Right Before the Pandemic, Peloton Made a Quiet, Shrewd Pivot
Although its name is synonymous with expensive workout equipment, Peloton’s real future lies in apps and on-demand classes
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When you hear the name Peloton, you probably think of a bike. In particular, you probably think of the company’s iconic stationary bike that streams fitness classes. Peloton’s physical products (which, besides the bike, includes a treadmill, yoga accessories, and a heart rate monitor) have been the primary focus of the company’s branding and marketing efforts to date. Its value proposition of “connected fitness” (access to fitness made more easily available to consumers at home via technology) is built on the foundation of selling high-performance equipment.
However, I believe that’s going to change. Years from now, when Peloton has fulfilled its destiny atop the fitness throne, I believe its sustained success will largely be traced back to a series of pivotal announcements made in early December 2019. Though not seen as earth-shattering at the time, these announcements signaled Peloton’s transition from a hardware company to a content company — a move that I believe is its key to fitness world-domination.
A price change and two new apps
On December 5, 2019, Peloton made three announcements: The company dropped the price of its mobile app, Peloton Digital, from $19.49 to $12.99 per month. It released an app for Apple Watch. And it released an app for Fire TV.
Peloton is decidedly making it easier and cheaper to access their classes without owning a piece of their equipment.
Peloton Digital features live and on-demand classes across a wide range of fitness categories: cycling, running, yoga, meditation, and more. The biggest difference between Peloton Digital and the app that comes with a Peloton membership is that the membership involves buying a Peloton bike or treadmill and allows customers to track their performance and see their position on a kind of communal leaderboard. Notably, the membership subscription is about three times the price of Peloton Digital at $39 per month.
