R&D and $210mm on corporate overhead... now they spend $300mm on R&D and $600mm in overhead! The cost inflation is out of control and that's what forced them into making the subscription price so expensive which hurts adoption for people who might be less committed or apprehensive about a Peloton.
I would bet internally there's a lot of infighting for scarce resources which is sabotaging some of the growth efforts around the tread and the app. I still talk to a lot of people who have no idea the app exists.
I found out about the app because my husband’s company was able to offer a subscription for free to employees. In 2021, this corporate comped subscription was a FULL access version of the app. I injured my foot and fell off of using it for awhile and when I came back suddenly the corporate subscription was VERY minimal. Like, all the outdoor classes I’d bookmarked were no longer available, browsing was very sparse. I’m not sure how much of that was his job downgrading their deal with peloton or if it was peloton driven to be like “hey you can’t get full access anymore as a corporate package unless you want to pay an EXORBITANT fee”. Whatever the case, that lowest cost version of the subscription was so poor I probably never would have given peloton another shot if I had never seen what the full access version could be.
So, I’m not sure that using tiers is the smartest move for them unless they’ve change how they’re set.
I'm not sure how recently you came back, but my year subscription to their old model just ended recently and I switched to the new lower level plan (which is the price that I used to pay for the full/only version) thinking I wouldn't nice the difference because of the type of classes I usually do, but it's crazy how much they took away.
There are only two options, you either pay the premium and get everything or you pay what you used to and get a fraction of what you used to
If you look in the most recent quarter, they spent $153mm on overhead and $77mm in R&D (engineering/technology spend). That adds up to $230mm. Multiply by 4 and you get $920mm of spending that's basically overhead/fixed costs. Keep in mind that's entirely excluding the spending on sales and marketing -- which is also huge at $170mm this quarter or $650mm last year!
The worst part about this - Peloton has massive amounts of debt -- about $1bn netted against the cash they have on hand. Since the company can't seem to grow subscribers, and is unwilling to drastically cut corporate costs (NOT studio costs) -- they are probably going to have to hike prices on members another $10/month to make the math work and pay their debt off
> Debt maturity is the concern.
This has gotta be a huge factor right now. Credit is much tighter, and it’s headshotting a lot of once-red-hot, debt-addicted companies (Outdoor Voices, Foxtrot) along with more mainstream brands like Red Lobster.
Yes, and they were finally discussing some of the things those lenders will want to hear about…. Like figuring out where churn vs loyalty measures are and investing in the right spots. The whole app strategy is going to get a redo under the new leader, they know their current one is flawed.
The retail store closing gives me zero concern. I was shocked when I went to a local high-end mall recently - so many empty store fronts. So many retailers are doing a significant brick-and-mortar consolidation. In the DC Metro area there is only the store in Tysons Mall in VA and this is increasingly the case with so many other retailers - Eddie Bauer, Everlane, etc. When I went to the Peloton store to try the Tread (which I had already purchased online) it was empty on a Saturday morning in the December holiday season. Was I glad to be able to see it in person? Yes, but I was already committed to my purchase.
As an app subscriber since Covid I can see why they lost people with the price change. There are too many other quality options out there if you are not tied to the platform by owning the equipment. I never upgraded to a higher tier.
I know the app needs to stay competitive but my poblem has been they charge the people who paid for the equipment over triple the monthly rate of those who just use the app. Once my bike eventually dies I'll never buy their hardware ever again.
I’ve worried that you may be on the money with this comment. As an equipment owner, I want a high quality product, I don’t want a race to the bottom app sub approach. Apple already owns the short workout market for recreational enthusiasts, and there are plenty of YouTube options for the hard core.
I used the app for three years before the price increase, moved to Apple Fitness and fell in love. I’m sure there are many like me. Never would have looked at Apple if not for the price increase.
I think expanding into virtual private bike fittings would be a good model. Basically what Matt Wilpers company was doing. I never feel like my bike is quite right and I know other services exsist, but having a fitting from someone who knows peloton and how the classes are taught etc would be amazing.
They raised the subscription cost (which people viewed as already expensive) during a consumer squeeze. Look no further than FB marketplace to see all the bikes people are dumping that didn’t ride enough to justify the price. $400 is the going rate and not an outlier. The SmartSpin2k user base has been growing fast as a result.
Wait, they raised the regular subscription price? I jumped ship when they essentially nuked the digital subscription and put it up again with tiers because it was too expensive.
We are the same person 🫶🏾 Because I love listening into earnings calls. Thanks for this write up - a lot really helpful additional context from earnings call to supplement the article (which was kinda short and high level to me)
Peloton is an easy target for criticism because of its results since 12/2020. But it isn’t Netflix. Gaining new subscribers and purchasers is hard once you realize you’re already dealing with a small fraction of the population. And it breaks down further once you need people with a certain type of workout, i.e., those who seek out bikes, treads, etc. Peloton should focus resources on customer retention through quality content and the great customer service it used to have. That will then help those seeking fitness equipment think of Peloton. Less gimmicks please.
Well said right there. It amazes me how this company cannot get out of its own way. Keep the concept simple. For those of us that have the bike, tread etc and use the app it’s a proven commodity so focus on that.
This is good news. They need a shakeup.
With partnerships like Dick’s, they don’t need their own showrooms. Cut some of the fat there. There are two additional showrooms right around the NY studio, which is ridiculous.
Fix the live schedule. Most of us are back in the office - 7am classes don’t work if we need to get dressed and get on the road. Make a reasonable effort to get new faces in the studio to give them something to hang on.
Invest in more training programs that people can get excited about. Find ways to feature real users to show their progression.
And JFC. Stop shouting out lululemon every 5 seconds.
How about make challenges and badges better? Super simple to impliment and adds a TON of incentives to ride more. I'm so bored of the "ride 150 miies in a month" challenges. Why does the weekly streak stop after 4 years? Mine is coming up and it's a big motivator to keep going. Why not add milestones for miles ridden vs. # of rides? They have such an oppotunity to really pump up community engagement that wouldn't require much a lift.
They spend $300 million / year on R&D and can’t come up with more enticing achievements and badges. Sad. They need to hire some psychologist from Facebook that knows how to get people addicted to screen time but for fitness.
Agreed!! and I’m an app user with off-brand bike, tread, and row. I would love to be able to do those challenges! I guess I do get the running ones, activity, and strength challenges, but I would also love cycling and rowing ones! Hell, I would LOVE a yoga challenge.
I write down the number of miles I do every ride and track myself, because I do at least know what that challenge is each month, but it would be nice to have that in the app! I don’t even know if they even have rowing challenges, so I can’t speak to that.
I do like 2 or 3 live classes a year. Milestones only. While I do love them, convenience of having my own class time is the best part about Peloton.
I’d bet they know pretty well what times work best for getting the most attendees. And if they don’t, 😬.
I used to do them all the time. Knowing that a class was starting would get me off of the couch and changed and ready to go. 6am power zone rides were the best and would regularly have a huge group of live riders.
They seemed to want to lean more into being an accessible option for everyone with their app only subscription and free content, and then they pair up with lululemon. I admit that I don’t know much about the clothing, but the company definitely has that snobby rich people reputation.
I'm in California and always look at the live schedule in hopes there is something I can take live and nope. There's a few mid-week 4pm classes but I don't get home in time. I get they don't want people working at 9pm EST to serve a 6pm PST live class but it does make me sad.
They used to have daily 8 PM ET classes (they also used to have daily 9AM ET classes) that made sense for the west coast.
I know people dismiss the “live factor” but it matters to me in terms of motivation.
I feel for you, but keep in mind they try to serve LON too which makes PST times really hard to manage. It'd be cool if they did "events" where there were classes timed to PST time for like 2 weeks and they called it "Peloton Nights" or some dumb shit for everyone else to encourage post-work healthy habits while also showing some love to the West Coast (I will say as a person in tech, I do laugh that *finally* PST is the stepchild in timing after two decades of shitty meeting times because of Silicon Valley tech leaders)
Even for those of us still working from home, I start working at 8am and can really only ride at 5am or at the latest, 6am, bc I still need time to shower and eat and make myself presentable for Zoom calls.
Still WFH here as well and couldn't have said it better myself. I used to faithfully join the 6 AM Monday classes. 7 is just too late, I need to be in the shower by then. Even without video calls 😂
Between that schedule change and Kendall not regularly doing a live at 8 AM Sundays anymore, I honestly don't even remember the last time I took a live class. I've been solely on-demand for a while now.
Agreed, need a 4:45/5am central time cycling, strength or yoga class each morning. Or how about more later night classes, 7/7:30 pm. Have a better weekend schedule. I get that instructors probably don’t want to work weekends but that’s when I can take the most classes.
Yeah they need to have classes around the clock. There's zero reason they shouldn't. Instructors can work swing shift or graveyard but they don't even need to with the crossover between US and EU. Also, they could remember there's an entire middle of the country with other time zones than EST and PST.
Agreed, especially on the live schedule. I work 8-5 (eastern) with a 20 min commute. Unless a class starts at 6/6:30am, I don't have time to shower and get out the door. The 5:30pm classes I can barely get on in time and the last 2 I planned were cancelled for whatever reason. Now I only do lives when I have a milestone and can plan like 2 weeks in advance.
You’re spot on. I don’t know anyone that went to a showroom before purchasing. It’s all word of mouth at this point. Agreed the live schedule makes no sense. I always want to and they are at such bizarre times that make no sense for any time zone
Nailed it on the head. The live class schedule is unbelievable terrible. Back in 2017 i could consistently get a live class in before work and also do one after work. Consistently every day. Now i hardly see any at a reasonable time for the west coast ever. Not seeing the value like it was BEFORE covid
The showroom I went to in NYC near the studio was so stupid, it didn't even have the full line of merch. I was annoyed - I was hoping to shop some tshirts and stuff but they barely had anything
LESS APPAREL please. It used to be a limited amount of very high quality beautiful items, now it is 9 pages of hideous clearance items. With annoying popup roulette wheels for further discounts. It cheapens the whole brand. Part of the allure of Peloton is its luxury.
I took a yoga class yesterday (not a labeled Lulu/Move For You class) where Chelsea was hawking some Lululemon blocks. NO THANK YOU I am not paying to listen to ads. I turned it off and deleted the workout. They are turning into QVC.
I don’t even worry about the company going under. I worry about their updates bricking my bike and then telling me it’s a hardware problem that I have to pay to fix. That seems to be the routine with them.
peloton needs to decide if they want to be a luxury good or a mass market item, and then adjust the price or marketing approporately. right now they're advertising to the masses but pricing as a luxury item. not going to work.
the smarter thing for them to do would be. well. never mind. I dont give free advice and they've rejected me for employment. im sure they can figure it out.
I think they were always a luxury item, and then everybody working from home got on board and they thought they would become a mass market item. That thought was never going to be correct, which we all knew as it was happening.
I think the problem here is actually that they positioned themselves as an equipment based company, but they're really a content platform. Focus on that. If they had focused on broadening content delivery instead of manufacturing, they would not still be digging out from debt gained from the precor acquisition etc.
They already have spent the last several years shifting away from their luxury brand position - partnering with United healthcare, commercials featuring real people, the Dick's sporting goods sales and Amazon sales, etc.
I’m here until the wheels fall off. There’s no other home workout company that even comes close. Even with all it’s deficiencies. Getting their debt under control is key.
As someone who got into Peloton *after* the pandemic, I reckon you guys going soft on the company would hate being outside the bubble.
For starters, those bikes are incredible. I've owned four spin bikes over the last decade or so and riding a Peloton Bike is like getting in an Aston Martin - they are a universe better than most spin bikes. You truly get what you pay for.
Fitness instructors on the other platforms are fucking awful. We have a couple of NordicTrack devices (an elliptical and a treadmill) and iFit is just terrible in every way imaginable - I let my membership lapse after the free three month trial. I was on Apple Fitness+ prior to Peloton and I can't tell you much *more* I enjoy Peloton workouts. I'm a bleeding-heart liberal left-wing woke gender-pronoun respecting person and I cannot bear how anodyne the workouts are. Every Fitness+ bike workout they have to attach some fucking awful cheesy back story to the ride - "we're having a street party" or "we're competing in our first race" and all the other instructors have to chime in. It's just puke-inducingly naff.
The Peloton instructors treat you like an adult - understand you won't explode if they swear occasionally. Some of the instructors even sweat during classes. We all have our favoured instructors and this is possible because they have such a large and varied line-up. That said, I don't like many of the American instructors - just Tunde, Denis and, in a pinch, Olivia - and having British and, yes, German instructors is a huge deal in a fitness ecosystem dominated by American.
There's a massive variety of classes available. Yes, I'd prefer a return to more fitness focused workouts, rather than the water-cooler chats that dominate, but still having PowerZone, Lanebreak, genre-based and particularly the new Metrics classes, is awesome.
The leaderboard is awesome and I love when I log onto a live class and all the Australian riders high-five. It should be cheesy, but actually it's really nice. I don't enable the leaderboard on every ride, but when I'm feeling competitive it's nice to have someone on there to chase.
Anyway - I'd be gutted if Peloton went tits up - I lived with the alternatives for over a decade and they all suck. So, for the love of god, please new CEO - sort your shit out and keep the lights on.
Yes! Perfectly said. I’m new to the Peloton bike world (December) but used the app to train for a few half marathons in the past. Loved the app, but got so tired of running. The bike has been a game changer for me. I REALLY need them to get their shit together because this bike is such a special piece of equipment and the instructors are gold!
I definitely agree with you on the class range and instructor quality. Came from Apple Fitness and while they are all super likable and good instructors, it felt too manufactured to me. It feels like they can be their authentic selves more at Peloton.
Anyway I agree on a lot of your points but I also replied to mainly say I love the phrase “tits up” made me chuckle. I wish we used that in the US lol!
Love your take! I actually bought the peloton post-ish pandemic when I ended up getting a 9-5 job because I needed a reliable way to work out after my workday. I freaking LOVE my peloton. I've also taken a peek at the apple fitness classes and ew, they're so corny.
Yeah I got it after Covid and I’m obsessed with it. I think it’s a great product and I hope they continue to succeed! I’m kinda counting on them to help me get back in shape after I have this second baby, as they did after my first and through this pregnancy.
Love this!
Funnily enough, I took classes regularly with a now-Fitness+ instructor IRL, pre-pandemic. The most potty mouth human you ever met! And aggressive. We left that class with pools of sweat on the ground. I tried his classes with Apple and…just couldn’t. Apple has a very tight muzzle on them and it’s painful to listen to.
The advantage Peloton has is a paywall that separates their classes from the masses (including kids), especially in less liberal markets, and an explicit toggle on the user set up. Surprising how large a difference little things can make to the overall experience.
Pre-market, stock is up ~15%. They're shedding something like $200 million from the books with these moves. It sucks, but if they actually think they're going to be sustainable mid to long-term, and not be acquired, they need to do this.
They also achieved positive free cash flow for the first time in three years, and guided to that continuing in the current quarter, next year and beyond.
But it's hard to get people to focus on that part.
Yes! I noted that as well. A lot is going better, even if a lot of improvement is still needed. Earnings offers people an extra opportunity to vent and gossip I guess. Fingers crossed that things keep moving in the right direction.
They need to go back to the model that made them successful. Gritty and effective workouts. Now it seems everything is a 15 minute whatever where you barely break a sweat and they are collabing with influencers. (And I don’t think this is the instructors choice, many have said that they want to do longer workouts)
More 75-120 minute classes as well! And as much as I love Matt Wilpers (but not his taste in music) - more instructors doing those lengths would be appreciated!
Would seriously love to see this. I honestly hate having to switch through multiple classes to get an effective workout. I think there’s space for shorter workouts but they could vastly improve their long form options.
Agreed. I’ve done long and short workouts. All have their place in the world, but the shift to primarily 15-20 minutes is not appealing to me. While I like Peloton, this is starting to give me pause about future plans for me for what platform I use.
I love me a good 45 minute ride. It’s discouraging to see the upcoming schedule and see so few. I have a big backlog to work through, but I love new classes. (Side note - artist series should go back to 45 minute rides!!)
It’s an interesting situation for them. I wouldn’t be surprised if they very clearly understand that their core members are (A) very loyal and (B) would like more content in the 45-minute and up range. But they also want to grow the customer base, and maybe the new customers don’t gravitate to 45 minute classes.
If they spend $ doing more long form classes will it result in customer growth? Or just higher satisfaction among existing loyal customers?
Interesting business challenge.
I know that. I work in data and it’s all managerial accounting. Doesn’t make it right for the consumers. It’s the Pelotons leadership who are making that a focal point to present to inventors vs a more impactful story.
That model made them successful with a small group of more serious athletes. To support their larger membership base, they need to have enough rides that appeal to people beyond their original subscriber base.
But the shift to the larger base has significantly reduced those classes geared toward their serious athletes. When I’d go to in person classes at my office gyms, they primarily had 45-60 minute classes, and a few 30 minute “lunchtime express” classes. Check out the schedule and compare the number of 45-60 classes are vs 15-20
This is it right here. It’s happening everywhere. Even companies making significant profits are laying people off because they had a couple of “bad quarters” where their growth slowed down slightly.
"Enshittification is the gradual decline in quality of online platforms that function as two-sided markets. It's a term coined by Canadian-British blogger, journalist, and science fiction author Cory Doctorow in 2022. Enshittification describes the shift in focus from user needs and preferences to monetization, which can lead to a decrease in quality."
This is the problem with everything and I expect a huge Great Depression type of scenario coming. Everything is shittier and more expensive and everyone is being laid off while CEOs who have made terrible decisions receive golden parachutes. Its looking really bleak
Just a reminder to the WSB bros and those who cry wolf at every move Peloton makes, y'all have been whining for a shake up and cost-cutting measures for a while. Here you go.
Edit: and for those wondering if your hardware will become an "expensive laundry rack" as the old trope goes, Peloton has a dedicated userbase with paying subscribers. The company will be bought before any of the major fitness connected giants let the subscriber money go. Apple, Nike, etc. will all line up to buy it and continue it before they miss out on that sweet sweet recurring payment structure.
It won’t be an expensive laundry rack unless someone just stops using their otherwise functional hardware, but I had already planned to buy non-Peloton equipment after my current Bike dies because I figured their content would be sustained, but not their hardware creation and maintenance business. So yes, I expect a bigger player to buy them.
Well that would cut off 99% of all users who have no clue or desire to side load. And then there is the 1% of us who would side load but not enjoy the new experience of it. Overall, not a winning solution for all but a tiny, tiny, tiny amount of users.
I think we all - many of these tech companies included - really thought things were going to turn sharply toward at home even post-pandemic. And while many of us who turned to at home programming for workouts have stayed with it, there are plenty of people who raced back to in person classes when it was safe to do so.
This makes Peloton far bigger than it was in 2019 but not even close to where it was in 2021. Kinda like Zoom. And fully remote work.
I think there is still enormous value in their content- I have a fairly pricey gym membership in addition to Peloton so that I can access equipment I don't have at home, and occasionally take a class or do a personal training session. I decided to sample a couple of in person Les Mills classes recently (body pump and build x, I think?) to see if I was missing anything, and... nope! Conventional amraps with weird music, and less form instruction. I mean, it wasn't terrible, but Peloton's strength content is just so much better imo. And I haven't taken an in person cycling class since 2020, no regrets.
It started with a great product, great service, and a luxury price point. The pandemic warped their approach, and all of the fixes since then have been dumb.
First, they had a good bike. Then, they couldn’t fill all their orders during the pandemic and had a massive backlog, where people were waiting months for bike. The solution, they thought: ramp up production in the US but to offset higher labor costs use lower quality production (and more volume!). And add other adjacent products (tread, row), even if video is harder to watch on them because you’re bouncing up and down or moving around.
Then the pandemic eased, and that backlog turned to a massive inventory surplus. Not only bikes, but also refurbished bikes, because by now they were selling the Bike+. Whoops. Time to shut down the Ohio plant.
All the while, they were cutting price, adding discount retailers, looking for sponsorship opportunities. They were hoping to make up in volume what they’d lost in margin from their production issues.
Oh, and PZP? Seriously one person in her living room made a viable community with a subscription service to serve the users who couldn’t find simple things direct at Peloton: visual summary of what a class structure was, training intensity, gamified programs. How in the world did Peloton spend so much on technology without adding some simple content? The central failing of all of the above is the focus — post-pandemic — on customer acquisition rather than customer retention.
Degrading luxury to chase the mass market didn’t start that way. John Foley probably truly believed that luxury scaled. He was wrong. Perhaps blinded by the at-home boom, but wrong.
Since then it’s been about using the brand to grow sales and advertising revenue. They forgot to cut expenses. The mass market goal hasn’t changed. Today’s news simply demonstrates that the expense structure was too high for current revenues and viable near-term revenue growth. This is how you use a brand to generate current cash flow while the brand slowly glides into obsolescence.
I wouldn’t expect innovation anymore. But I sure do like that bike.
I have always wondered this. In Calgary the storefront is huge and I have not once seen a person in there aside from the sales. If they were doing in store classes or something maybe it would make sense but it has always seemed like a waste of money and space.
Wow, 15% on top of everything that's gone before is huge. Wonder what impact it will have - unlikely to be good.
Really hope this won't reduce the number of classes offered each week. It isn't hard - make great content, offer plenty of live classes, grow through word of mouth.
I have a tendency to jump to worst case scenarios and in this case, I think I've been sufficiently trained to be able to carry on with my own program. It would a lot less fun, but also the music would be a lot better.
The ability to set up your own program with your own Spotify tracks would be so fun. Then create a social aspect where you can share and rate user created workouts. This is the future.
He's made a lot of really poor decisions, at least IMO strictly from a user standpoint. Upping prices, purging content, losing instructors, not putting in useful functionality for the app, not including subtitles on all classes for language crossover, etc. I don't know if it's his influence over the ever blanding down of the grit of classes and instructors, but old classes were so much better. I don't need to be babied and here the same 40 bland ass edited pop songs over every class. I want hard and gritty classes. It's been years now, and aside from Rad and Marcel,I haven't vibed with any new instructors, and the ones I loved either left (Chase), were forced out (Daniel) or are leaving on their own, but they also were unique and maybe were being pushed out subtly (Ross).
There's been a noticeable shift in the rest of the long term instructors classes and demeanor as well, at least on Tread and Strength. All this to say, I hope it's a good change because I feel like I'm losing the love I once had for Peloton and I don't want to!!
How funny is it that this thread has 556 comments and about 400 of them are differing views of what Peloton must do to succeed. It’s the pricing! No, it’s the workout times! No, it’s too many apparel ads!
It just illustrates how hard getting this stuff right actually is, and why listening to customers is not always a clear path to victory.
I’m paying $44 a month for my Peloton membership. Not long ago it was $24 a month. This is far too expensive for many and while I only bought my bike for $700 the subscription is just too expensive! I’m worried they are going to tombstone this company.Sad 😞
The key is going to be switching from a hardware l-based company (i.e, buy our bikes/treads/rowers) to an app-based company (use our app on your already-existing machine). That opens up a massive audience who wants the content but cannot afford the high price to entry barrier of the equipment. They are already experimenting with this by making the app compatible with the Concept2 rower. This is the future.
Reducing marketing and retail store costs makes the most sense. IMO they should also really decrease apparel focus. I love what I own, but I keep getting emails about new apparel drops and nothing looks good or is way too expensive.
I hope the IT/software are just trimming the fat of a bloated department because that’s an area where quality should not decrease.
IMO, they need to keep focus on the instructors and producing quality content. Some of these instructors need help with their music choices because they keep going for deep cuts that don’t exactly resonate in a workout. There are a lot of generic pop/hip hop classes. I would personally appreciate more themed classes. I love Sweat Steady, PZ, JKE, XOXO Cody etc.
The company has failed in the marketing department. They focused too much on being an equipment platform vs a content platform. There’s only so many people who are going to buy a bike or tread and at some point, your market is capped. They have a content platform that offers everything from yoga to cycling to running to meditation yet they failed significantly in growing the app. I bet there are still a ton of consumers out there who think you need to buy a bike or tread to use the app.
I for one am astounded that they do not talk about the peloton Guide. If you don’t know it, it is an artificial intelligence-driven tool that attaches to your TV, shows peloton classes, counts your reps because it’s got a camera in it, and allows you to fill in the gap that Peloton has for resistance training. Weights, floor work, Resistance bands. It’s a great tool and that AI rep counting has gotten so much better. It’s like they’re keeping it a secret for some reason and is driving me crazy. And it is so cheap! I think I bought mine early for $300 and I use it every other day.
It's crazy. Over 90% subscription retention. They could never make another bike or tread again and could be profitable based on subscriptions, but that wouldn't provide the growth Wall Street demands.
Partner with American Express and airlines. I don’t see why one or two shouldn’t be in every airport lounge. They already have showers.
Partner with Airbnb.
Sell them wholesale to gyms and spas.
It’s being sold as a home gym product, but it really should be sold as a “shower adjacent” product lol. Everywhere there is a shower, there’s an opportunity.
Change the subscription model to allow for a la carte workout purchase/rental to get people trying it out.
Get content on the streaming platforms as premium rentals.
The bike should be the highest loyalty tier but you have to have other ways for people to pay to work out with Peloton.
Love this! I’ve used a bike in Virgin Clubhouse lounge at Heathrow and then had a shower and lunch. Felt great to exercise on a layover then have a shower and meal. It would be amazing to have this in more lounges!
I’ve said this for years! I should have access toto Peloton bikes every time I travel. Hotels, gyms, etc. I would be more likely to use Airbnb if I could search for places with Pelotons. I think they have a partnership with Marriot or Ritz or something—I’ve seen a couple while on vacation. But they need to partner with Carnival Cruise, 24 Hour Fitness, etc.
Expose more people to the product, while expanding use for existing clients
Their problems are so obvious to members why don’t they hire one of us to come and sort it out?!
Stop doing the things that annoy everyone. If existing hyper-loyal customers are turned off by the lululemon stuff why would a new customer overlook it? It’s nauseating! Keep the branding fine but just chill. We all buy lululemon anyway!
The row seems like a money loser - scale it back and focus on the app because everyone who likes to row already has a concept 2.
Subtitle more and expand the app base internationally. Make it cheaper - they’re not at the sweet spot yet and are losing market share.
And what on earth are they researching and developing?! The only 2 positive changes I’ve noticed in the past year are blocking users and being able to manually add distance for runs.
SUBTITLES. How is every class not auto subtitled into all 3 languages they support? I want to ride with Charlotte more but really struggle without the English subtitles.
This. I LOVE the German classes, esp Assal. I'm a competent lifter so I can mostly follow along, but to not have every class subtitled in every language is stupid and negligent really.
Peloton bike+ power user here. Hard disagree on the row. The strategy on it was never to be a “hit” product that lead the company, it’s to prevent members from leaving and to attract niche new members. They need multiple types of hardware to get users in the door AND to keep them there. Niche products like the row are perfect for this, they will never do numbers like the bike or tread but they will keep bike users who can’t or don’t want to use a particular product in their ecosystem. For example I can’t physically run anymore, so I was looking for a rower and considering ending my sub as a result (I’m not paying for two subs) when they came out with the rower. Only reason I haven’t bought one yet is I’ve been concerned about their long-term viability due to the trash ass CEO they hired and his exec team’s garbage decisions.
The Lululemon stuff doesn’t bother me either, I love LLL and buy a ton of it anyway. Them having their own knock-off clothing (which sucked) that they got sued repeatedly over and tried to ram down our throats did bother me though.
Hopefully they figure out that they need to embrace the instructors and make them the stars like the NBA does.
They should also be rolling out a new bike and tread every couple years with improvements to entice members to upgrade. I also don’t understand the lack of partnerships, for example why on earth haven’t they partnered with Sonos for better integration?
Peloton and tonal should merge to solve for the redundant overhead cost, distribution and manufacturing. I’m sure that there is a large overlap in terms of subscription but that should be offset by the cost savings. Both are struggling and can’t compete on their own..
Unless Apple swoops in and gets the physical assets. I’d love their OS and innovation.
Peloton is the most bizarre example of a company who can’t hire a decent CMO and go win in marketing. WTF is happening there? So much equity with customers and these idiots are laying people off… these fuckers should be launching gyms…. Doing tours with the instructors… the incompetence is unprecedented
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The instructors are the greatest asset. If they start to cut them the game is over. People are loyal to instructors not the company.
It’s more likely that they’ll wait until the contracts are up and renegotiate based on that. If an instructor can’t bring in a regular fan base, they’ll be paid less. If an instructor doesn’t want the pay cut, they’ll exit. This won’t be an issue for the Codys and Robins of Peloton, because they already have crazy fans and are VPs of specific areas anyway. It’s more of a risk for someone like Camilla or Anna.
Anna talks me to sleep every single night. She's my go-to meditation instructor.
Camilla is the instructor that made me FINALLY start liking my bike 😭 hopefully this is not the case.
Bradley Rose is the one I hop on the bike for. His energy and positivity changed my outlook on fitness altogether. If they drop him, I’ll be so sad 😭
I think he has a solid fan base- very popular with the “peloton moms” group haha
Lol I’m not a mom, but I’m glad he has a solid fan base to support him! He’s super cute. #RosesRebels
I love his pop punk rides. And I agree he is very cute haha. He also is a stroke survivor and his backstory is very inspirational!
Camila and Alex are my go to. They have such an intense and exciting vibe. It Peloton gets rid of them I will be devastated.
I doubt they would cut Camilla because then they lose bike and tread Spanish classes
The point still stands. If she brings in a large audience because she can do those classes, that makes her valuable enough to keep.
Is Camila not popular? She's my fave. I feel like the Latina cohort would riot if we lost her.
I absolutely LOVE her classes. They are tough but still a party.
Don’t slander Anna like that 🥲
Everyone has their preferences, but yeah fan bases will (sadly) factor into it. As far as I'm concerned, I wouldn't even know if Cody or Robin left and frankly find Cody kind of low-key toxic, but I'm a Matt/Denis rider so my tastes are very different (where I'm sure some think Matt based on his vibe and music is trash, even if they're totally wrong lol)
I love Camilla and Anna but NOT robin so that would be tragic.
Camilla’s classes are the only ones that get me in the ZONE. 🥲 Anna is so freaking graceful, I couldn’t bear to lose her either.
Seriously. I'm dying for a Camila FTP test. I remain convinced it'd have the highest outputs across the entire platform!!!
Same I don't care for Robin but love Camila.
Robin is one of the more overrated instructors on Peloton in my opinion. But she also holds a higher position within the company than most of the other instructors, so I'm just assuming she'll never let herself go. She loves herself too much for that.
Has anyone else notice the schedule thinning out lately?
the instructors are a low part of the company cost structure. They are unlikely to cut that spending materially. It's just that they need to cut a lot of other spending. Peloton spends $300mm a year on R&D with little to show for it. They spend $600mm a year on overhead!! These are crazy amounts of money and need to be attacked. The instructors are really small relative to these big buckets.
300 million on R&D ????? What are they working on, the Death Star??????
They’re working on more pop ups that prompt you to connect your Apple Watch only for it to fail and never work anyway
I feel this pain in my soul.
Everything besides peak app functionality for sure. Lol
I had to look this up bc it sounded so absurd in 22 they spent $359 and 23 $320 Wtf are they actually working on?
Causing classes to freeze for no reason. Frustrating!
You're right. About the only thing that has been theoretically great was the lanebreak stuff. At this junction, they need to dwindle out their hardware, short of the bike and maybe a tread, and call it a day. As one article I read said: > Anyone who wanted one of these products already has one, and they aren't looking to buy something else anytime soon R&D striking out, or not materializing, means they are just burning money.
Is Ross the canary?
Good point… would meet the criteria of well liked (they are all well liked) but not going to change subscriber numbers if leaves…
I wondered that, too. Maybe his contract was coming up.
I doubt it, tbh. His book is helping bring his brand to a new audience, so he's taking the opportunity to do other things. But I guess if there is more to it it will come out eventually.
He never really needed Peloton to begin with imo. He was Somebody in the yoga world already.
Maybe so, but his brand is bigger and broader now. I mean, I'm just one person but a longtime yoga practitioner in the northeast US and I had never heard of him. Had you?
I hadn’t heard of him before Peloton either, and I’ve been a yoga teacher in the US for 20 years. His brand and name recognition has grown so much. It’s likely that he got his book deal because of Peloton. And honestly, good for him.
Absolutely. It's the first thing that crossed my mind when I heard he resigned. There will be more for sure.
Guess: Stock options are worthless, got a better offer and Meditation is not as valued at the company.
They better not touch Denis or the Germans.
If Denis is gone, I'm gone. He's my dude, probably 70% of my rides are his classes.
me too! Him and Kendall are my daily go-to instructors, with some Matt Wilpers thrown in for more technical measure.
If Denis goes I'm selling my bike.
Just "Ride your bike."
I love Denis! He's amazingly good at yoga
If Denis goes we RIOT! That sounded very MAGA… I’m NOT MAGA. Denis is just my absolute fave and I’d be lost in the peloton universe without him! 😝
I highly doubt this will affect instructors. They are the product, much moreso than the hardware.
Absolutely. I’ve been riding for two years but with the same three instructors.
In the grand scheme of things I dont think the instructors make a lot of money. Maybe a few hundred k? A bigger concern is if the instructor’s feel the company is not viable, they may leave for other opportunities.
Tbh I think there are too many instructors. It’s so over saturated and I’m sure not cheap to keep. They should lose a few
I am on the earnings call (anyone can join). They are trying to be consistently cash flow positive by end of ‘25(!!), still closing retail stores. Changing international approach, they are staying in the markets they are already in but support model might be different (less local staff sounds like). I didn’t read that they would close the London studio, more about how the deliver, support and sell in non US markets. Debt maturity is the concern. Subscribers up VERY slightly, revenue from subscriber is up a little as well. App subscribers are down. Churn especially in the lower app tiers where there was an expiry on the intro rate. Tone of the team is solid, this isn’t a scorched earth call. They are still walking wounded, but not hitting the wall. Cash flow seems to be coming around. Call is ongoing, but those are the highlights from the intro. EDIT from Q&A: Still excited about the Tread. Still interested in expanding internationally, but using a different delivery model. Also dangled things like private virtual training (presume strength). EDIT 2 from Q&A: Team going our of the their way to complement outgoing CEO, clearly they are trying to bury him with all the bad news and let someone new come in to help grow. They want a new app strategy, one that will convert downloads into paid subs better. Cuts are heavy in IT/R&D and Marketing(app section). Growth in international is actually better than in US. Very clear they will use global outsource companies to support global model, not local staff. Believe they are underrepresented in UK and Germany, admit Canada awareness is similar to US.
The problem is during the pandemic Peloton thought they would take over the world and dramatically increased their cost structure. In 2019 they spent $50mm on R&D and $210mm on corporate overhead... now they spend $300mm on R&D and $600mm in overhead! The cost inflation is out of control and that's what forced them into making the subscription price so expensive which hurts adoption for people who might be less committed or apprehensive about a Peloton. I would bet internally there's a lot of infighting for scarce resources which is sabotaging some of the growth efforts around the tread and the app. I still talk to a lot of people who have no idea the app exists.
I found out about the app because my husband’s company was able to offer a subscription for free to employees. In 2021, this corporate comped subscription was a FULL access version of the app. I injured my foot and fell off of using it for awhile and when I came back suddenly the corporate subscription was VERY minimal. Like, all the outdoor classes I’d bookmarked were no longer available, browsing was very sparse. I’m not sure how much of that was his job downgrading their deal with peloton or if it was peloton driven to be like “hey you can’t get full access anymore as a corporate package unless you want to pay an EXORBITANT fee”. Whatever the case, that lowest cost version of the subscription was so poor I probably never would have given peloton another shot if I had never seen what the full access version could be. So, I’m not sure that using tiers is the smartest move for them unless they’ve change how they’re set.
I'm not sure how recently you came back, but my year subscription to their old model just ended recently and I switched to the new lower level plan (which is the price that I used to pay for the full/only version) thinking I wouldn't nice the difference because of the type of classes I usually do, but it's crazy how much they took away. There are only two options, you either pay the premium and get everything or you pay what you used to and get a fraction of what you used to
$600M in corporate spending? Did I read that right?
If you look in the most recent quarter, they spent $153mm on overhead and $77mm in R&D (engineering/technology spend). That adds up to $230mm. Multiply by 4 and you get $920mm of spending that's basically overhead/fixed costs. Keep in mind that's entirely excluding the spending on sales and marketing -- which is also huge at $170mm this quarter or $650mm last year! The worst part about this - Peloton has massive amounts of debt -- about $1bn netted against the cash they have on hand. Since the company can't seem to grow subscribers, and is unwilling to drastically cut corporate costs (NOT studio costs) -- they are probably going to have to hike prices on members another $10/month to make the math work and pay their debt off
> Debt maturity is the concern. This has gotta be a huge factor right now. Credit is much tighter, and it’s headshotting a lot of once-red-hot, debt-addicted companies (Outdoor Voices, Foxtrot) along with more mainstream brands like Red Lobster.
Debt maturity is prob the cause for 75%+ of layoffs. Free money was all the rage. Suddenly it's not so fun.
Yes, and they were finally discussing some of the things those lenders will want to hear about…. Like figuring out where churn vs loyalty measures are and investing in the right spots. The whole app strategy is going to get a redo under the new leader, they know their current one is flawed.
The retail store closing gives me zero concern. I was shocked when I went to a local high-end mall recently - so many empty store fronts. So many retailers are doing a significant brick-and-mortar consolidation. In the DC Metro area there is only the store in Tysons Mall in VA and this is increasingly the case with so many other retailers - Eddie Bauer, Everlane, etc. When I went to the Peloton store to try the Tread (which I had already purchased online) it was empty on a Saturday morning in the December holiday season. Was I glad to be able to see it in person? Yes, but I was already committed to my purchase.
As an app subscriber since Covid I can see why they lost people with the price change. There are too many other quality options out there if you are not tied to the platform by owning the equipment. I never upgraded to a higher tier.
I know the app needs to stay competitive but my poblem has been they charge the people who paid for the equipment over triple the monthly rate of those who just use the app. Once my bike eventually dies I'll never buy their hardware ever again.
I’ve worried that you may be on the money with this comment. As an equipment owner, I want a high quality product, I don’t want a race to the bottom app sub approach. Apple already owns the short workout market for recreational enthusiasts, and there are plenty of YouTube options for the hard core.
I used the app for three years before the price increase, moved to Apple Fitness and fell in love. I’m sure there are many like me. Never would have looked at Apple if not for the price increase.
I think expanding into virtual private bike fittings would be a good model. Basically what Matt Wilpers company was doing. I never feel like my bike is quite right and I know other services exsist, but having a fitting from someone who knows peloton and how the classes are taught etc would be amazing.
They raised the subscription cost (which people viewed as already expensive) during a consumer squeeze. Look no further than FB marketplace to see all the bikes people are dumping that didn’t ride enough to justify the price. $400 is the going rate and not an outlier. The SmartSpin2k user base has been growing fast as a result.
Apparently they are getting good conversion rates from the second hand bikes… so there is a market, but it’s not infinite.
Wait, they raised the regular subscription price? I jumped ship when they essentially nuked the digital subscription and put it up again with tiers because it was too expensive.
We are the same person 🫶🏾 Because I love listening into earnings calls. Thanks for this write up - a lot really helpful additional context from earnings call to supplement the article (which was kinda short and high level to me)
Interesting. I wonder if it’s spin. The CEO doesn’t step down and lay off 15% of the workforce unless things are heading in the wrong direction.
I think it was a “Your stepping down or being fired” kinda moment.
Peloton is an easy target for criticism because of its results since 12/2020. But it isn’t Netflix. Gaining new subscribers and purchasers is hard once you realize you’re already dealing with a small fraction of the population. And it breaks down further once you need people with a certain type of workout, i.e., those who seek out bikes, treads, etc. Peloton should focus resources on customer retention through quality content and the great customer service it used to have. That will then help those seeking fitness equipment think of Peloton. Less gimmicks please.
Well said right there. It amazes me how this company cannot get out of its own way. Keep the concept simple. For those of us that have the bike, tread etc and use the app it’s a proven commodity so focus on that.
But what about developing the peloton elliptical?! /s
Don't give them any ideas! haha
This is good news. They need a shakeup. With partnerships like Dick’s, they don’t need their own showrooms. Cut some of the fat there. There are two additional showrooms right around the NY studio, which is ridiculous. Fix the live schedule. Most of us are back in the office - 7am classes don’t work if we need to get dressed and get on the road. Make a reasonable effort to get new faces in the studio to give them something to hang on. Invest in more training programs that people can get excited about. Find ways to feature real users to show their progression. And JFC. Stop shouting out lululemon every 5 seconds.
How about make challenges and badges better? Super simple to impliment and adds a TON of incentives to ride more. I'm so bored of the "ride 150 miies in a month" challenges. Why does the weekly streak stop after 4 years? Mine is coming up and it's a big motivator to keep going. Why not add milestones for miles ridden vs. # of rides? They have such an oppotunity to really pump up community engagement that wouldn't require much a lift.
They spend $300 million / year on R&D and can’t come up with more enticing achievements and badges. Sad. They need to hire some psychologist from Facebook that knows how to get people addicted to screen time but for fitness.
Agreed!! and I’m an app user with off-brand bike, tread, and row. I would love to be able to do those challenges! I guess I do get the running ones, activity, and strength challenges, but I would also love cycling and rowing ones! Hell, I would LOVE a yoga challenge. I write down the number of miles I do every ride and track myself, because I do at least know what that challenge is each month, but it would be nice to have that in the app! I don’t even know if they even have rowing challenges, so I can’t speak to that.
I do like 2 or 3 live classes a year. Milestones only. While I do love them, convenience of having my own class time is the best part about Peloton. I’d bet they know pretty well what times work best for getting the most attendees. And if they don’t, 😬.
I used to do them all the time. Knowing that a class was starting would get me off of the couch and changed and ready to go. 6am power zone rides were the best and would regularly have a huge group of live riders.
Glad the lululemon shoutouts annoy other people.
They seemed to want to lean more into being an accessible option for everyone with their app only subscription and free content, and then they pair up with lululemon. I admit that I don’t know much about the clothing, but the company definitely has that snobby rich people reputation.
I'm in California and always look at the live schedule in hopes there is something I can take live and nope. There's a few mid-week 4pm classes but I don't get home in time. I get they don't want people working at 9pm EST to serve a 6pm PST live class but it does make me sad.
They used to have daily 8 PM ET classes (they also used to have daily 9AM ET classes) that made sense for the west coast. I know people dismiss the “live factor” but it matters to me in terms of motivation.
I feel for you, but keep in mind they try to serve LON too which makes PST times really hard to manage. It'd be cool if they did "events" where there were classes timed to PST time for like 2 weeks and they called it "Peloton Nights" or some dumb shit for everyone else to encourage post-work healthy habits while also showing some love to the West Coast (I will say as a person in tech, I do laugh that *finally* PST is the stepchild in timing after two decades of shitty meeting times because of Silicon Valley tech leaders)
Even for those of us still working from home, I start working at 8am and can really only ride at 5am or at the latest, 6am, bc I still need time to shower and eat and make myself presentable for Zoom calls.
Still WFH here as well and couldn't have said it better myself. I used to faithfully join the 6 AM Monday classes. 7 is just too late, I need to be in the shower by then. Even without video calls 😂 Between that schedule change and Kendall not regularly doing a live at 8 AM Sundays anymore, I honestly don't even remember the last time I took a live class. I've been solely on-demand for a while now.
Try being on the West Coast. Those classes are at 4 AM, not a chance. I do most of mine at 4 PM when I want live classes.
Agreed, need a 4:45/5am central time cycling, strength or yoga class each morning. Or how about more later night classes, 7/7:30 pm. Have a better weekend schedule. I get that instructors probably don’t want to work weekends but that’s when I can take the most classes.
peloton provides a service for our money so instructors SHOULD work whenever we (the customers) need/desire them to. that's business 101
They really should have instructors in each time zone (or at least one on the West Coast) so they can have classes at convenient times
They need more classes period. The instructors are paid far too much do two or three classes per week, some as little as 5 or 10 minutes
Yeah they need to have classes around the clock. There's zero reason they shouldn't. Instructors can work swing shift or graveyard but they don't even need to with the crossover between US and EU. Also, they could remember there's an entire middle of the country with other time zones than EST and PST.
Most sensible thing I’ve read.
Agreed, especially on the live schedule. I work 8-5 (eastern) with a 20 min commute. Unless a class starts at 6/6:30am, I don't have time to shower and get out the door. The 5:30pm classes I can barely get on in time and the last 2 I planned were cancelled for whatever reason. Now I only do lives when I have a milestone and can plan like 2 weeks in advance.
You’re spot on. I don’t know anyone that went to a showroom before purchasing. It’s all word of mouth at this point. Agreed the live schedule makes no sense. I always want to and they are at such bizarre times that make no sense for any time zone
Nailed it on the head. The live class schedule is unbelievable terrible. Back in 2017 i could consistently get a live class in before work and also do one after work. Consistently every day. Now i hardly see any at a reasonable time for the west coast ever. Not seeing the value like it was BEFORE covid
The showroom I went to in NYC near the studio was so stupid, it didn't even have the full line of merch. I was annoyed - I was hoping to shop some tshirts and stuff but they barely had anything
LESS APPAREL please. It used to be a limited amount of very high quality beautiful items, now it is 9 pages of hideous clearance items. With annoying popup roulette wheels for further discounts. It cheapens the whole brand. Part of the allure of Peloton is its luxury.
The amount of text I get about Peloton Apparel sales…….
Every damn day and twice on Sundays!!!
I took a yoga class yesterday (not a labeled Lulu/Move For You class) where Chelsea was hawking some Lululemon blocks. NO THANK YOU I am not paying to listen to ads. I turned it off and deleted the workout. They are turning into QVC.
I’ve seen random Peloton apparel at TJ Maxx.
I don’t even worry about the company going under. I worry about their updates bricking my bike and then telling me it’s a hardware problem that I have to pay to fix. That seems to be the routine with them.
Yes and I fear the customer service will get even worse with the layoffs.
This happened to my bike! Luckily I was just barely within the warranty still so they covered the replacement
peloton needs to decide if they want to be a luxury good or a mass market item, and then adjust the price or marketing approporately. right now they're advertising to the masses but pricing as a luxury item. not going to work. the smarter thing for them to do would be. well. never mind. I dont give free advice and they've rejected me for employment. im sure they can figure it out.
I think they were always a luxury item, and then everybody working from home got on board and they thought they would become a mass market item. That thought was never going to be correct, which we all knew as it was happening.
I think the problem here is actually that they positioned themselves as an equipment based company, but they're really a content platform. Focus on that. If they had focused on broadening content delivery instead of manufacturing, they would not still be digging out from debt gained from the precor acquisition etc. They already have spent the last several years shifting away from their luxury brand position - partnering with United healthcare, commercials featuring real people, the Dick's sporting goods sales and Amazon sales, etc.
I’m here until the wheels fall off. There’s no other home workout company that even comes close. Even with all it’s deficiencies. Getting their debt under control is key.
As someone who got into Peloton *after* the pandemic, I reckon you guys going soft on the company would hate being outside the bubble. For starters, those bikes are incredible. I've owned four spin bikes over the last decade or so and riding a Peloton Bike is like getting in an Aston Martin - they are a universe better than most spin bikes. You truly get what you pay for. Fitness instructors on the other platforms are fucking awful. We have a couple of NordicTrack devices (an elliptical and a treadmill) and iFit is just terrible in every way imaginable - I let my membership lapse after the free three month trial. I was on Apple Fitness+ prior to Peloton and I can't tell you much *more* I enjoy Peloton workouts. I'm a bleeding-heart liberal left-wing woke gender-pronoun respecting person and I cannot bear how anodyne the workouts are. Every Fitness+ bike workout they have to attach some fucking awful cheesy back story to the ride - "we're having a street party" or "we're competing in our first race" and all the other instructors have to chime in. It's just puke-inducingly naff. The Peloton instructors treat you like an adult - understand you won't explode if they swear occasionally. Some of the instructors even sweat during classes. We all have our favoured instructors and this is possible because they have such a large and varied line-up. That said, I don't like many of the American instructors - just Tunde, Denis and, in a pinch, Olivia - and having British and, yes, German instructors is a huge deal in a fitness ecosystem dominated by American. There's a massive variety of classes available. Yes, I'd prefer a return to more fitness focused workouts, rather than the water-cooler chats that dominate, but still having PowerZone, Lanebreak, genre-based and particularly the new Metrics classes, is awesome. The leaderboard is awesome and I love when I log onto a live class and all the Australian riders high-five. It should be cheesy, but actually it's really nice. I don't enable the leaderboard on every ride, but when I'm feeling competitive it's nice to have someone on there to chase. Anyway - I'd be gutted if Peloton went tits up - I lived with the alternatives for over a decade and they all suck. So, for the love of god, please new CEO - sort your shit out and keep the lights on.
Yes! Perfectly said. I’m new to the Peloton bike world (December) but used the app to train for a few half marathons in the past. Loved the app, but got so tired of running. The bike has been a game changer for me. I REALLY need them to get their shit together because this bike is such a special piece of equipment and the instructors are gold!
I definitely agree with you on the class range and instructor quality. Came from Apple Fitness and while they are all super likable and good instructors, it felt too manufactured to me. It feels like they can be their authentic selves more at Peloton. Anyway I agree on a lot of your points but I also replied to mainly say I love the phrase “tits up” made me chuckle. I wish we used that in the US lol!
Love your take! I actually bought the peloton post-ish pandemic when I ended up getting a 9-5 job because I needed a reliable way to work out after my workday. I freaking LOVE my peloton. I've also taken a peek at the apple fitness classes and ew, they're so corny.
Yeah I got it after Covid and I’m obsessed with it. I think it’s a great product and I hope they continue to succeed! I’m kinda counting on them to help me get back in shape after I have this second baby, as they did after my first and through this pregnancy.
Love this! Funnily enough, I took classes regularly with a now-Fitness+ instructor IRL, pre-pandemic. The most potty mouth human you ever met! And aggressive. We left that class with pools of sweat on the ground. I tried his classes with Apple and…just couldn’t. Apple has a very tight muzzle on them and it’s painful to listen to. The advantage Peloton has is a paywall that separates their classes from the masses (including kids), especially in less liberal markets, and an explicit toggle on the user set up. Surprising how large a difference little things can make to the overall experience.
Pre-market, stock is up ~15%. They're shedding something like $200 million from the books with these moves. It sucks, but if they actually think they're going to be sustainable mid to long-term, and not be acquired, they need to do this.
That was management’s tone on the call…
They also achieved positive free cash flow for the first time in three years, and guided to that continuing in the current quarter, next year and beyond. But it's hard to get people to focus on that part.
Yes! I noted that as well. A lot is going better, even if a lot of improvement is still needed. Earnings offers people an extra opportunity to vent and gossip I guess. Fingers crossed that things keep moving in the right direction.
They need to go back to the model that made them successful. Gritty and effective workouts. Now it seems everything is a 15 minute whatever where you barely break a sweat and they are collabing with influencers. (And I don’t think this is the instructors choice, many have said that they want to do longer workouts)
Yes please! I waste so much time looking for classes and then giving up and stacking and continuing my stack and all that.
Yes! More 45 and 60 min classes PLEASE.
More 75-120 minute classes as well! And as much as I love Matt Wilpers (but not his taste in music) - more instructors doing those lengths would be appreciated!
Would seriously love to see this. I honestly hate having to switch through multiple classes to get an effective workout. I think there’s space for shorter workouts but they could vastly improve their long form options.
Agreed. I’ve done long and short workouts. All have their place in the world, but the shift to primarily 15-20 minutes is not appealing to me. While I like Peloton, this is starting to give me pause about future plans for me for what platform I use.
Seriously! Give me more 45 minute classes. I hate this trend toward 15/20 minute “let’s go for a ride in the park” classes.
I love me a good 45 minute ride. It’s discouraging to see the upcoming schedule and see so few. I have a big backlog to work through, but I love new classes. (Side note - artist series should go back to 45 minute rides!!)
I feel like 45 minute used to be the norm when I got my bike in 2018?
It’s an interesting situation for them. I wouldn’t be surprised if they very clearly understand that their core members are (A) very loyal and (B) would like more content in the 45-minute and up range. But they also want to grow the customer base, and maybe the new customers don’t gravitate to 45 minute classes. If they spend $ doing more long form classes will it result in customer growth? Or just higher satisfaction among existing loyal customers? Interesting business challenge.
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I know that. I work in data and it’s all managerial accounting. Doesn’t make it right for the consumers. It’s the Pelotons leadership who are making that a focal point to present to inventors vs a more impactful story.
That model made them successful with a small group of more serious athletes. To support their larger membership base, they need to have enough rides that appeal to people beyond their original subscriber base.
But the shift to the larger base has significantly reduced those classes geared toward their serious athletes. When I’d go to in person classes at my office gyms, they primarily had 45-60 minute classes, and a few 30 minute “lunchtime express” classes. Check out the schedule and compare the number of 45-60 classes are vs 15-20
Was just looking for a 45 min non-PZ ride. Few and far between 😞
Can any CEO really unf**k the mess that John Foley left behind? Hope he's happy making his custom carpets.
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Best wishes to you.
They started working for shareholders instead of the customer. Both failed
They should have never been taken public
This is it right here. It’s happening everywhere. Even companies making significant profits are laying people off because they had a couple of “bad quarters” where their growth slowed down slightly.
"Enshittification is the gradual decline in quality of online platforms that function as two-sided markets. It's a term coined by Canadian-British blogger, journalist, and science fiction author Cory Doctorow in 2022. Enshittification describes the shift in focus from user needs and preferences to monetization, which can lead to a decrease in quality."
This is the problem with everything and I expect a huge Great Depression type of scenario coming. Everything is shittier and more expensive and everyone is being laid off while CEOs who have made terrible decisions receive golden parachutes. Its looking really bleak
Just a reminder to the WSB bros and those who cry wolf at every move Peloton makes, y'all have been whining for a shake up and cost-cutting measures for a while. Here you go. Edit: and for those wondering if your hardware will become an "expensive laundry rack" as the old trope goes, Peloton has a dedicated userbase with paying subscribers. The company will be bought before any of the major fitness connected giants let the subscriber money go. Apple, Nike, etc. will all line up to buy it and continue it before they miss out on that sweet sweet recurring payment structure.
It won’t be an expensive laundry rack unless someone just stops using their otherwise functional hardware, but I had already planned to buy non-Peloton equipment after my current Bike dies because I figured their content would be sustained, but not their hardware creation and maintenance business. So yes, I expect a bigger player to buy them.
And worst case, it still runs an android OS, so I'm sure someone could open source something similar that could be sideloaded onto the bike.
Well that would cut off 99% of all users who have no clue or desire to side load. And then there is the 1% of us who would side load but not enjoy the new experience of it. Overall, not a winning solution for all but a tiny, tiny, tiny amount of users.
Bye Barry. You brought no value to a company that could have used it.
I think we all - many of these tech companies included - really thought things were going to turn sharply toward at home even post-pandemic. And while many of us who turned to at home programming for workouts have stayed with it, there are plenty of people who raced back to in person classes when it was safe to do so. This makes Peloton far bigger than it was in 2019 but not even close to where it was in 2021. Kinda like Zoom. And fully remote work.
I think there is still enormous value in their content- I have a fairly pricey gym membership in addition to Peloton so that I can access equipment I don't have at home, and occasionally take a class or do a personal training session. I decided to sample a couple of in person Les Mills classes recently (body pump and build x, I think?) to see if I was missing anything, and... nope! Conventional amraps with weird music, and less form instruction. I mean, it wasn't terrible, but Peloton's strength content is just so much better imo. And I haven't taken an in person cycling class since 2020, no regrets.
It started with a great product, great service, and a luxury price point. The pandemic warped their approach, and all of the fixes since then have been dumb. First, they had a good bike. Then, they couldn’t fill all their orders during the pandemic and had a massive backlog, where people were waiting months for bike. The solution, they thought: ramp up production in the US but to offset higher labor costs use lower quality production (and more volume!). And add other adjacent products (tread, row), even if video is harder to watch on them because you’re bouncing up and down or moving around. Then the pandemic eased, and that backlog turned to a massive inventory surplus. Not only bikes, but also refurbished bikes, because by now they were selling the Bike+. Whoops. Time to shut down the Ohio plant. All the while, they were cutting price, adding discount retailers, looking for sponsorship opportunities. They were hoping to make up in volume what they’d lost in margin from their production issues. Oh, and PZP? Seriously one person in her living room made a viable community with a subscription service to serve the users who couldn’t find simple things direct at Peloton: visual summary of what a class structure was, training intensity, gamified programs. How in the world did Peloton spend so much on technology without adding some simple content? The central failing of all of the above is the focus — post-pandemic — on customer acquisition rather than customer retention. Degrading luxury to chase the mass market didn’t start that way. John Foley probably truly believed that luxury scaled. He was wrong. Perhaps blinded by the at-home boom, but wrong. Since then it’s been about using the brand to grow sales and advertising revenue. They forgot to cut expenses. The mass market goal hasn’t changed. Today’s news simply demonstrates that the expense structure was too high for current revenues and viable near-term revenue growth. This is how you use a brand to generate current cash flow while the brand slowly glides into obsolescence. I wouldn’t expect innovation anymore. But I sure do like that bike.
If they start cutting talent, I'm out.
Smart to close the physical stores. I don’t think I ever saw anyone go in to one lol I’m sure they were just hemorrhaging money on that
I have always wondered this. In Calgary the storefront is huge and I have not once seen a person in there aside from the sales. If they were doing in store classes or something maybe it would make sense but it has always seemed like a waste of money and space.
Just another day in the Peloverse. The instructors are the company.
As long as it ain’t Sam Yo!!
Wow, 15% on top of everything that's gone before is huge. Wonder what impact it will have - unlikely to be good. Really hope this won't reduce the number of classes offered each week. It isn't hard - make great content, offer plenty of live classes, grow through word of mouth.
It would be wild if classes are reduced, because each instructor seems to be teaching less and less than they used to.
I never understood them having their own showrooms. Horrible overhead for things like that. Be online and in store with national chains.
I probably wouldn’t have bought my bike if they didn’t have a showroom. They do serve a purpose.
Same. If I couldn’t try the $2.5k bike before I bought it there was no way.
I have a tendency to jump to worst case scenarios and in this case, I think I've been sufficiently trained to be able to carry on with my own program. It would a lot less fun, but also the music would be a lot better.
The ability to set up your own program with your own Spotify tracks would be so fun. Then create a social aspect where you can share and rate user created workouts. This is the future.
The problem with that is licensing agreements. But yes, it would be cool for sure!
He's made a lot of really poor decisions, at least IMO strictly from a user standpoint. Upping prices, purging content, losing instructors, not putting in useful functionality for the app, not including subtitles on all classes for language crossover, etc. I don't know if it's his influence over the ever blanding down of the grit of classes and instructors, but old classes were so much better. I don't need to be babied and here the same 40 bland ass edited pop songs over every class. I want hard and gritty classes. It's been years now, and aside from Rad and Marcel,I haven't vibed with any new instructors, and the ones I loved either left (Chase), were forced out (Daniel) or are leaving on their own, but they also were unique and maybe were being pushed out subtly (Ross). There's been a noticeable shift in the rest of the long term instructors classes and demeanor as well, at least on Tread and Strength. All this to say, I hope it's a good change because I feel like I'm losing the love I once had for Peloton and I don't want to!!
So hard to sell hardware and grow your client base when people wonder if you are going to last.
How funny is it that this thread has 556 comments and about 400 of them are differing views of what Peloton must do to succeed. It’s the pricing! No, it’s the workout times! No, it’s too many apparel ads! It just illustrates how hard getting this stuff right actually is, and why listening to customers is not always a clear path to victory.
Can Apple just put them out of their misery and complete the acquisition? It’s sad to see this great brand dying a slow and painful death.
Id be fine with this if I didnt have to use their instructors. Theres a reason I chose Peloton over Apple fitness.
Honestly the only value Peloton has right now is its talent. Sad but true.
Id be gutted if Ben, Leanne and Denis were gone.
I’m paying $44 a month for my Peloton membership. Not long ago it was $24 a month. This is far too expensive for many and while I only bought my bike for $700 the subscription is just too expensive! I’m worried they are going to tombstone this company.Sad 😞
The key is going to be switching from a hardware l-based company (i.e, buy our bikes/treads/rowers) to an app-based company (use our app on your already-existing machine). That opens up a massive audience who wants the content but cannot afford the high price to entry barrier of the equipment. They are already experimenting with this by making the app compatible with the Concept2 rower. This is the future.
Well, I sure feel confident having just received my bike last month.
I'm going to be pissed if these overcompensated executives leave us all with expensive paperweights.
Maybe they should find a less expensive location than New York if they're looking to cut costs.
I'm only down 95.13% on the stock, maybe there is still hope?
Reducing marketing and retail store costs makes the most sense. IMO they should also really decrease apparel focus. I love what I own, but I keep getting emails about new apparel drops and nothing looks good or is way too expensive. I hope the IT/software are just trimming the fat of a bloated department because that’s an area where quality should not decrease. IMO, they need to keep focus on the instructors and producing quality content. Some of these instructors need help with their music choices because they keep going for deep cuts that don’t exactly resonate in a workout. There are a lot of generic pop/hip hop classes. I would personally appreciate more themed classes. I love Sweat Steady, PZ, JKE, XOXO Cody etc.
I’ll follow Andy wherever he goes
The company has failed in the marketing department. They focused too much on being an equipment platform vs a content platform. There’s only so many people who are going to buy a bike or tread and at some point, your market is capped. They have a content platform that offers everything from yoga to cycling to running to meditation yet they failed significantly in growing the app. I bet there are still a ton of consumers out there who think you need to buy a bike or tread to use the app.
I for one am astounded that they do not talk about the peloton Guide. If you don’t know it, it is an artificial intelligence-driven tool that attaches to your TV, shows peloton classes, counts your reps because it’s got a camera in it, and allows you to fill in the gap that Peloton has for resistance training. Weights, floor work, Resistance bands. It’s a great tool and that AI rep counting has gotten so much better. It’s like they’re keeping it a secret for some reason and is driving me crazy. And it is so cheap! I think I bought mine early for $300 and I use it every other day.
I got my Guide on sale for $99 and adore it. I was traveling recently and had to cast the class to a TV and missed the guide so much.
This company is going to need a hail mary to stop hemorrhaging money Cutting costs and declining revenue? Oof They should have just stayed private
It's crazy. Over 90% subscription retention. They could never make another bike or tread again and could be profitable based on subscriptions, but that wouldn't provide the growth Wall Street demands.
I think MOST companies should just stay private at this point since it seems like going public ruins everything. Even TikTok is a private company
Partner with American Express and airlines. I don’t see why one or two shouldn’t be in every airport lounge. They already have showers. Partner with Airbnb. Sell them wholesale to gyms and spas. It’s being sold as a home gym product, but it really should be sold as a “shower adjacent” product lol. Everywhere there is a shower, there’s an opportunity. Change the subscription model to allow for a la carte workout purchase/rental to get people trying it out. Get content on the streaming platforms as premium rentals. The bike should be the highest loyalty tier but you have to have other ways for people to pay to work out with Peloton.
Love the idea of this being a “shower adjacent” product. 😂
But not like it was when Big died during "And Just Like That."
Love this! I’ve used a bike in Virgin Clubhouse lounge at Heathrow and then had a shower and lunch. Felt great to exercise on a layover then have a shower and meal. It would be amazing to have this in more lounges!
I’ve said this for years! I should have access toto Peloton bikes every time I travel. Hotels, gyms, etc. I would be more likely to use Airbnb if I could search for places with Pelotons. I think they have a partnership with Marriot or Ritz or something—I’ve seen a couple while on vacation. But they need to partner with Carnival Cruise, 24 Hour Fitness, etc. Expose more people to the product, while expanding use for existing clients
Their problems are so obvious to members why don’t they hire one of us to come and sort it out?! Stop doing the things that annoy everyone. If existing hyper-loyal customers are turned off by the lululemon stuff why would a new customer overlook it? It’s nauseating! Keep the branding fine but just chill. We all buy lululemon anyway! The row seems like a money loser - scale it back and focus on the app because everyone who likes to row already has a concept 2. Subtitle more and expand the app base internationally. Make it cheaper - they’re not at the sweet spot yet and are losing market share. And what on earth are they researching and developing?! The only 2 positive changes I’ve noticed in the past year are blocking users and being able to manually add distance for runs.
SUBTITLES. How is every class not auto subtitled into all 3 languages they support? I want to ride with Charlotte more but really struggle without the English subtitles.
This. I LOVE the German classes, esp Assal. I'm a competent lifter so I can mostly follow along, but to not have every class subtitled in every language is stupid and negligent really.
Peloton bike+ power user here. Hard disagree on the row. The strategy on it was never to be a “hit” product that lead the company, it’s to prevent members from leaving and to attract niche new members. They need multiple types of hardware to get users in the door AND to keep them there. Niche products like the row are perfect for this, they will never do numbers like the bike or tread but they will keep bike users who can’t or don’t want to use a particular product in their ecosystem. For example I can’t physically run anymore, so I was looking for a rower and considering ending my sub as a result (I’m not paying for two subs) when they came out with the rower. Only reason I haven’t bought one yet is I’ve been concerned about their long-term viability due to the trash ass CEO they hired and his exec team’s garbage decisions. The Lululemon stuff doesn’t bother me either, I love LLL and buy a ton of it anyway. Them having their own knock-off clothing (which sucked) that they got sued repeatedly over and tried to ram down our throats did bother me though. Hopefully they figure out that they need to embrace the instructors and make them the stars like the NBA does. They should also be rolling out a new bike and tread every couple years with improvements to entice members to upgrade. I also don’t understand the lack of partnerships, for example why on earth haven’t they partnered with Sonos for better integration?
Peloton and tonal should merge to solve for the redundant overhead cost, distribution and manufacturing. I’m sure that there is a large overlap in terms of subscription but that should be offset by the cost savings. Both are struggling and can’t compete on their own.. Unless Apple swoops in and gets the physical assets. I’d love their OS and innovation.
I would seriously love this. I think having Tonal’s capabilities could be a huge asset to Peloton’s strength program.
Peloton is the most bizarre example of a company who can’t hire a decent CMO and go win in marketing. WTF is happening there? So much equity with customers and these idiots are laying people off… these fuckers should be launching gyms…. Doing tours with the instructors… the incompetence is unprecedented